SEC v. Lixin Azarmehr; JL Real Estate Development Corporation; Nevada Skilled Nursing Lender, LLC; and Nevada Skilled Nursing Development, LLC, No. 2:24-CV-00707, District of Nevada (Apr. 12, 2024) — Complaint

COMPLAINT

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Rebecca R. Dunnan (DC Bar No. 90019733)
Email: [email protected]
Telephone: (202) 551-3813
Facsimile: (703) 420-6032

H. Norman Knickle (RI Bar No. 4957)
Email: [email protected]

Attorneys for Plaintiff
Securities and Exchange Commission
100 F Street, NE
Washington DC 20549
UNITED STATES DISTRICT COURT
DISTRICT OF NEVADA

SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,

vs.
LIXIN AZARMEHR, JL REAL ESTATE
DEVELOPMENT CORPORATION,
NEVADA SKILLED NURSING LENDER,
LLC, and NEVADA SKILLED NURSING
DEVELOPMENT, LLC,

Defendants.

Case No. 2:24-cv-707

COMPLAINT

JURY DEMAND

Plaintiff Securities and Exchange Commission (the “SEC” or “Commission”), for its
Complaint against Defendants Lixin Azarmehr (“Azarmehr”), JL Real Estate Development
Corporation (“JL REDC”), Nevada Skilled Nursing Lender, LLC (“Lender”), and Nevada Skilled
Nursing Development, LLC (“Developer”) (collectively, the “Defendants”), alleges as follows:
JURISDICTION AND VENUE
1. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1), and
22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a),
and Sections 21(d)(1), 21(d)(3)(A), 21(e), and 27(a) of the Securities and Exchange Act (“Exchange

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Act”), 15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e), and 78aa.
2. In connection with the conduct alleged in this Complaint, the Defendants have,
directly or indirectly, made use of the means or instrumentalities of interstate commerce, of the
mails, or of the facilities of a national securities exchange.
3. Venue is proper in this district pursuant to Section 22(a) of the Securities Act [15
U.S.C. § 77v(a)], and Section 27 of the Exchange Act [15 U.S.C. § 78aa(a)], because certain of the
transactions, practices, or courses of conduct constituting violations of the federal securities laws
occurred within this district. In addition, venue is proper in this district because Defendants transact
business in this district, Azarmehr resides in this district, and Developer maintains an office in this
district.
SUMMARY
4. This case involves a fraudulent scheme perpetrated by Azarmehr and three entities
she manages — JL REDC, Lender, and Developer — to use funds solicited for the development of
three skilled nursing home facilities in the Las Vegas, Nevada area (the “Nevada Project”) for an
unrelated real estate project contrary to disclosures to investors.
5. From at least September 2015 through March 2018, Azarmehr and others acting on
behalf of these entities offered and sold securities in the Nevada Project, raising $14 million from
28 investors. The Defendants structured these investments to comply with the federal U.S.
Citizenship and Immigration Service’s (“USCIS”) EB-5 Immigrant Investor Program (“EB-5
Program”). Under the EB-5 Program, investors are eligible for ten-year permanent residency visas
(“Green Cards”) to live and work in the United States if they make a qualifying investment in a new
commercial enterprise in the United States that creates or preserves a certain number of permanent
full-time jobs for qualified U.S. workers.
6. In offering documents for the Nevada Project, Azarmehr and Lender represented to
investors that the project met the qualifications of the EB-5 Program and that investor funds would
be used solely for the construction and administration of the Nevada Project, through loans from
Lender to Developer. But instead of allocating these investments as promised, the Defendants
redirected most of the money raised for other purposes.

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7. In March of 2017, Azarmehr, on behalf of Developer and JL REDC, pledged $10
million in investor funds as collateral to support JL REDC’s receipt of a priority credit line from
Bank A (the “PCL” or the “PCL Account”). The PCL had lower interest rates than other lines of
credit available to JL REDC at the time. JL REDC then used the PCL to pay off a higher interest
rate loan for a separate JL REDC real estate venture – an uncompleted mixed-use project located at
631 S. Vermont Avenue, near the Koreatown neighborhood of Los Angeles (the “Vermont
Project”). Using the investor fund-backed PCL saved JL REDC substantial costs in interest
payments.
8. For almost four years (from March 2017 to February 2021), the pledged investor
funds were subject to seizure by Bank A if JL REDC did not meet its obligations. The Nevada
Project offering documents did not disclose to investors that investor funds could be used by or for
JL REDC. Nor did they disclose that investor funds were at risk as pledged collateral for an
unrelated real estate debt. While these funds were securing the PCL, they were also unavailable for
their promised use – the construction of three skilled nursing facilities in the Las Vegas area.
9. To date, none of the EB-5 investors have received a Green Card in connection with
their investment in the Nevada Project.
10. By engaging in this conduct and as alleged further herein, all Defendants violated the
antifraud provisions of Section 17(a)(1), (2), and (3) of the Securities Act, 15 U.S.C. § 77q(1-3) and
Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rules 10b-5(a) and (c) thereunder, 17
C.F.R. §240.10b-5(a) and (c). Additionally, by engaging in this conduct and as alleged further
herein, Defendants Azarmehr and Lender violated Section 10(b) of the Exchange Act and Rule 10b-
5(b) thereunder, 17 C.F.R. §240.10b-5(b).
THE DEFENDANTS
11. Azarmehr, age 56, is a resident of Las Vegas, Nevada, and has been licensed to
practice law in California since 2008. She has worked primarily in the areas of real estate
development and immigration law for the past twenty years. Azarmehr is the co-founder of JL
REDC, and she is and has been its Chief Executive Officer since its founding in 2015. Azarmehr
also has an ownership interest in JL REDC. Azarmehr has never been registered with the SEC in

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any capacity.
12. JL Real Estate Development Corporation (“JL REDC”) i s a real estate company
focused on developing projects in southern California and Nevada. JL REDC is a California close
corporation with its headquarters located at 707 Wilshire Boulevard in Los Angeles. JL REDC
advertises renderings of three projects on its publicly available website: (1) the Nevada Project; (2)
the Vermont Project; and (3) the “Rocca Project,” a planned residential complex located in the Bel
Air neighborhood of Los Angeles. Since at least 2015, JL REDC has at times done business in the
United States as “Jia Long USA” or “Jia Long Group USA,” although it is not registered in Nevada,
California, or elsewhere under either name.
13. Nevada Skilled Nursing Lender, LLC (“Lender”) was incorporated in 2015 as a
Nevada limited liability company. Lender is the issuer of the securities in this case and was created
to raise capital under the EB-5 Program. Lender sold such securities in the form of LLC units under
a private placement memorandum (“PPM”) purporting to qualify for the registration exemption
under Section 4(2) of the Securities Act.
14. Nevada Skilled Nursing Development, LLC (“Developer”) was created in 2015 as
a Nevada limited liability company. Lender functioned as a vehicle to receive investor funds to loan
to Developer. Developer then functioned as the job-creating entity for the purposes of EB-5
Program eligibility.
ASSOCIATED PARTIES
15. Nevada Investment Regional Center, LLC (“NIRC”) was created in 2013 as a
Nevada limited liability company. NIRC serves as a “regional center,” which was set up to
administer investments in the EB-5 Program as required by USCIS. Azarmehr and two other
individuals are listed as the managing members of NIRC.
16. Lender Manager, LLC (“Manager”) is another Nevada limited liability company
incorporated by Azarmehr in 2015. At all relevant times, Manager was a wholly owned subsidiary
of NIRC. In turn, Manager managed Lender.
17. The co-founder and Chairman of JL REDC (“Co-Founder”) is a resident of Beijing,
China. On JL REDC’s publicly available website, Co-Founder’s biography states he is the founder

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and owner of several real estate development projects in Beijing, Hainan, Hong Kong, and
Shenzhen. The website claims that the assets of Co-Founder’s Beijing-based company total over $3
billion.
18. Jia Long Holdings, LLC (“Jia Long”) is a Nevada limited liability company that
was formed in 2015. Azarmehr and Co-Founder are also the managers of Jia Long, each with an
ownership interest in the company. At all relevant times, Jia Long was the manager of Developer.
THE FRAUDULENT SCHEME
A. The Nevada Project EB-5 Offering
19. On September 4, 2015, Azarmehr founded the various Nevada Project entities —
Lender, Developer, and Manager — to raise money and ultimately build three skilled nursing
facilities. The plan for these facilities was to develop 15-acres in the Las Vegas and Henderson
areas to house more than 400 beds licensed to provide room, board, and specialized nursing care for
senior citizens. The projected cost to acquire land and develop the three facilities constituting the
Nevada Project was approximately $69 million. The Nevada Project planned to raise $57 million
from 114 foreign investors, and an additional $12 million from private equity contributions.
20. To attract foreign investment, Azarmehr sought to qualify the Nevada Project under
the EB-5 Program. On March 17, 2014, Azarmehr filed an application (“Form I-924”) with USCIS
to create such an investment opportunity through NIRC. On July 15, 2014, USCIS conditionally
granted the application. In 2015 and 2016 addendums to the original Form I-924, Azarmehr
identified Lender as the new commercial enterprise (investment vehicle) and Developer as the job-
creating entity to be considered under the EB-5 Program. Azarmehr signed these USCIS
applications as the managing member of NIRC.
21. On or about September 2015, Azarmehr oversaw the creation of a “Business Plan,” a
confidential PPM, and a “Subscription Agreement” (the “Nevada Project Offering Documents”) for
the purpose of partially financing the Nevada Project through an EB-5 offering (the “Nevada
Project Offering”). Azarmehr reviewed the Nevada Project Offering Documents before they were
provided to investors. As the manager and officer of the Nevada Project entities, Azarmehr signed
the Subscription Agreement, which incorporated the terms of the PPM, on behalf of Lender,

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Manager, and NIRC. The PPM also directed that “[a]ll inquiries concerning this offering
memorandum and the offering” be directed to Azarmehr.
22. The Nevada Project Offering solicited an investment of $500,000 from each EB-5
investor with an added $50,000 administrative fee to be paid into a different bank account. For each
$500,000 investment, an investor received one of the 114 units in Lender. If all 114 units were sold,
Lender would raise a total of $57 million.
23. The Nevada Project Offering Documents limited Developer’s use of investor funds
to the construction and operation of the Nevada Project. Specifically, the PPM stated:
“[Lender] intends to use the net proceeds from the sale of the Units to make the Loan to
the [Developer], which will use the proceeds for working capital, and for other
general corporate purposes, to begin construction and facility operations of one of
three planned skilled nursing facilities in the Las Vegas-Henderson NV area, as
more fully described in the Business Plan in Exhibit B. The [Developer] plans projects
involving the construction and operation of three 143-bed skilled nursing facilities
located in (i) East Las Vegas, Nevada, (ii) Henderson, Nevada, and (iii) South West Las
Vegas, Nevada. The [Lender] will make the Loan for these three projects, to be
determined by the Manager in its sole discretion” (emphasis added).

24. Similarly, the Business Plan represented that loan proceeds would be used to develop
the Nevada Project: “[Developer] will use the proceeds of the loan and contribute funds as capital
contribution to each of the Project’s developments.”
25. These representations that investor funds would be used to develop and operate three
skilled nursing facilities and create jobs through the Nevada Project were material because these
were requirements upon which investors’ eligibility for the EB-5 Program depended. The creation
or preservation of a certain number of permanent full-time jobs is necessary for each investor to
qualify for a Green Card. Based on the language in the Nevada Project Offering Documents,
investors could reasonably expect that their investments would be used in furtherance of that goal
and not diverted for unrelated projects that did not further their ability to obtain a Green Card.
26. The Nevada Project Offering Documents also claimed that investors could expect to
receive a return on their investment if the project was successful. The PPM promised that the loan
from Lender to Developer would “accrue simple interest at 3.0% per annum.” Developer would
make “interest-only payments of one (1%) percent on each anniversary of the loan agreement until

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the Loan Maturity date.” “At the end of the Term, the [Developer] will be required to promptly pay
in full to the [Lender] the outstanding loan amount, and all accrued but unpaid interest.” The
“Term” of the loan was defined as “the earlier to occur of (a) five years after the date of the Loan or
(b) the sale of the business by the [Developer] (“Loan Maturity”).”
27. In sum, investors reasonably expected to receive (1) the ability to apply for a Green
Card if the Nevada Project met the EB-5 Program requirements, and (2) accrued interest of 1% as
well as a return of their principal at the end of the loan Term.
28. The Nevada Project Offering Documents explained that each investor’s investment
was subject to “risk factors” that could cause “a possible total loss of investment.” The PPM
explicitly identified those risks as relating to (1) “Immigration & The EB-5 Visa Program,” (2)
“The Loan,” and (3) “Borrower’s Operations.” With respect to the loan, the PPM acknowledged
that the “high degree of risk involved with the ability of the [Developer] to repay the Loan” was
based in part on Developer’s “ability not only to construct and operate skilled nursing facilities, but
to populate those facilities so that they will operate profitably.”
29. None of the Nevada Project Offering Documents identified any risk to investors’
expected return or EB-5 eligibility arising from their investments being pledged as collateral for
outstanding debts from an unrelated business venture. Nor did the Offering Documents identify any
risk related to unrelated real estate projects, such as JL REDC’s Vermont Project. In fact, the
Nevada Project Offering Documents made no mention or reference to JL REDC or the Vermont
Project at all.
B. Solicitation of Investors
30. Beginning in September 2015, Co-Founder and agents working on behalf of the
Nevada Project Offering solicited investors. Co-Founder primarily solicited investors in China by
sharing the Nevada Project Offering Documents and other marketing materials to promote the
project. Promotional materials circulated for the Nevada Project listed “Jia Long Group USA” as
the developer.
31. Azarmehr was aware that these marketing materials were created and disseminated
to investors. She also developed marketing materials of her own. For instance, on December 30,

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2015, Azarmehr sent a draft newsletter to her assistant for revision and formatting. The newsletter
described the Nevada Project as operated by “Jia Long USA.” The website provided in the
newsletter for Jia Long USA redirects to the JL REDC website. Since at least 2016 through the date
of this Complaint, JL REDC’s website has advertised the Nevada Project as one of its real estate
development projects.
32. Starting in September 2015 and continuing until at least March 2018, 28 investors
participated in the Nevada Project Offering and invested a total of $14 million. Each investor
invested approximately $500,000. Some investors also paid a $50,000 administrative fee. As
outlined in the Nevada Project Offering Documents, between 2015 and 2018, each investor sent
their investment to a holding account at Bank A controlled by Lender (the “Investor Holding
Account”).
33. Between 2015 and 2018, Lender executed eight promissory notes to loan a total of
approximately $14 million in investor funds to Developer, as described in the Nevada Project
Offering Documents. Lender transferred these funds from the Investor Holding Account to
Developer’s bank account at Bank B (“Developer’s Operating Account”).  As of March 15, 2017,
Developer held approximately $10 million in funds raised from investors in the Nevada Project
Offering in Developer’s Operating Account. Azarmehr knew that the funds in Developer’s
Operating Account were investor funds for use in the Nevada Project.
C. The Defendants Misappropriated and Misused Investor Funds
34. Also in March of 2017, JL REDC’s $12 million loan for the Vermont Project was
coming due. Azarmehr knew this debt had to be repaid or extended by March 31, 2017, or Bank C
would apply an interest rate of 24% per year.
35. On or about March 14, 2017, Azarmehr opened a new account with Bank A in the
name of Developer (the “Investor Collateral Account”), as well as a priority credit line account in
the name of JL REDC (the “PCL” or the “PCL Account”). The Investor Collateral Account was
funded with the $10 million in investor funds that were loaned from Lender to Developer in
accordance with the Nevada Project Offering Documents.
36. On or about March 17, 2017, Azarmehr, acting on behalf of both Developer and JL

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REDC, pledged the funds in the Investor Collateral Account as a guaranty for obligations incurred
by the PCL Account. Specifically, Azarmehr granted a “continuing first priority perfected security
interest” in all assets held in the Investor Collateral Account to Bank A. This was part of ensuring
repayment of the credit Bank A had extended to JL REDC in the PCL Account.
37. Throughout March 2017, Azarmehr discussed her intentions for the Investor
Collateral Account and the PCL Account with representatives from Bank A. For instance, on or
about March 20, 2017, contemporaneous notes taken by Bank A personnel indicate that Azarmehr
and a bank representative discussed Azarmehr’s plan to use the PCL funds for investment and
“bridge financing” and that Azarmehr did not have immediate plans to pay off the PCL. Notes
further indicate that Azarmehr and a representative from Bank A discussed that money wired out of
the PCL would be used for funding, finishing up projects, or repaying previously provided
financing.
38. On or about March 27, 2017, Azarmehr directed Bank A to wire $8.99 million from
the newly opened PCL Account to Bank C to pay off the remaining balance of JL REDC’s loan for
the Vermont Project. JL REDC’s debt to Bank C accrued interest at a rate of 7.9%, whereas the new
investor fund-backed PCL had a rate of only 3.1%. From that point forward, the Investor Collateral
Account was at risk if JL REDC failed to repay the PCL for JL REDC’s Vermont Project debt,
which had nothing to do with the Nevada Project.
39. The funds in the Investor Collateral Account were also in jeopardy for other reasons.
Under the terms of the PCL, the value of the securities and mutual funds backing JL REDC’s loan
from Bank A could increase or decrease in response to market fluctuations, interest rates, general
economic conditions, and other factors. If the value of this backing fluctuated, so too would the
value of the Investor Collateral Account supporting the PCL. “[I]n order to maintain the required
equity” in the Investor Collateral Account, Bank A could “force the sale of securities or other
assets” in the Investor Collateral Account without notice to Azarmehr, without allowing Azarmehr
to decide which securities or assets would be sold, and without allowing Azarmehr an opportunity
to provide additional funds or assets. These demands for further cash or securities to cover losses to
the PCL are known as margin calls. Azarmehr personally signed an agreement with these terms and

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appeared before a notary public on March 17, 2017 to do so.
40. In fact, between November 30, 2018 and January 14, 2020, Bank A required such
additional funding to cover eight margin calls on the Investor Collateral Account. On at least three
of these occasions, Azarmehr and other JL REDC employees approved the transfer of funds from
the Investor Collateral Account to satisfy these margin calls. However, during this same timeframe,
Bank A also automatically transferred funds from the Investor Collateral Account to the PCL
Account under the terms that Azarmehr agreed to.
41. By January 2020, a total of $1,177,416.19 had been transferred from the Investor
Collateral Account to the PCL Account to cover JL REDC’s obligations.
42. From March 2017 to February 2021, Azarmehr, acting on behalf of Lender and
Developer, continuously pledged the funds in the Investor Collateral Account as collateral for the
PCL Account. During these almost four years, Azarmehr, Lender, and Developer could not use
these investor funds for the construction and development of the Nevada Project as promised.
43. Even after $10 million in investor funds were pledged as collateral for the PCL, the
Defendants received four additional EB-5 investments in the Nevada Project. These investors
signed the same Nevada Project Offering Documents, which contained no disclosures about the
misappropriation of prior investments. That omission was materially misleading because investors
would reasonably want to know that, to date, most of the EB-5 investor funds had not been spent on
the EB-5 project they were investing in. Instead, the funds were pledged to resolve JL REDC’s
unrelated debt and thus not available for the development of three skilled nursing facilities and the
creation of jobs, which these investors’ eligibility for a Green Card depended upon. At the time
when Azarmehr, on behalf of Lender, accepted additional EB-5 investments after establishing the
Investor Collateral Account she knew, or was reckless or negligent in not knowing, about the
misappropriation of investor funds and their diversion to an unrelated JL REDC project.
44. Gradually, through a series of repayments, all the EB-5 investor funds that were
transferred to the PCL were returned to the Investor Collateral Account by February 9, 2021. The
funds were then returned to the Developer Operating Account and the Investor Collateral Account
was closed.

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45. As of the date of this Complaint, the Nevada Project has not been completed as
originally designed, and none of the 28 EB-5 investors have received a Green Card from their
investment in the Nevada Project.
D. Investments in the Nevada Project Offering Were Securities
46. The Defendants offered and sold securities under the federal securities laws to the
investors of the Nevada Project Offering.
47. As part of the Nevada Project Offering, investors made an investment of
approximately $500,000 toward the development of the Nevada Project. This complied with the
regulations governing the EB-5 Program, which included that investors place “the required amount
of capital at risk for the purpose of generating a return in the capital placed at risk.” See 8 C.F.R. §
204.6.
48. Lender pooled the investor funds it received as part of a common enterprise to make
a loan to Developer for the Nevada Project. In exchange for his/her investment, each investor
received a unit in Lender entitling him/her to the same rights and expectation of benefits from
participating in the Nevada Project Offering.
49. Each investor expected to receive his/her capital contribution returned as well as
interest accruing on the loan from Lender to Developer.
50. The terms of the Nevada Project Offering Documents reflected that this accrual of
interest required investors to rely on the efforts of Azarmehr, Lender, Developer, and their
employees and agents to generate a return sufficient to repay the loan from Lender to Developer
with interest. The terms of the Nevada Project Offering Documents also represented that
management control of investments in the Nevada Project was vested in the hands of Azarmehr,
Lender, and Developer and not the investors.
51. In addition, the Nevada Project Offering Documents acknowledged that investors
were being offered “securities” that were purportedly exempt from the registration requirements of
the federal securities laws.

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E. Defendants Acted With Scienter
52. Because of her role overseeing the creation of the Nevada Project Offering
Documents, Azarmehr knew, or was reckless or negligent in not knowing, that the investor funds
raised in the Nevada Project Offering were to be used on the Nevada Project. Azarmehr also knew,
or was reckless or negligent in not knowing, that the Nevada Project Offering Documents did not
contain any disclosures about JL REDC’s use of the EB-5 investor funds or any risks arising from
JL REDC’s use of the funds for business expenditures or the Vermont Project. Azarmehr also knew,
or was reckless or negligent in not knowing, that the Nevada Project had no relation to the Vermont
Project.
53. Azarmehr knew, or was reckless or negligent in not knowing, that by pledging the
funds in the Investor Collateral Account as collateral for the PCL Account, she was directing
investor funds for purposes that were unrelated to the Nevada Project. Azarmehr also knew, or was
reckless or negligent in not knowing, that the interest rate on the PCL Account was lower than the
interest rate that JL REDC would pay on the Bank C line of credit on the Vermont Project, and that
JL REDC would save money by repaying Bank C’s line of credit.
54. In addition, Azarmehr knew, or was reckless or negligent in not knowing, that
pledging funds from the Investor Collateral Account exposed them to losses not anticipated by the
Nevada Project Offering Documents. The account opening agreement she signed made it clear that
once pledged as collateral, the funds in the Investor Collateral Account could be used by Bank A at
any time and without further action or authorization by her if JL REDC did not repay the PCL under
Bank A’s terms or if the value of the PCL fluctuated. Finally, Azarmehr knowingly, recklessly, or
negligently allowed funds from the Investor Collateral Account to be used to cover margin calls
arising from the PCL Account.
55. Azarmehr's scienter is attributable to each entity defendant by virtue of her position
or degree of control over each. Lender, Developer, and JL REDC each misappropriated investor
money by acting through Azarmehr, and her state of mind is therefore imputed to each.
F. Tolling Agreements
56.  Azarmehr, Lender, Developer, and JL REDC have entered into tolling agreements

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with the SEC, tolling the statute of limitations applicable to this action for the period of March 7,
2022 to April 7, 2024.
CLAIMS FOR RELIEF
First Claim for Relief
Fraud in the Offer or Sale of Securities
(Violations of Section 17(a) of the Securities Act Against All Defendants)

57. The SEC re-alleges and incorporates by reference paragraphs 1 through 56 above.
58. During the relevant time period, each Defendant, directly or indirectly, in the offer or
sale of securities by the use of means or instrumentalities of interstate commerce or by use of the
mails, knowingly, recklessly, or negligently: (a) employed devices, schemes, or artifices to defraud;
(b) obtained money or property by means of untrue statements of a material fact or by omitting to state
a material fact necessary in order to make the statements made, in light of the circumstances under
which they were made, not misleading; and (c) engaged in transactions, practices, or courses of
business which operated or would operate as a fraud or deceit upon the purchaser. As alleged above,
Defendants knowingly, recklessly, or negligently engaged in deceptive conduct and made materially
false statements and misleading omissions concerning how investors’ funds would be used, by
pledging investor money as collateral for JL REDC’s debts that were unrelated to the Nevada Project.
That information, had it been disclosed, would have been significant information to investors, because
it would have affected the investors’ understanding of the overall terms, conditions, risks, and costs
associated with their EB-5 investments.
59. By engaging in the conduct described above, each of the Defendants violated Section
17(a) of the Securities Act [15 U.S.C. § 77q(a)].
Second Claim for Relief
Fraud in Connection with the Offer or Sale of Securities
(Violations of Section 10(b) of the Exchange Act and
Rules 10b-5(a) and (c) Thereunder Against All Defendants)

60. The SEC re-alleges and incorporates by reference paragraphs 1 through 56 above.
61. During the relevant time period, each Defendant, directly or indirectly, in connection
with the offer or sale of a security, and by the use of means or instrumentalities of interstate

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commerce or by use of the mails, knowingly or recklessly: (a) employed devices, schemes, or
artifices to defraud; or (c) engaged in transactions, practices, or courses of business which operated
or would operate as a fraud or deceit upon other persons. Defendants knowingly or recklessly
engaged in deceptive conduct concerning how investors’ funds would be used, by pledging investor
money as collateral for JL REDC’s debts that were unrelated to the Nevada Project. That
information, had it been disclosed, would have been significant information to investors, because it
would have affected the investors’ understanding of the overall terms, conditions, risks, and costs
associated with their EB-5 investments.
62. By engaging in the conduct described above, each Defendant violated Section 10(b)
of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5(a) and (c) [17 C.F.R. § 240.10b-5]
thereunder.
Third Claim for Relief
Fraud in Connection with the Purchase or Sale of Securities
(Violations of Sections 10(b) of the Exchange Act and Rules 10b-5(b) Thereunder
Against Defendants Azarmehr and Lender)

63. The SEC re-alleges and incorporates by reference paragraphs 1 through 56 above.
64. During the relevant time period, Defendants Azarmehr and Lender, directly or
indirectly, in connection with the offer or sale of a security, and by the use of means or
instrumentalities of interstate commerce or by use of the mails, (b) made untrue statements of a
material fact or omitted to state a material fact necessary in order to make the statements made, in
the light of the circumstances under which they were made, not misleading. As alleged above,
Defendants Azarmehr and Lender knowingly or recklessly made materially false statements and
misleading omissions concerning how investors’ funds would be used. That information, had it been
disclosed, would have been significant information to investors, because it would have affected the
investors’ understanding of the overall terms, conditions, risks, and costs associated with their EB-5
investments.
65. By engaging in the conduct described above, Defendants Azarmehr and Lender
violated Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5(b) [17 C.F.R. §
240.10b-5] thereunder.

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PRAYER FOR RELIEF
WHEREFORE, the SEC respectfully requests that this Court enter a Final Judgment:
I.
Finding that Defendants committed the violations alleged in this Complaint.
II.
Permanently enjoining Defendants and their agents, servants, employees, and attorneys, and
those persons in active concert or participation with any of them, who receive actual notice of the
judgment by personal service or otherwise, and each of them, from violating Section 17(a) of the
Securities Act, 15 U.S.C. § 78q(a); Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule
10b-5 thereunder, 17 C.F.R. § 240.10b-5.
III.
Permanently enjoining Defendants from, directly or indirectly, (1) participating in the offer
or sale of any security which constitutes, or is promoted as constituting, a qualifying investment in a
“commercial enterprise” under the United States Government EB-5 visa program administered by
the United States Citizenship and Immigration Service; and (2) participating in the management or
supervision of, or otherwise exercising any control over, any commercial enterprise or project that
has issued or is issuing any securities which constitute, or are promoted as constituting, qualifying
investments under the EB-5 visa program.
IV.
Ordering Defendants to disgorge all ill-gotten gains they received directly or indirectly, with
pre-judgment interest thereon, as a result of the alleged violations, pursuant to Exchange Act Sections
21(d)(3), 21(d)(5), and 21(d)(7), 15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7).
V.
Ordering Defendants to pay civil penalties under Section 20(d) of the Securities Act, 15 U.S.C.
§ 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3).

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VI.
Retaining jurisdiction of this action in accordance with the principles of equity and the Federal
Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that
may be entered, or to entertain any suitable application or motion for additional relief within the
jurisdiction of this Court.
VII.
Granting such other and further relief as this Court may determine to be just and necessary.
JURY DEMAND
 Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission demands trial by
jury in this action of all issues so triable.

Dated: April 11, 2024   s/ Rebecca R. Dunnan
Rebecca R. Dunnan
H. Norman Knickle*
Attorneys for Plaintiff
Securities and Exchange Commission

       *Pending Motion to Permit Appearance

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Rebecca R. Dunnan (DC Bar No. 90019733) 
Email: [email protected]  
Telephone: (202) 551-3813  
Facsimile: (703) 420-6032   
 
H. Norman Knickle (RI Bar No. 4957) 
Email: [email protected]  
 
Attorneys for Plaintiff 
Securities and Exchange Commission 
100 F Street, NE 
Washington DC 20549 

UNITED STATES DISTRICT COURT 
DISTRICT OF NEVADA 

 

SECURITIES AND EXCHANGE 
COMMISSION, 

Plaintiff, 
 

vs. 

LIXIN AZARMEHR, JL REAL ESTATE 
DEVELOPMENT CORPORATION, 
NEVADA SKILLED NURSING LENDER, 
LLC, and NEVADA SKILLED NURSING 
DEVELOPMENT, LLC,  

 
Defendants.  
 

  
 
Case No. 2:24-cv-707 
 
COMPLAINT 
 
JURY DEMAND 

 
 

Plaintiff Securities and Exchange Commission (the “SEC” or “Commission”), for its 

Complaint against Defendants Lixin Azarmehr (“Azarmehr”), JL Real Estate Development 

Corporation (“JL REDC”), Nevada Skilled Nursing Lender, LLC (“Lender”), and Nevada Skilled 

Nursing Development, LLC (“Developer”) (collectively, the “Defendants”), alleges as follows: 

JURISDICTION AND VENUE 

1. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d)(1), and 

22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77t(b), 77t(d)(1), and 77v(a), 

and Sections 21(d)(1), 21(d)(3)(A), 21(e), and 27(a) of the Securities and Exchange Act (“Exchange 

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Act”), 15 U.S.C. §§ 78u(d)(1), 78u(d)(3)(A), 78u(e), and 78aa.  

2. In connection with the conduct alleged in this Complaint, the Defendants have, 

directly or indirectly, made use of the means or instrumentalities of interstate commerce, of the 

mails, or of the facilities of a national securities exchange. 

3. Venue is proper in this district pursuant to Section 22(a) of the Securities Act [15 

U.S.C. § 77v(a)], and Section 27 of the Exchange Act [15 U.S.C. § 78aa(a)], because certain of the 

transactions, practices, or courses of conduct constituting violations of the federal securities laws 

occurred within this district. In addition, venue is proper in this district because Defendants transact 

business in this district, Azarmehr resides in this district, and Developer maintains an office in this 

district.  

SUMMARY 

4. This case involves a fraudulent scheme perpetrated by Azarmehr and three entities 

she manages — JL REDC, Lender, and Developer — to use funds solicited for the development of 

three skilled nursing home facilities in the Las Vegas, Nevada area (the “Nevada Project”) for an 

unrelated real estate project contrary to disclosures to investors.  

5. From at least September 2015 through March 2018, Azarmehr and others acting on 

behalf of these entities offered and sold securities in the Nevada Project, raising $14 million from 

28 investors. The Defendants structured these investments to comply with the federal U.S. 

Citizenship and Immigration Service’s (“USCIS”) EB-5 Immigrant Investor Program (“EB-5 

Program”). Under the EB-5 Program, investors are eligible for ten-year permanent residency visas 

(“Green Cards”) to live and work in the United States if they make a qualifying investment in a new 

commercial enterprise in the United States that creates or preserves a certain number of permanent 

full-time jobs for qualified U.S. workers.  

6. In offering documents for the Nevada Project, Azarmehr and Lender represented to 

investors that the project met the qualifications of the EB-5 Program and that investor funds would 

be used solely for the construction and administration of the Nevada Project, through loans from 

Lender to Developer. But instead of allocating these investments as promised, the Defendants 

redirected most of the money raised for other purposes. 

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7. In March of 2017, Azarmehr, on behalf of Developer and JL REDC, pledged $10 

million in investor funds as collateral to support JL REDC’s receipt of a priority credit line from 

Bank A (the “PCL” or the “PCL Account”). The PCL had lower interest rates than other lines of 

credit available to JL REDC at the time. JL REDC then used the PCL to pay off a higher interest 

rate loan for a separate JL REDC real estate venture – an uncompleted mixed-use project located at 

631 S. Vermont Avenue, near the Koreatown neighborhood of Los Angeles (the “Vermont 

Project”). Using the investor fund-backed PCL saved JL REDC substantial costs in interest 

payments.  

8. For almost four years (from March 2017 to February 2021), the pledged investor 

funds were subject to seizure by Bank A if JL REDC did not meet its obligations. The Nevada 

Project offering documents did not disclose to investors that investor funds could be used by or for 

JL REDC. Nor did they disclose that investor funds were at risk as pledged collateral for an 

unrelated real estate debt. While these funds were securing the PCL, they were also unavailable for 

their promised use – the construction of three skilled nursing facilities in the Las Vegas area. 

9. To date, none of the EB-5 investors have received a Green Card in connection with 

their investment in the Nevada Project. 

10. By engaging in this conduct and as alleged further herein, all Defendants violated the 

antifraud provisions of Section 17(a)(1), (2), and (3) of the Securities Act, 15 U.S.C. § 77q(1-3) and 

Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rules 10b-5(a) and (c) thereunder, 17 

C.F.R. §240.10b-5(a) and (c). Additionally, by engaging in this conduct and as alleged further 

herein, Defendants Azarmehr and Lender violated Section 10(b) of the Exchange Act and Rule 10b-

5(b) thereunder, 17 C.F.R. §240.10b-5(b). 

THE DEFENDANTS 

11. Azarmehr, age 56, is a resident of Las Vegas, Nevada, and has been licensed to 

practice law in California since 2008. She has worked primarily in the areas of real estate 

development and immigration law for the past twenty years. Azarmehr is the co-founder of JL 

REDC, and she is and has been its Chief Executive Officer since its founding in 2015. Azarmehr 

also has an ownership interest in JL REDC. Azarmehr has never been registered with the SEC in 

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any capacity. 

12. JL Real Estate Development Corporation (“JL REDC”) is a real estate company 

focused on developing projects in southern California and Nevada. JL REDC is a California close 

corporation with its headquarters located at 707 Wilshire Boulevard in Los Angeles. JL REDC 

advertises renderings of three projects on its publicly available website: (1) the Nevada Project; (2) 

the Vermont Project; and (3) the “Rocca Project,” a planned residential complex located in the Bel 

Air neighborhood of Los Angeles. Since at least 2015, JL REDC has at times done business in the 

United States as “Jia Long USA” or “Jia Long Group USA,” although it is not registered in Nevada, 

California, or elsewhere under either name. 

13. Nevada Skilled Nursing Lender, LLC (“Lender”) was incorporated in 2015 as a 

Nevada limited liability company. Lender is the issuer of the securities in this case and was created 

to raise capital under the EB-5 Program. Lender sold such securities in the form of LLC units under 

a private placement memorandum (“PPM”) purporting to qualify for the registration exemption 

under Section 4(2) of the Securities Act.  

14. Nevada Skilled Nursing Development, LLC (“Developer”) was created in 2015 as 

a Nevada limited liability company. Lender functioned as a vehicle to receive investor funds to loan 

to Developer. Developer then functioned as the job-creating entity for the purposes of EB-5 

Program eligibility.  

ASSOCIATED PARTIES 

15. Nevada Investment Regional Center, LLC (“NIRC”) was created in 2013 as a 

Nevada limited liability company. NIRC serves as a “regional center,” which was set up to 

administer investments in the EB-5 Program as required by USCIS. Azarmehr and two other 

individuals are listed as the managing members of NIRC.  

16. Lender Manager, LLC (“Manager”) is another Nevada limited liability company 

incorporated by Azarmehr in 2015. At all relevant times, Manager was a wholly owned subsidiary 

of NIRC. In turn, Manager managed Lender.  

17. The co-founder and Chairman of JL REDC (“Co-Founder”) is a resident of Beijing, 

China. On JL REDC’s publicly available website, Co-Founder’s biography states he is the founder 

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and owner of several real estate development projects in Beijing, Hainan, Hong Kong, and 

Shenzhen. The website claims that the assets of Co-Founder’s Beijing-based company total over $3 

billion.   

18. Jia Long Holdings, LLC (“Jia Long”) is a Nevada limited liability company that 

was formed in 2015. Azarmehr and Co-Founder are also the managers of Jia Long, each with an 

ownership interest in the company. At all relevant times, Jia Long was the manager of Developer. 

THE FRAUDULENT SCHEME 

A. The Nevada Project EB-5 Offering 

19. On September 4, 2015, Azarmehr founded the various Nevada Project entities — 

Lender, Developer, and Manager — to raise money and ultimately build three skilled nursing 

facilities. The plan for these facilities was to develop 15-acres in the Las Vegas and Henderson 

areas to house more than 400 beds licensed to provide room, board, and specialized nursing care for 

senior citizens. The projected cost to acquire land and develop the three facilities constituting the 

Nevada Project was approximately $69 million. The Nevada Project planned to raise $57 million 

from 114 foreign investors, and an additional $12 million from private equity contributions.  

20. To attract foreign investment, Azarmehr sought to qualify the Nevada Project under 

the EB-5 Program. On March 17, 2014, Azarmehr filed an application (“Form I-924”) with USCIS 

to create such an investment opportunity through NIRC. On July 15, 2014, USCIS conditionally 

granted the application. In 2015 and 2016 addendums to the original Form I-924, Azarmehr 

identified Lender as the new commercial enterprise (investment vehicle) and Developer as the job-

creating entity to be considered under the EB-5 Program. Azarmehr signed these USCIS 

applications as the managing member of NIRC.  

21. On or about September 2015, Azarmehr oversaw the creation of a “Business Plan,” a 

confidential PPM, and a “Subscription Agreement” (the “Nevada Project Offering Documents”) for 

the purpose of partially financing the Nevada Project through an EB-5 offering (the “Nevada 

Project Offering”). Azarmehr reviewed the Nevada Project Offering Documents before they were 

provided to investors. As the manager and officer of the Nevada Project entities, Azarmehr signed 

the Subscription Agreement, which incorporated the terms of the PPM, on behalf of Lender, 

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Manager, and NIRC. The PPM also directed that “[a]ll inquiries concerning this offering 

memorandum and the offering” be directed to Azarmehr. 

22. The Nevada Project Offering solicited an investment of $500,000 from each EB-5 

investor with an added $50,000 administrative fee to be paid into a different bank account. For each 

$500,000 investment, an investor received one of the 114 units in Lender. If all 114 units were sold, 

Lender would raise a total of $57 million. 

23. The Nevada Project Offering Documents limited Developer’s use of investor funds 

to the construction and operation of the Nevada Project. Specifically, the PPM stated: 

“[Lender] intends to use the net proceeds from the sale of the Units to make the Loan to 
the [Developer], which will use the proceeds for working capital, and for other 
general corporate purposes, to begin construction and facility operations of one of 
three planned skilled nursing facilities in the Las Vegas-Henderson NV area, as 
more fully described in the Business Plan in Exhibit B. The [Developer] plans projects 
involving the construction and operation of three 143-bed skilled nursing facilities 
located in (i) East Las Vegas, Nevada, (ii) Henderson, Nevada, and (iii) South West Las 
Vegas, Nevada. The [Lender] will make the Loan for these three projects, to be 
determined by the Manager in its sole discretion” (emphasis added).   
 
24. Similarly, the Business Plan represented that loan proceeds would be used to develop 

the Nevada Project: “[Developer] will use the proceeds of the loan and contribute funds as capital 

contribution to each of the Project’s developments.” 

25. These representations that investor funds would be used to develop and operate three 

skilled nursing facilities and create jobs through the Nevada Project were material because these 

were requirements upon which investors’ eligibility for the EB-5 Program depended. The creation 

or preservation of a certain number of permanent full-time jobs is necessary for each investor to 

qualify for a Green Card. Based on the language in the Nevada Project Offering Documents, 

investors could reasonably expect that their investments would be used in furtherance of that goal 

and not diverted for unrelated projects that did not further their ability to obtain a Green Card.  

26. The Nevada Project Offering Documents also claimed that investors could expect to 

receive a return on their investment if the project was successful. The PPM promised that the loan 

from Lender to Developer would “accrue simple interest at 3.0% per annum.” Developer would 

make “interest-only payments of one (1%) percent on each anniversary of the loan agreement until 

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the Loan Maturity date.” “At the end of the Term, the [Developer] will be required to promptly pay 

in full to the [Lender] the outstanding loan amount, and all accrued but unpaid interest.” The 

“Term” of the loan was defined as “the earlier to occur of (a) five years after the date of the Loan or 

(b) the sale of the business by the [Developer] (“Loan Maturity”).”  

27. In sum, investors reasonably expected to receive (1) the ability to apply for a Green 

Card if the Nevada Project met the EB-5 Program requirements, and (2) accrued interest of 1% as 

well as a return of their principal at the end of the loan Term.  

28. The Nevada Project Offering Documents explained that each investor’s investment 

was subject to “risk factors” that could cause “a possible total loss of investment.” The PPM 

explicitly identified those risks as relating to (1) “Immigration & The EB-5 Visa Program,” (2) 

“The Loan,” and (3) “Borrower’s Operations.” With respect to the loan, the PPM acknowledged 

that the “high degree of risk involved with the ability of the [Developer] to repay the Loan” was 

based in part on Developer’s “ability not only to construct and operate skilled nursing facilities, but 

to populate those facilities so that they will operate profitably.”  

29. None of the Nevada Project Offering Documents identified any risk to investors’ 

expected return or EB-5 eligibility arising from their investments being pledged as collateral for 

outstanding debts from an unrelated business venture. Nor did the Offering Documents identify any 

risk related to unrelated real estate projects, such as JL REDC’s Vermont Project. In fact, the 

Nevada Project Offering Documents made no mention or reference to JL REDC or the Vermont 

Project at all.  

B. Solicitation of Investors  

30. Beginning in September 2015, Co-Founder and agents working on behalf of the 

Nevada Project Offering solicited investors. Co-Founder primarily solicited investors in China by 

sharing the Nevada Project Offering Documents and other marketing materials to promote the 

project. Promotional materials circulated for the Nevada Project listed “Jia Long Group USA” as 

the developer.   

31. Azarmehr was aware that these marketing materials were created and disseminated 

to investors. She also developed marketing materials of her own. For instance, on December 30, 

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2015, Azarmehr sent a draft newsletter to her assistant for revision and formatting. The newsletter 

described the Nevada Project as operated by “Jia Long USA.” The website provided in the 

newsletter for Jia Long USA redirects to the JL REDC website. Since at least 2016 through the date 

of this Complaint, JL REDC’s website has advertised the Nevada Project as one of its real estate 

development projects.  

32. Starting in September 2015 and continuing until at least March 2018, 28 investors 

participated in the Nevada Project Offering and invested a total of $14 million. Each investor 

invested approximately $500,000. Some investors also paid a $50,000 administrative fee. As 

outlined in the Nevada Project Offering Documents, between 2015 and 2018, each investor sent 

their investment to a holding account at Bank A controlled by Lender (the “Investor Holding 

Account”).  

33. Between 2015 and 2018, Lender executed eight promissory notes to loan a total of 

approximately $14 million in investor funds to Developer, as described in the Nevada Project 

Offering Documents. Lender transferred these funds from the Investor Holding Account to 

Developer’s bank account at Bank B (“Developer’s Operating Account”). As of March 15, 2017, 

Developer held approximately $10 million in funds raised from investors in the Nevada Project 

Offering in Developer’s Operating Account. Azarmehr knew that the funds in Developer’s 

Operating Account were investor funds for use in the Nevada Project. 

C. The Defendants Misappropriated and Misused Investor Funds   

34. Also in March of 2017, JL REDC’s $12 million loan for the Vermont Project was 

coming due. Azarmehr knew this debt had to be repaid or extended by March 31, 2017, or Bank C 

would apply an interest rate of 24% per year. 

35. On or about March 14, 2017, Azarmehr opened a new account with Bank A in the 

name of Developer (the “Investor Collateral Account”), as well as a priority credit line account in 

the name of JL REDC (the “PCL” or the “PCL Account”). The Investor Collateral Account was 

funded with the $10 million in investor funds that were loaned from Lender to Developer in 

accordance with the Nevada Project Offering Documents.  

36. On or about March 17, 2017, Azarmehr, acting on behalf of both Developer and JL 

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REDC, pledged the funds in the Investor Collateral Account as a guaranty for obligations incurred 

by the PCL Account. Specifically, Azarmehr granted a “continuing first priority perfected security 

interest” in all assets held in the Investor Collateral Account to Bank A. This was part of ensuring 

repayment of the credit Bank A had extended to JL REDC in the PCL Account.  

37. Throughout March 2017, Azarmehr discussed her intentions for the Investor 

Collateral Account and the PCL Account with representatives from Bank A. For instance, on or 

about March 20, 2017, contemporaneous notes taken by Bank A personnel indicate that Azarmehr 

and a bank representative discussed Azarmehr’s plan to use the PCL funds for investment and 

“bridge financing” and that Azarmehr did not have immediate plans to pay off the PCL. Notes 

further indicate that Azarmehr and a representative from Bank A discussed that money wired out of 

the PCL would be used for funding, finishing up projects, or repaying previously provided 

financing.  

38. On or about March 27, 2017, Azarmehr directed Bank A to wire $8.99 million from 

the newly opened PCL Account to Bank C to pay off the remaining balance of JL REDC’s loan for 

the Vermont Project. JL REDC’s debt to Bank C accrued interest at a rate of 7.9%, whereas the new 

investor fund-backed PCL had a rate of only 3.1%. From that point forward, the Investor Collateral 

Account was at risk if JL REDC failed to repay the PCL for JL REDC’s Vermont Project debt, 

which had nothing to do with the Nevada Project.   

39. The funds in the Investor Collateral Account were also in jeopardy for other reasons. 

Under the terms of the PCL, the value of the securities and mutual funds backing JL REDC’s loan 

from Bank A could increase or decrease in response to market fluctuations, interest rates, general 

economic conditions, and other factors. If the value of this backing fluctuated, so too would the 

value of the Investor Collateral Account supporting the PCL. “[I]n order to maintain the required 

equity” in the Investor Collateral Account, Bank A could “force the sale of securities or other 

assets” in the Investor Collateral Account without notice to Azarmehr, without allowing Azarmehr 

to decide which securities or assets would be sold, and without allowing Azarmehr an opportunity 

to provide additional funds or assets. These demands for further cash or securities to cover losses to 

the PCL are known as margin calls. Azarmehr personally signed an agreement with these terms and 

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appeared before a notary public on March 17, 2017 to do so. 

40. In fact, between November 30, 2018 and January 14, 2020, Bank A required such 

additional funding to cover eight margin calls on the Investor Collateral Account. On at least three 

of these occasions, Azarmehr and other JL REDC employees approved the transfer of funds from 

the Investor Collateral Account to satisfy these margin calls. However, during this same timeframe, 

Bank A also automatically transferred funds from the Investor Collateral Account to the PCL 

Account under the terms that Azarmehr agreed to.  

41. By January 2020, a total of $1,177,416.19 had been transferred from the Investor 

Collateral Account to the PCL Account to cover JL REDC’s obligations. 

42. From March 2017 to February 2021, Azarmehr, acting on behalf of Lender and 

Developer, continuously pledged the funds in the Investor Collateral Account as collateral for the 

PCL Account. During these almost four years, Azarmehr, Lender, and Developer could not use 

these investor funds for the construction and development of the Nevada Project as promised.  

43. Even after $10 million in investor funds were pledged as collateral for the PCL, the 

Defendants received four additional EB-5 investments in the Nevada Project. These investors 

signed the same Nevada Project Offering Documents, which contained no disclosures about the 

misappropriation of prior investments. That omission was materially misleading because investors 

would reasonably want to know that, to date, most of the EB-5 investor funds had not been spent on 

the EB-5 project they were investing in. Instead, the funds were pledged to resolve JL REDC’s 

unrelated debt and thus not available for the development of three skilled nursing facilities and the 

creation of jobs, which these investors’ eligibility for a Green Card depended upon. At the time 

when Azarmehr, on behalf of Lender, accepted additional EB-5 investments after establishing the 

Investor Collateral Account she knew, or was reckless or negligent in not knowing, about the 

misappropriation of investor funds and their diversion to an unrelated JL REDC project. 

44. Gradually, through a series of repayments, all the EB-5 investor funds that were 

transferred to the PCL were returned to the Investor Collateral Account by February 9, 2021. The 

funds were then returned to the Developer Operating Account and the Investor Collateral Account 

was closed.  

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45. As of the date of this Complaint, the Nevada Project has not been completed as 

originally designed, and none of the 28 EB-5 investors have received a Green Card from their 

investment in the Nevada Project.  

D. Investments in the Nevada Project Offering Were Securities   

46. The Defendants offered and sold securities under the federal securities laws to the 

investors of the Nevada Project Offering. 

47. As part of the Nevada Project Offering, investors made an investment of 

approximately $500,000 toward the development of the Nevada Project. This complied with the 

regulations governing the EB-5 Program, which included that investors place “the required amount 

of capital at risk for the purpose of generating a return in the capital placed at risk.” See 8 C.F.R. § 

204.6. 

48. Lender pooled the investor funds it received as part of a common enterprise to make 

a loan to Developer for the Nevada Project. In exchange for his/her investment, each investor 

received a unit in Lender entitling him/her to the same rights and expectation of benefits from 

participating in the Nevada Project Offering. 

49. Each investor expected to receive his/her capital contribution returned as well as 

interest accruing on the loan from Lender to Developer. 

50. The terms of the Nevada Project Offering Documents reflected that this accrual of 

interest required investors to rely on the efforts of Azarmehr, Lender, Developer, and their 

employees and agents to generate a return sufficient to repay the loan from Lender to Developer 

with interest. The terms of the Nevada Project Offering Documents also represented that 

management control of investments in the Nevada Project was vested in the hands of Azarmehr, 

Lender, and Developer and not the investors.    

51. In addition, the Nevada Project Offering Documents acknowledged that investors 

were being offered “securities” that were purportedly exempt from the registration requirements of 

the federal securities laws. 

 

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E. Defendants Acted With Scienter 

52. Because of her role overseeing the creation of the Nevada Project Offering 

Documents, Azarmehr knew, or was reckless or negligent in not knowing, that the investor funds 

raised in the Nevada Project Offering were to be used on the Nevada Project. Azarmehr also knew, 

or was reckless or negligent in not knowing, that the Nevada Project Offering Documents did not 

contain any disclosures about JL REDC’s use of the EB-5 investor funds or any risks arising from 

JL REDC’s use of the funds for business expenditures or the Vermont Project. Azarmehr also knew, 

or was reckless or negligent in not knowing, that the Nevada Project had no relation to the Vermont 

Project.  

53. Azarmehr knew, or was reckless or negligent in not knowing, that by pledging the 

funds in the Investor Collateral Account as collateral for the PCL Account, she was directing 

investor funds for purposes that were unrelated to the Nevada Project. Azarmehr also knew, or was 

reckless or negligent in not knowing, that the interest rate on the PCL Account was lower than the 

interest rate that JL REDC would pay on the Bank C line of credit on the Vermont Project, and that 

JL REDC would save money by repaying Bank C’s line of credit.  

54. In addition, Azarmehr knew, or was reckless or negligent in not knowing, that 

pledging funds from the Investor Collateral Account exposed them to losses not anticipated by the 

Nevada Project Offering Documents. The account opening agreement she signed made it clear that 

once pledged as collateral, the funds in the Investor Collateral Account could be used by Bank A at 

any time and without further action or authorization by her if JL REDC did not repay the PCL under 

Bank A’s terms or if the value of the PCL fluctuated. Finally, Azarmehr knowingly, recklessly, or 

negligently allowed funds from the Investor Collateral Account to be used to cover margin calls 

arising from the PCL Account. 

55. Azarmehr's scienter is attributable to each entity defendant by virtue of her position 

or degree of control over each. Lender, Developer, and JL REDC each misappropriated investor 

money by acting through Azarmehr, and her state of mind is therefore imputed to each.   

F. Tolling Agreements  

56.  Azarmehr, Lender, Developer, and JL REDC have entered into tolling agreements 

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with the SEC, tolling the statute of limitations applicable to this action for the period of March 7, 

2022 to April 7, 2024. 

CLAIMS FOR RELIEF 

First Claim for Relief 
Fraud in the Offer or Sale of Securities 

(Violations of Section 17(a) of the Securities Act Against All Defendants) 
 
57. The SEC re-alleges and incorporates by reference paragraphs 1 through 56 above. 

58. During the relevant time period, each Defendant, directly or indirectly, in the offer or 

sale of securities by the use of means or instrumentalities of interstate commerce or by use of the 

mails, knowingly, recklessly, or negligently: (a) employed devices, schemes, or artifices to defraud; 

(b) obtained money or property by means of untrue statements of a material fact or by omitting to state 

a material fact necessary in order to make the statements made, in light of the circumstances under 

which they were made, not misleading; and (c) engaged in transactions, practices, or courses of 

business which operated or would operate as a fraud or deceit upon the purchaser. As alleged above, 

Defendants knowingly, recklessly, or negligently engaged in deceptive conduct and made materially 

false statements and misleading omissions concerning how investors’ funds would be used, by 

pledging investor money as collateral for JL REDC’s debts that were unrelated to the Nevada Project. 

That information, had it been disclosed, would have been significant information to investors, because 

it would have affected the investors’ understanding of the overall terms, conditions, risks, and costs 

associated with their EB-5 investments.  

59. By engaging in the conduct described above, each of the Defendants violated Section 

17(a) of the Securities Act [15 U.S.C. § 77q(a)]. 

Second Claim for Relief 
Fraud in Connection with the Offer or Sale of Securities 

(Violations of Section 10(b) of the Exchange Act and  
Rules 10b-5(a) and (c) Thereunder Against All Defendants) 

 
60. The SEC re-alleges and incorporates by reference paragraphs 1 through 56 above. 

61. During the relevant time period, each Defendant, directly or indirectly, in connection 

with the offer or sale of a security, and by the use of means or instrumentalities of interstate 

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commerce or by use of the mails, knowingly or recklessly: (a) employed devices, schemes, or 

artifices to defraud; or (c) engaged in transactions, practices, or courses of business which operated 

or would operate as a fraud or deceit upon other persons. Defendants knowingly or recklessly 

engaged in deceptive conduct concerning how investors’ funds would be used, by pledging investor 

money as collateral for JL REDC’s debts that were unrelated to the Nevada Project. That 

information, had it been disclosed, would have been significant information to investors, because it 

would have affected the investors’ understanding of the overall terms, conditions, risks, and costs 

associated with their EB-5 investments.   

62. By engaging in the conduct described above, each Defendant violated Section 10(b) 

of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5(a) and (c) [17 C.F.R. § 240.10b-5] 

thereunder. 

Third Claim for Relief 
Fraud in Connection with the Purchase or Sale of Securities 

(Violations of Sections 10(b) of the Exchange Act and Rules 10b-5(b) Thereunder  
Against Defendants Azarmehr and Lender)  

 
63. The SEC re-alleges and incorporates by reference paragraphs 1 through 56 above. 

64. During the relevant time period, Defendants Azarmehr and Lender, directly or 

indirectly, in connection with the offer or sale of a security, and by the use of means or 

instrumentalities of interstate commerce or by use of the mails, (b) made untrue statements of a 

material fact or omitted to state a material fact necessary in order to make the statements made, in 

the light of the circumstances under which they were made, not misleading. As alleged above, 

Defendants Azarmehr and Lender knowingly or recklessly made materially false statements and 

misleading omissions concerning how investors’ funds would be used. That information, had it been 

disclosed, would have been significant information to investors, because it would have affected the 

investors’ understanding of the overall terms, conditions, risks, and costs associated with their EB-5 

investments. 

65. By engaging in the conduct described above, Defendants Azarmehr and Lender 

violated Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5(b) [17 C.F.R. § 

240.10b-5] thereunder. 

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PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that this Court enter a Final Judgment: 

I. 

Finding that Defendants committed the violations alleged in this Complaint.  

II. 

Permanently enjoining Defendants and their agents, servants, employees, and attorneys, and 

those persons in active concert or participation with any of them, who receive actual notice of the 

judgment by personal service or otherwise, and each of them, from violating Section 17(a) of the 

Securities Act, 15 U.S.C. § 78q(a); Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 

10b-5 thereunder, 17 C.F.R. § 240.10b-5. 

III. 

Permanently enjoining Defendants from, directly or indirectly, (1) participating in the offer 

or sale of any security which constitutes, or is promoted as constituting, a qualifying investment in a 

“commercial enterprise” under the United States Government EB-5 visa program administered by 

the United States Citizenship and Immigration Service; and (2) participating in the management or 

supervision of, or otherwise exercising any control over, any commercial enterprise or project that 

has issued or is issuing any securities which constitute, or are promoted as constituting, qualifying 

investments under the EB-5 visa program. 

IV. 

Ordering Defendants to disgorge all ill-gotten gains they received directly or indirectly, with 

pre-judgment interest thereon, as a result of the alleged violations, pursuant to Exchange Act Sections 

21(d)(3), 21(d)(5), and 21(d)(7), 15 U.S.C. §§ 78u(d)(3), 78u(d)(5), and 78u(d)(7). 

V. 

Ordering Defendants to pay civil penalties under Section 20(d) of the Securities Act, 15 U.S.C. 

§ 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3). 

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VI. 

Retaining jurisdiction of this action in accordance with the principles of equity and the Federal 

Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that 

may be entered, or to entertain any suitable application or motion for additional relief within the 

jurisdiction of this Court. 

VII.  

Granting such other and further relief as this Court may determine to be just and necessary. 

JURY DEMAND 

 Pursuant to Rule 38 of the Federal Rules of Civil Procedure, the Commission demands trial by 

jury in this action of all issues so triable. 

 

Dated: April 11, 2024   s/ Rebecca R. Dunnan  
Rebecca R. Dunnan 
H. Norman Knickle*  
Attorneys for Plaintiff 
Securities and Exchange Commission 

 
 
       *Pending Motion to Permit Appearance 

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