The defendant disgorged investment yields and paid a fine to resolve allegations in this case involving alleged EB-5 program fraud.
Retained by the Securities and Exchange Commission
The defendant, Robert Ferrante, was a partner in PDC Capital LLC, a company that offered and sold investments to foreign investors under the EB-5 Immigrant Investor Program. The Securities and Exchange Commission sued Mr. Ferrante, alleging that he defrauded investors seeking EB-5 visas. The SEC retained Carlyn Irwin of Cornerstone Research to provide expert testimony.
Ms. Irwin conducted the following analyses and submitted an expert report:
- Determining the flow of investor funds that was prescribed in the private placement memorandum (PPM) of each offering.
- Analyzing accounting and banking records to determine the actual flow of capital contributions and administrative fees in order to evaluate whether the flow of funds was consistent with the requirement of the offering materials.
- Analyzing accounting and banking records to evaluate whether Mr. Ferrante personally realized pecuniary gains from his relationship with PDC Capital.
Ms. Irwin opined that the financial and banking records of PDC Capital and related entities showed substantial deviations from the disclosed flow of funds and other representations made to investors in the PPMs. Such deviations demonstrated a sustained pattern of misuse and diversion of the capital contributions made by the EB-5 investors. She concluded that Mr. Ferrante received pecuniary gains from the transactions and entities in conjunction with the PDC Capital offerings.
The case settled after the motion for summary judgment submitted by the Securities and Exchange Commission referred to the forensic analysis by Ms. Irwin. The defendant agreed to disgorge his investment yields and pay a fine to resolve allegations.