Chinese investors, immigrants sue LA investment firm for misusing money

Luca International Group, LLC had an office in the San Gabriel Valley. The US Securities and Exchange Commission has also filed a complaint, alleging that investors were defrauded.
Luca International Group, LLC had an office in the San Gabriel Valley. The US Securities and Exchange Commission has also filed a complaint, alleging that investors were defrauded.
Photo by The AutoMotovated Cyclist via Flickr Creative Commons

Chinese and local investors filed a class action lawsuit this week claiming an investment firm that targeted them through Chinese-language media and investment seminars for oil exploration instead used some of the money to buy a luxury home in Fremont and other personal expenses.

They're seeking $750 million in damages from Luca International Group LLC, which describes itself as an "upstream energy company" on its website.

Among Luca's investors were hopeful immigrants who were investing money through the federal EB 5 visa program, which gives foreigners legal status if they invest at least $500,000 locally and the money creates at least 10 jobs.

In a sales pitch at Luca's San Gabriel office, one plaintiff was allegedly pitched "a 100 percent return on her investment within three to four years."

According to the suit, it raised $68 million from investors.

The firm is headquartered in Houston, Texas but had offices in Fremont, Calif. and locally on Valley Boulevard in San Gabriel.

The lawsuit, filed in Los Angeles, alleges breach of contract, fraud and negligence. It comes on the heels of an investigation into the company's practices by the U.S. Securities and Exchange Commission, which filed its own complaint last month.

Company officials could not be reached for comment. Its Valley Boulevard office is now vacant and phone numbers listed locally and in Northern California have been disconnected. An email to the company went unanswered Friday.

One of the Luca companies named in the lawsuit is Luca Energy Fund, LLC; a "Luca Energy Fund Regional Center" in Texas is among the hundreds of "immigrant investor regional centers" listed by U.S. Citizenship and Immigration Services.

Most of these regional centers are private companies that are authorized by the government to collect investments from EB 5 visa applicants.

Launched in 1990, The EB 5 has grown exponentially in recent years, with applications flooding in from wealthy Chinese as that country's economy has grown. The program maxed out last year at the annual 10,000 visas allowed, the majority going to Chinese applicants.

The number of EB 5 regional centers has also mushroomed, from just a handful a decade ago to almost 700 now. But some have run into trouble: U.S. Citizenship and Immigration Services lists 34 regional centers that have been terminated.