SEC Charges EB-5 Operator With Securities Fraud
Idaho man Serofim Muroff defrauded Chinese EB-5 investors of over $5 million from $140.5 million raised for job-creating real estate and mining projects, using the funds for personal luxuries, and agreed to pay over $7.9 million in disgorgement, interest, and penalties while being barred from EB-5 activities, with his bookkeeper Debra Riddle also fined for her role.
Serofim Muroff and his companies, Blackhawk Manager and ISR Capital, raised over $140.5 million from Chinese investors through the EB-5 program, promising to fund job-creating real estate and mining ventures in Idaho and Montana. Instead, Muroff misappropriated more than $5 million for personal expenses, including two residences, a Range Rover, a BMW, and a zip line business. In a settlement subject to court approval, Muroff agreed to pay $5.06 million in disgorgement, $865,270 in interest, and a $2 million penalty, while being barred from EB-5 offerings and corporate officer roles; his bookkeeper Debra Riddle agreed to pay $503,417 in disgorgement, $81,626 in interest, and a $100,000 penalty, with neither party admitting or denying the allegations.
Serofim Muroff, an Idaho resident, and his companies Blackhawk Manager and ISR Capital raised more than $140.5 million from Chinese investors through the EB-5 Immigrant Investor Program, promising to fund job-creating real estate developments in McCall, Idaho, and gold mining ventures in Idaho and Montana. Instead, Muroff siphoned over $5 million in investor funds for personal use, including the purchase of two residences, a Range Rover, a BMW, and an investment in a zip line operation. The SEC alleged that these actions constituted fraud, as the funds were never used for their intended economic purposes. In a settlement subject to court approval, Muroff agreed to pay $5,062,082 in disgorgement, $865,270 in interest, and a $2 million civil penalty, while also being permanently barred from participating in EB-5 offerings or serving as an officer or director of a public company. His bookkeeper and administrative assistant, Debra L. Riddle, agreed to pay $503,417 in disgorgement, $81,626 in interest, and a $100,000 penalty, without admitting or denying the allegations. The SEC’s investigation, led by agents in its San Francisco office and aided by U.S. Citizenship and Immigration Services, uncovered the misuse through financial records and witness testimony. The case underscores the SEC’s enforcement focus on EB-5 fraud and its commitment to protecting immigrant investors from misappropriation of funds meant to stimulate U.S. job creation.
Exhibits & Attached Documents (1)
Extracted insights
- $140.50M $140.5 million $100M–$1B
- $5.06M $5,062,082 $1M–$10M
- $5.00M $5 million $1M–$10M
- $2.00M $2 million $1M–$10M
- $865K $865,270 $100K–$1M
- $503K $503,417 $100K–$1M
- $100K $100,000 $100K–$1M
- $82K $81,626 $10K–$100K
- person Debra L. Riddle
- person idaho man
- agency sec investigation
- person Serofim Muroff
- person Steven D. Buchholz
- Idaho Man Agreed To Pay Back Several Million Dollars
- Serofim Muroff Raised More Than $140.5 Million In EB-5 Offerings To Chinese Investors
- Serofim Muroff Misappropriated More Than $5 Million In Investor Funds For Unrelated Uses
- Serofim Muroff And His Companies Agreed To Pay Disgorgement Of $5,062,082 Plus Interest Of $865,270 And Penalty Of $2 Million
- Serofim Muroff Agreed To Be Prohibited From Conducting EB-5 Offerings, Acting As Officer Or Director Of Public Company, Associating With Any Investment Adviser
- Debra L. Riddle Agreed To Pay Disgorgement Of $503,417 Plus Interest Of $81,626 And Penalty Of $100,000
- SEC Investigation Conducted By Alice Liu Jensen, Rahul Kolhatkar, And Ellen Chen
- Case Supervised By Steven D. Buchholz
The Securities and Exchange Commission today announced that an Idaho man has agreed to pay back several million dollars he siphoned away for personal use rather than investing it as promised to create U.S. jobs through the EB-5 Immigrant Investor Program. The SEC alleges that Serofim Muroff raised more than $140.5 million in EB-5 offerings to Chinese investors through his companies Blackhawk Manager and ISR Capital for the intended purposes of acquiring and developing luxury real estate in McCall, Idaho, and investing in gold mining ventures in Idaho and Montana. Muroff allegedly misappropriated more than $5 million in investor funds for such unrelated uses as an investment in a zip line operation as well as his purchase of two personal residences, a Range Rover, and a BMW. “As alleged in our complaint, Muroff secretly enriched himself with millions of dollars in EB-5 investor funds that should have gone into job-creating enterprises,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office. In the settlement, which is subject to court approval, Muroff and his companies agreed to pay disgorgement of $5,062,082 plus interest totaling $865,270 and a penalty of $2 million. Muroff also agreed to be prohibited from conducting EB-5 offerings, acting as an officer or director of a public company, and associating with any investment adviser. Muroff’s bookkeeper and administrative assistant Debra L. Riddle, who was charged in the SEC’s complaint along with Muroff and his companies, agreed to pay disgorgement of $503,417 plus interest totaling $81,626 and a penalty of $100,000. They neither admitted nor denied the allegations in the SEC’s complaint. The SEC’s investigation was conducted by Alice Liu Jensen, Rahul Kolhatkar, and Ellen Chen of the San Francisco office, and the case was supervised by Steven D. Buchholz. The SEC appreciates the assistance of U.S. Citizenship and Immigration Services.
The Securities and Exchange Commission today announced that an Idaho man has agreed to pay back several million dollars he siphoned away for personal use rather than investing it as promised to create U.S. jobs through the EB-5 Immigrant Investor Program. The SEC alleges that Serofim Muroff raised more than $140.5 million in EB-5 offerings to Chinese investors through his companies Blackhawk Manager and ISR Capital for the intended purposes of acquiring and developing luxury real estate in McCall, Idaho, and investing in gold mining ventures in Idaho and Montana. Muroff allegedly misappropriated more than $5 million in investor funds for such unrelated uses as an investment in a zip line operation as well as his purchase of two personal residences, a Range Rover, and a BMW. “As alleged in our complaint, Muroff secretly enriched himself with millions of dollars in EB-5 investor funds that should have gone into job-creating enterprises,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office. In the settlement, which is subject to court approval, Muroff and his companies agreed to pay disgorgement of $5,062,082 plus interest totaling $865,270 and a penalty of $2 million. Muroff also agreed to be prohibited from conducting EB-5 offerings, acting as an officer or director of a public company, and associating with any investment adviser. Muroff’s bookkeeper and administrative assistant Debra L. Riddle, who was charged in the SEC’s complaint along with Muroff and his companies, agreed to pay disgorgement of $503,417 plus interest totaling $81,626 and a penalty of $100,000. They neither admitted nor denied the allegations in the SEC’s complaint. The SEC’s investigation was conducted by Alice Liu Jensen, Rahul Kolhatkar, and Ellen Chen of the San Francisco office, and the case was supervised by Steven D. Buchholz. The SEC appreciates the assistance of U.S. Citizenship and Immigration Services.