Securities and Exchange Commission v Robert Yang Et Al

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
ZACHARY T. CARLYLE
[email protected]
SECURITIES AND EXCHANGE COMMISSION
Byron G. Rogers Federal Building
1961 Stout Street, Suite 1700
Denver, Colorado 80294-1961
Telephone:   (303)   844-1000
Facsimile:    (303)    297-3529

LOCAL COUNSEL:
David J. VanHavermaat, Cal. Bar No. 175761
[email protected]
SECURITIES AND EXCHANGE COMMISSION
444 S. Flower Street, Suite 900
Los Angeles, California 90071
Telephone:   (323)   965-3998
Facsimile:    (213)    443-1904

Attorneys for Plaintiff
Securities and Exchange Commission
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA
EASTERN DIVISION
SECURITIES AND EXCHANGE
COMMISSION,
Plaintiff,
vs.
R
OBERT YANG,
C
LAUDIA KANO,
S
UNCOR FONTANA, LLC,
S
UNCOR HESPERIA, LLC, AND
S
UNCOR CARE LYNWOOD, LLC
Defendants,
AND

Y
ANROB’S MEDICAL, INC.,
H
EALTHPRO CAPITAL PARTNERS, LLC,
AND SUNCOR CARE, INC.
Relief Defendants.
Case No.
COMPLAINT

DEMAND FOR JURY TRIAL

1

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Plaintiff  Securities  and  Exchange  Commission  (the  “Commission”)  for  its
complaint alleges as follows:
JURISDICTION AND VENUE
1. The Commission brings this action pursuant to the authority conferred
upon it by Sections 20(b) and (d) of the Securities Act [15 U.S.C. §§ 77t(b) and
77t(d)] and Sections 21(d) and (e) of the Exchange Act [15 U.S.C. §§ 78u(d) and
78u(e)].  Defendants, directly or indirectly, made use of the means or instruments of
transportation or communication in interstate commerce, the means and
instrumentalities of interstate commerce, or of the mails, in connection with the acts,
practices, and courses of business set forth in this Complaint.
2. This Court has jurisdiction over this action pursuant to Section 22(a) of
the Securities Act [15 U.S.C. § 77v(a)], Section 27 of the Exchange Act [15 U.S.C. §
78aa], and 28 U.S.C. § 1331.  Venue lies in this Court 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].  Defendants reside in this judicial district, all of the Suncor entity
Defendants and Relief Defendants are California entities, and certain of the acts,
practices, transactions, and courses of business alleged in this Complaint occurred
within the Central District of California.
SUMMARY
3. This case involves fraudulent misrepresentations and a fraudulent
scheme in connection with raising money from Chinese investors seeking to obtain
United States visas through the EB-5 program.  The EB-5 program is a federal
program that enables foreigners to obtain a U.S. visa by making investments in the
U.S.  Specifically, the EB-5 program requires foreigners seeking a visa under the
program to make an investment of at least $1 million (or at least $500,000 in an area
designated as rural or high unemployment), and create or preserve at least ten jobs for
U.S. workers.

2

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
4. From September 2012 through at least early 2014, Robert Yang and
Claudia Kano, through their affiliated entities (Suncor Fontana, LLC, Suncor
Hesperia, LLC, and Suncor Care Lynwood, LLC, collectively the “Suncor entities”),
raised $20 million from 40 investors located in China who sought to participate in the
EB-5 program.  Yang and Kano raised the funds through three fraudulent securities
offerings, one in the name of each of the Suncor entities, ostensibly for the
development of three medical facilities located in Fontana, Hesperia, and Lynwood,
California.
5. In each of the offerings, Yang, Kano, Suncor Fontana, LLC, Suncor
Hesperia, LLC, and Suncor Care Lynwood, LLC (collectively the “Defendants”)
made repeated statements in the offering documents indicating that investor funds
would “only” be used to develop the specific medical facility project in which they
invested.
6. These statements were false.  Yang and Kano engaged in a scheme to
misappropriate, divert, and misuse at least $10 million of investor funds.  Yang and
Kano repeatedly siphoned off investor funds for Yang’s personal benefit, to pay an
undisclosed 18% fee to a finder, and to pay for expenses of other projects in which
the investors have no interest.  There is an ongoing risk that Defendants will further
misappropriate or dissipate investor funds or dissipate assets purchased using investor
funds.
7. Yang and Kano also misrepresented to investors that their securities
offerings were “structured to maximize” the prospects that their investments would
qualify for the EB-5 program.  In fact, their misappropriation and misuse of investor
funds rendered the investments ineligible for the EB-5 program, which requires that
applicants demonstrate that all of their funds are made available to the business most
closely responsible for creating the jobs underlying their EB-5 applications.  The
Defendants’ false and misleading offering documents, which state that all investor
funds will be used for the specific projects, were submitted to the United States

3

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Citizenship and Immigration Service (“USCIS”), the agency responsible for
administering the EB-5 program, in support of the Suncor investor EB-5 applications.
8. The Suncor projects are years behind schedule.  For the Suncor Fontana
and Hesperia projects, which were marketed beginning in September 2012, the
offering documents represented that construction was “well under way” with
projected completion dates of September 2012 and September 2013, respectively.
The Suncor Lynwood project, which was marketed beginning in July 2013, projected
a completion date of February 2014.  As of today, none of the projects is operational
and they may never be completed.
9. As a result of the conduct described in the Complaint, Defendants have
violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §
77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act” )
[15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder, and unless
restrained and enjoined will engage in future violations of these provisions.  In the
alternative, Yang and Kano aided and abetted the Securities Act Section 17(a) and
Exchange Act Section 10(b) and Rule 10b-5 violations of the Defendant Suncor
entities, or are liable as control persons under Section 20(a) of the Exchange Act [15
U.S.C. § 78t(a)], for the Exchange Act Section 10(b) and Rule 10b-5 violations of the
Defendant Suncor entities and, unless restrained and enjoined, will engage in future
violations of the federal securities laws
10. The Commission seeks an order restraining and enjoining Defendants
from violating the federal securities laws and regulations, requiring Defendants to
perform an accounting, disgorge ill-gotten gains plus prejudgment interest, pay civil
penalties, and granting such other relief as is necessary and appropriate.
DEFENDANTS
11. Robert Yang, age 45 of Redlands, California, is the Owner/President of
the Defendant Suncor entities and relief defendants Suncor Fontana, LLC, Suncor
Hesperia, LLC, Suncor Care Lynwood, LLC, Yanrob’s Medical, Inc., HealthPro

4

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Capital Partners, LLC, and Suncor Care, Inc.  Yang is licensed to practice medicine
in California and owns his own medical practice specializing in geriatric care.
12. Claudia Kano, age 45 of Pomona, California acts as the Senior Vice
President and/or Manager of the Defendant Suncor entities and relief defendants
Suncor Fontana, LLC, Suncor Hesperia, LLC, Suncor Care Lynwood, LLC and is
responsible for their day-to-day operations.  Kano also serves as the administrative
manager of Yang’s medical practice.
13. Suncor Fontana, LLC (“Suncor Fontana”) is a California limited
liability company formed in 2012, with its principal place of business in San
Bernardino, California, to develop a sub-acute nursing care facility in Fontana,
California.  Suncor Fontana is the issuer of securities in the form of limited liability
company membership interests purchased by investors seeking to qualify for the EB-
5 program.  At all relevant times, Yang and Kano have exercised control over the
management, general operations, and policies of Suncor Fontana, as well as the
activities upon which Suncor Fontana’s violations of the federal securities laws are
based.
14. Suncor Hesperia, LLC (“Suncor Hesperia”) is a California limited
liability company formed in 2012 with its principal place of business in San
Bernardino, California, to develop a sub-acute nursing care facility in Hesperia,
California.  Suncor Hesperia is the issuer of securities in the form of limited liability
company membership interests purchased by investors seeking to qualify for the EB-
5 program.  At all relevant times, Yang and Kano have exercised control over the
management, general operations, and policies of Suncor Hesperia, as well as the
activities upon which Suncor Hesperia’s violations of the federal securities laws are
based.
15. Suncor Care Lynwood, LLC (aka Suncor Lynwood, LLC) (“Suncor
Lynwood”) is a California limited liability company formed in 2013 with its principal
place of business in San Bernardino, California, to develop a sub-acute nursing care

5

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
facility in Lynwood, California.  Suncor Lynwood is the issuer of securities in the
form of limited liability company membership interests purchased by investors
seeking to qualify for the EB-5 program.  At all relevant times, Yang and Kano have
exercised control over the management, general operations, and policies of Suncor
Lynwood, as well as the activities upon which Suncor Lynwood’s violations of the
federal securities laws are based.
RELIEF DEFENDANTS
16. Yanrob’s Medical, Inc. is a California corporation formed in 2002.
Yang runs his personal medical practice through Yanrob.  Suncor Hesperia and
Suncor Lynwood investor funds were transferred to bank accounts in the name of
Yanrob and used for a variety of purposes, including to pay Yang’s personal expenses
and to make payments related to the purchase and renovation of an office building
used for Yang’s medical practice.  At all relevant times, Yang and Kano have
exercised control over the management, general operations, and policies of Yanrob.
17. HealthPro Capital Partners, LLC is a California limited liability
company formed in 2009 with its principal place of business in San Bernardino,
California.  HealthPro is the obligor on a construction loan taken out by Yang in
February 2012 to develop the Suncor Fontana project.  Bank accounts in the name of
HealthPro received at least $128,000 of Suncor Lynwood investor funds that were
used to make payments on the Suncor Fontana construction loan.  At all relevant
times, Yang and Kano have exercised control over the management, general
operations, and policies of HealthPro.
18. Suncor Care, Inc. is a California corporation formed in 2008 with its
principal place of business in San Bernardino, California.  Suncor Lynwood investor
funds were used to purchase real property located near Redlands, California that is
held in Suncor Care’s name.  That property is not related to the Suncor Fontana,
Suncor Hesperia, or Suncor Lynwood projects.  At all relevant times, Yang and Kano

6

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
have exercised control over the management, general operations, and policies of
Suncor Care.
BACKGROUND OF SUNCOR
19. In 2008, using money from his medical practice, Yang purchased land in
Fontana, California for the purpose of building a sub-acute nursing facility, which
would specialize in providing care for chronically ill patients.  Yang aimed to profit
from owning and operating the facility and planned to shift his focus from patient
care to nursing facility management.
20.   After securing an initial construction loan, Yang and Kano purportedly
sought additional capital to operate the facility.  In or around May 2012, Yang and
Kano contacted a firm that offered to help them raise money for the Fontana project
from Chinese investors interested in immigrating to the United States through the EB-
5 program (the “Finder”).  The Finder told Yang and Kano that it could potentially
raise money from EB-5 investors for the development of other sub-acute care nursing
facilities in addition to the one planned for Fontana.
21. On September 12, 2012, on behalf of Suncor Fontana, Yang (as
President) and Kano (as Senior Vice President), signed a “Letter of Intent for EB-5
Services” with the Finder.  Under this letter of intent, the Finder agreed to raise up to
$3.5 million from 7 investors.  In exchange for the Finder’s services, Suncor Fontana
agreed to pay “a fee of $90,000 for each Investor (18% of each $500,000).”
22. On September 17, 2012, Yang and Kano again signed a letter of intent
for the Finder to raise another $10 million for the development of a sub-acute care
nursing facility to be located in Hesperia, California.  Yang and Kano again agreed
to pay the Finder 18% of each $500,000 investment.
23. On January 28, 2013, Yang and Kano signed a letter of intent, as
amended on July 5, 2013, for the Finder to raise $6 million for development of a sub-
acute care nursing facility located in Lynwood, California.  As before, Yang and
Kano agreed to pay the Finder 18% of each $500,000 investment.

7

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
THE OFFERINGS
24. With the assistance of the Finder, from approximately November 2012
to April 2014, Yang and Kano raised approximately $20 million from EB-5 program
applicants located in China.  The Defendants raised funds in three separate offerings
by entities created specifically for each of the Suncor projects as follows:
 From November to December 2012, Suncor Fontana raised $4.5 million
from 9 investors;
 From December 2012 to March 2014, Suncor Hesperia raised $9.5
million from 19 investors; and
 From September 2013 to April 2014, Suncor Lynwood raised $6 million
from 12 investors.
25. The investment structure and the potential benefits to investors were
presented in similar fashion for each project, and each offering had a similar set of
offering materials that contained an offering memorandum accompanied by several
exhibits, including an operating agreement for the issuing entity, a subscription
agreement, and an escrow agreement.  The offering memoranda are dated September
15, 2012 (Suncor Fontana), September 19, 2012 (Suncor Hesperia), and July 20, 2013
(Suncor Lynwood) (collectively, the “offering materials”).  The offering materials
were provided to investors in the Suncor entities.
26. Pursuant to the offerings, investors each purchased limited liability
company membership interests in the issuers for $500,000 – the minimum amount
necessary to qualify for the EB-5 program.
27. These membership interests were described as “securities” in the
offering documents.  The offering documents disclosed that day-to-day management
would be conducted by the designated manager, which, in the case of Suncor Fontana
and Suncor Hesperia, was Kano, and in the case of Suncor Lynwood, was Yang.
Under the operating agreements, members were prohibited from removing Yang or
Kano as manager for at least five years.

8

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
28. After executing a subscription agreement and an escrow agreement,
which were counter-signed by Yang or Kano in the U.S. on behalf of the issuer, each
investor wired his or her $500,000 investment to an escrow account located in the
United States.

After an investor filed his or her initial application with USCIS,
investor funds were wired from the escrow account into three separate operating
accounts in the names of Suncor Fontana, Suncor Hesperia, and Suncor Lynwood.
Investor funds were pooled in the escrow account and in the operating accounts.
29. In addition to their $500,000 investments with the Suncor entities,
investors separately paid a fee of $45,000 to the Finder, bringing the total cost of each
investment to $545,000.
30. All three operating accounts and the escrow accounts were and are under
the control of Yang and Kano.  Kano prepared and recommended transfers from the
accounts and consulted with Yang regarding the transfers.  Yang retained signatory
authority on the accounts and signed off on all transfers.
31. The offering documents represent to investors that the offerings are
“structured to maximize” the prospects that their investments will qualify for the EB-
5 program and generate, as required under that program, full-time employment for at
least ten U.S. workers.  One of the requirements of the EB-5 program is that the full
amount of the investor money be made available to the business most closely
responsible for creating the employment upon which the petition is based.
32. According to the offering materials for each Suncor entity, once the
facility is operational, investors are owed a 1% or 2% annual return to be paid out of
the cash generated by the facility.
33.   Yang and Kano had ultimate authority over statements in the offering
materials issued by the Suncor entities to investors.  Yang and Kano were the only
officers of the Suncor entities, holding the positions President and Senior Vice
President, respectively.  Yang and Kano controlled the entities, and were responsible
for reviewing, approving and issuing the statements in the offering materials provided

9

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
to investors.  Yang and Kano also executed the operating agreements, subscription
agreements, and escrow agreements on behalf of the issuing entities.  The following
chart shows which offering documents were signed by Yang and Kano and in what
capacity:

THE DEFENDANTS MADE MATERIAL MISSTATEMENTS AND
OMISSIONS REGARDING THE USE OF INVESTOR FUNDS

The Defendants Represented That Investor Funds Would Only Be Used for a
Specific Suncor Project
34. The Suncor Fontana offering memorandum states that Suncor Fontana
is “only involved in the operation of a 72 bed sub-acute nursing facility ... located in
Fontana, California” and that investor funds will be used “solely for operating capital
for the Company.”  The subscription agreements, signed by both the investors and
Kano, state that Suncor Fontana is “limited to only investing” in the facility being
developed in Fontana, California.

Operating
Agreement
Subscription
Agreement
Escrow Agreement
Suncor
Fontana
Kano, Initial Manager
Yang, Initial
Member/Owner
Kano, Manager Kano, Managing
Member
Yang, President
Suncor
Hesperia
Kano, Initial Manager
Yang, Initial
Member/Owner
Kano, Manager Kano, Managing
Member
Yang, President
Suncor
Lynwood
Yang, Initial Manger     Yang,     Managing
Member
Yang, Managing
Member

10

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
35. The Suncor Hesperia offering memorandum states that “the capital
raised will further the development, construction and operation of a 99 bed sub-acute
nursing facility ... located in Hesperia, California” and that “[t]he use of these funds
will be for the construction and operations of the Facility.”  The subscription
agreements, signed by both the investors and Kano, state that Suncor Hesperia is
“limited to only investing” in the Suncor Hesperia facility project.
36. The Suncor Lynwood offering memorandum states that “the capital
raised will further the development ... of a 120 bed sub-acute nursing facility ...
located in Lynwood, California” and “[t]he use of these funds will be for the
renovation and operations of the Facility.”  The subscription agreements, signed by
both the investors and Yang, state that Suncor Lynwood is “limited to only investing”
in the Suncor Lynwood facility project.
The Defendants Misappropriated and Misused Investor Funds
37. Defendants’ statements that investor funds would “only” be used for
specific Suncor projects were false.  Rather than use the funds exclusively for the
projects, they diverted the investor money to a variety of other purposes that were
undisclosed and contrary to their representations.  Kano typically arranged the
transfers, presented them to Yang for approval, and executed the transfers.  As a
result of their conduct, a significant amount of the investor funds were never used for
the operations or development of the specified projects.
Use of Investor Funds to Pay Substantial Undisclosed Sales Commissions
38. Yang and Kano agreed to pay an 18% commission to the Finder for all
investor funds raised for the Suncor projects.  Yang and Kano entered into
agreements to pay these commissions before approving the offering documents for
each offering.  There is no disclosure in the Suncor Fontana, Suncor Hesperia, or
Suncor Lynwood offering documents regarding using investor funds to pay any fees
or commissions to any third party for acting as a broker or finder.  Yang and Kano

11

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
fraudulently paid these commissions from investor proceeds as the money was being
raised and while the solicitations were ongoing.
39. These undisclosed commissions were in addition to $45,000 fees that
each Suncor investor knowingly and separately paid to the Finder on top of each
$500,000 investment.
40.   Yang and Kano have transferred an estimated $3.5 million to the
Finder, all from investor proceeds.  As a result, and contrary to the representations in
the offering materials, these funds were never used for the operation and/or
development of the Suncor projects.  Yang and Kano have never disclosed the
commissions to the Suncor investors and did not instruct the Finder to disclose the
commissions.
Misappropriation of Suncor Fontana Funds to Pay Off Yang’s Personal Loans
41. Shortly after Suncor Fontana received investor funds, Yang wrote a
series of checks out of the Suncor Fontana account to various individuals totaling
approximately $1.14 million to pay off purported loans from friends and family.  This
use of funds is contrary to the representation in the Fontana offering materials that the
funds would be “used solely for operating capital” for the Fontana facility.
Misappropriation of Suncor Lynwood Funds to Purchase Property for Yang
42. Yang and Kano diverted $500,000 of Suncor Lynwood investor funds to
purchase real property near Redlands, California.  The property was purchased for,
and is held in the name of, Relief Defendant Suncor Care, Inc., an entity under the
control of Yang.  Again, the Defendants’ use of investor funds to purchase property
for Yang’s benefit was directly contrary to the Defendants’ representations to
investors.
Misappropriation of Suncor Hesperia and Lynwood Funds for Yang’s
Medical Practice
43. Yang and Kano transferred approximately $960,000 of investor funds to
Yang’s medical practice.  Between June 2013 and May 2014, Yang made transfers

12

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
totaling $710,000 from Suncor Hesperia to his company, Relief Defendant Yanrob’s
Medical, Inc.  The transferred money was used to pay Yang’s personal and medical
practice expenses.  For example, a $500,000 transfer from Suncor Hesperia investor
funds in August 2013 was used to secure a loan to purchase a building that Yang uses
for his medical practice.  And, in another instance, a $100,000 transfer from Suncor
Hesperia to Yanrob in February 2014 was used to pay Yang’s personal taxes and
other expenses.  Further, in October 2014, another $250,000 was transferred from
Suncor Lynwood investor funds for the benefit of Yanrob.  These transfers, again,
directly contravened the Defendants’ representations in the offering documents.
 
Misappropriation of Suncor Hesperia Funds to Purchase Land for Suncor
Lynwood
 
44. Yang and Kano diverted Suncor Hesperia investor funds to purchase
land in Lynwood, California for the Suncor Lynwood facility.  Between February and
June 2013, approximately $3.485 million of Hesperia investor funds were used for
this purpose.  This use of funds is contrary to representations in the Suncor Hesperia
offering documents.
Misappropriation of Suncor Lynwood Funds for Suncor Fontana
45. The Suncor Fontana project is substantially behind schedule and over-
budget.  There are no remaining investor funds in the Suncor Fontana escrow.  In
clear contravention to representations made to Suncor Lynwood investors, Yang and
Kano misappropriated at least $478,000 of Suncor Lynwood investor funds for the
Suncor Fontana project.
The Defendants Made Misrepresentations and Omissions Regarding the Use of
Investor Funds with Scienter
46. In light of Yang’s control over and management of the Defendant
Suncor entities, responsibility for the Defendant Suncor entities’ offering documents,
knowledge of the Finder’s commissions, and involvement in transfers contrary to
representations in the offering documents, Yang knew, was reckless in not knowing,

13

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
and/or was negligent in not knowing that statements and omissions he made in the
Suncor Fontana, Suncor Hesperia, and Suncor Lynwood offering materials regarding
the use of investor funds were false and misleading.
47. In light of Kano’s control over and management of the Defendant
Suncor entities, responsibility for the Defendant Suncor entities’ offering documents,
knowledge of the Finder’s commissions, and involvement in transfers contrary to
representations in the offering documents, Kano knew, was reckless in not knowing,
and/or was negligent in not knowing that statements and omissions she made in the
Suncor Fontana, Suncor Hesperia, and Suncor Lynwood offering materials regarding
the use of investor funds were false and misleading.
The Misrepresentations and Omissions Regarding the Use of Investor Funds
Were Material
48. The fact that Suncor investor funds were diverted from the operation
and/or development of the projects they invested in to Yang, the Finder, and other
projects would be significant to the investment decision of a reasonable investor
because the funds were not available to enable the project to succeed and provide
returns to investors.
49. Additionally, the misappropriation of investor funds for uses other than
the operation and/or development of the projects they were invested in would be
material to the Suncor investors because this would disqualify their investments for
the purposes of the EB-5 program.  That program requires that the full amount of the
investment be made available to the business most closely responsible for creating the
employment upon which the EB-5 petition is based.
THE DEFENDANTS MADE MATERIAL MISSTATEMENTS AND
OMISSIONS REGARDING ELIGIBILITY FOR THE EB-5 PROGRAM
50. The Defendants touted EB-5 eligibility as a key attribute of the Suncor
offerings and claimed as much in the offering documents.  Specifically, the offering
memoranda for the Suncor Fontana, Suncor Hesperia and Suncor Lynwood offerings

14

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
each state:  “This Offering has been structured to maximize the eligibility of Investors
in the Company seeking to qualify their investment under the EB-5 Program.”
51. EB-5 eligibility criteria require each investor to demonstrate that he or
she made a qualified investment of at least $500,000 in a specified project and that
the full amount of the investment has been made available to the business most
closely responsible for creating the employment upon which the petition is based.
52. Even after the Defendants began secretly diverting the EB-5 investor
funds for commissions paid to the Finder, unrelated projects, and Yang’s benefit, they
continued to solicit investments based on promises that the Suncor offerings are
“structured to maximize” the prospects that investors would qualify for the EB-5
program.
53. In light of Yang’s control over and management of the Defendant
Suncor entities, responsibility for the Defendant Suncor entities’ offering documents,
knowledge of the Finder’s commissions, and involvement in transfers contrary to
representations in the offering documents, Yang knew, was reckless in not knowing,
and/or was negligent in not knowing that statements and omissions he made in the
Suncor Fontana, Suncor Hesperia, and Suncor Lynwood offering materials regarding
the EB-5 eligibility of the investments were false and misleading.
54. Based on Kano’s control over and management of the Defendant Suncor
entities, responsibility for the Defendant Suncor entities offering documents,
knowledge of the Finder’s commissions, and involvement in transfers contrary to
representations in the offering documents, Kano knew, was reckless in not knowing,
and/or was negligent in not knowing that statements and omissions she made in the
Suncor Fontana, Suncor Hesperia, and Suncor Lynwood offering materials regarding
the EB-5 eligibility of the investments were false and misleading.
55. These misstatements and omissions were material to Suncor investors
who invested in the Suncor offerings based on the belief that they were designed to
qualify the investors for the EB-5 program.

15

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
THE DEFENDANTS ENGAGED IN A SCHEME TO DEFRAUD
SUNCOR INVESTORS
56. Yang and Kano operated the Suncor entities as a scheme to defraud
investors and as a fraudulent enterprise in connection with the sale of securities.  As
detailed above, Yang and Kano made material misrepresentations and omissions in
the offering materials.  In addition, each committed numerous acts in furtherance of
this fraudulent scheme, including using their control over the Suncor entities to direct
payments to themselves or entities under their control.
57. Additionally, Yang and Kano lulled investors by providing incomplete
and misleading information.  Yang and Kano are in regular communication with
concerned investors who are inquiring about the status of their investments, the status
of the specific project he or she invested in, and their EB-5 applications.  At various
times, Yang and Kano have provided false and misleading updates regarding the
status of the projects, assured investors that the projects are progressing smoothly,
and claimed that they are in a position to provide refunds to investors.  Yang and
Kano have not informed any investors about the undisclosed commission payments
or other misuses of investor funds.
58. The Defendants’ scheme also involves providing false and misleading
documents to USCIS.  The offering documents for the Suncor offerings were not only
provided to investors, but were provided to USCIS to enable it to assess whether the
investments qualified for the EB-5 program.  As noted above, the offering documents
contained false statements and omissions regarding facts critical to EB-5 eligibility.
59. The Defendants were aware that these false and misleading offering
documents were provided to USCIS to substantiate the amount and use of the
applicants’ investments as part of the EB-5 program approval process.

16

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
YANG AND KANO ARE CONTROL PERSONS OF THE SUNCOR
ENTITY DEFENDANTS
60. As detailed above, Yang is the owner/president of each of the Suncor
entity defendants and Kano is the manager/senior vice president.  Yang and Kano are
the only managers of the entities and the only people involved in their day-to-day
operations.
61. Yang and Kano exercised control over the general operations of Suncor
Fontana, Suncor Hesperia, and Suncor Lynwood, and the specific violative activity
that is the subject of this Complaint.
CLAIMS FOR RELIEF
FIRST CLAIM
Fraud in the Offer or Sale of Securities
Violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]
(All Defendants)
62. The  Commission  realleges  and  incorporates  by  reference  paragraphs  1
through 61, as though fully set forth herein.
63. Defendants have, by engaging in the conduct set forth above, directly or
indirectly, in the offer or sale of securities, by use of means or instrumentalities of
interstate commerce or of the mails, with the requisite state of mind:  (a) employed
devices, schemes or artifices to defraud; (b) obtained money or property by means of
untrue statements of material fact or omissions to state material facts necessary in
order to make the statements made, in light of the circumstances under which they
were made, not misleading; and/or (c) engaged in transactions, practices, or courses
of business which operated or would operate as a fraud or deceit upon purchasers of
securities.
64. By reason of the foregoing, Defendants violated, and, unless restrained
and enjoined, will continue to violate Section 17(a) of the Securities Act.

17

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
SECOND CLAIM
Fraud in the Purchase or Sale of Securities
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder [15
U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5]
(All Defendants)
65. The Commission realleges and incorporates by reference paragraphs 1
through 61, as though fully set forth herein.
66. Defendants have, by engaging in the conduct set forth above, directly or
indirectly, by use of means or instrumentalities of interstate commerce, or of the
mails, or of a facility of a national security exchange, with scienter: (a) employed
devices, schemes or artifices to defraud; (b) made untrue statements of material fact
or omitted to state material facts necessary in order to make the statements made, in
light of the circumstances under which they were made, not misleading; and/or (c)
engaged in acts, practices or courses of business which operated or would operate as
a fraud or deceit upon other persons, in connection with the purchase or sale of
securities.
67. By reason of the foregoing, Defendants violated, and, unless restrained
and enjoined, will continue to violate Section 10(b) of the Exchange Act and Rule
10b-5(b) thereunder.
THIRD CLAIM
Control Person Liability Under Section 20(a) of the Exchange Act [15 U.S.C. §
78t(a)] for Suncor Fontana, Suncor Hesperia, and Suncor Lynwood’s Violations
of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder [15 U.S.C. §
78j(b) and 17 C.F.R. § 240.10b-5]
(Against Yang and Kano, Alternatively)
68. The Commission realleges and incorporates by reference paragraphs 1
through 61, as though fully set forth herein.

18

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
69. Suncor Fontana, Suncor Hesperia, and Suncor Lynwood have, by
engaging in the conduct set forth above, directly or indirectly, by use of means or
instrumentalities of interstate commerce, or of the mails, or of a facility of a national
security exchange, with scienter:  (a) employed devices, schemes or artifices to
defraud; (b) made untrue statements of material fact or omitted to state material facts
necessary in order to make the statements made, in light of the circumstances under
which they were made, not misleading; and/or (c) engaged in acts, practices or
courses of business which operated or would operate as a fraud or deceit upon other
persons, in connection with the purchase or sale of securities.
70. Yang and Kano exercised control over the general operations of Suncor
Fontana, Suncor Hesperia, and Suncor Lynwood and the specific activity upon which
Suncor Fontana, Suncor Hesperia, and Suncor Lynwood’s violations are based.
71. By reason of the foregoing, Yang and Kano are each liable as control
persons under Section 20(a) of the Exchange Act for Suncor Fontana, Suncor
Hesperia, and Suncor Lynwood’s violations of Section 10(b) of the Exchange Act
and Rule 10b-5(b) thereunder.
FOURTH CLAIM
Fraud:  Aiding and Abetting Violations of Section 10(b) of the Exchange Act and
Rule 10b-5 [15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5(b)]
(Yang and Kano, Alternatively)
72. Paragraphs 1 through 61 are hereby realleged and incorporated by
reference.
73. Suncor Fontana, Suncor Hesperia, and Suncor Lynwood have, by
engaging in the conduct set forth above, directly or indirectly, by use of means or
instrumentalities of interstate commerce, or of the mails, or of a facility of a national
security exchange, with scienter:  (a) employed devices, schemes or artifices to
defraud; (b) made untrue statements of material fact or omitted to state material facts
necessary in order to make the statements made, in light of the circumstances under

19

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
which they were made, not misleading; and/or (c) engaged in acts, practices or
courses of business which operated or would operate as a fraud or deceit upon other
persons, in connection with the purchase or sale of securities.
74. By engaging in the conduct described above, Yang and Kano each aided
and abetted the violations of Suncor Fontana, Suncor Hesperia, and Suncor Lynwood,
in that they knowingly or recklessly provided substantial assistance to Suncor
Fontana, Suncor Hesperia, and Suncor Lynwood in committing these violations.
75. By reason of the foregoing, Yang and Kano each aided and abetted and,
unless restrained and enjoined, will continue to aid and abet, Suncor Fontana, Suncor
Hesperia, and Suncor Lynwood’s violations of Section 10(b) of the Exchange Act
and Rule 10b-5(b) thereunder.
FIFTH CLAIM
Fraud:  Aiding and Abetting Violations of Section 17(a) of the Securities Act
[15 U.S.C. § 77q(a)]
(Yang and Kano, Alternatively)
76. Paragraphs 1 through 61 are hereby realleged and incorporated by
reference.
77. Suncor Fontana, Suncor Hesperia, and Suncor Lynwood have, by
engaging in the conduct set forth above, directly or indirectly, in the offer or sale of
securities, by use of means or instrumentalities of interstate commerce or of the
mails, with the requisite state of mind:  (a) employed devices, schemes or artifices to
defraud; (b) obtained money or property by means of untrue statements of material
fact or omissions to state material facts necessary in order to make the statements
made, in light of the circumstances under which they were made, not misleading;
and/or (c) engaged in transactions, practices, or courses of business which operated or
would operate as a fraud or deceit upon purchasers of securities.
78. By engaging in the conduct described above, Yang and Kano each aided
and abetted the violations of Suncor Fontana, Suncor Hesperia, and Suncor Lynwood,

20

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
in that they knowingly or recklessly provided substantial assistance to Suncor
Fontana, Suncor Hesperia, and Suncor Lynwood in committing these violations.
79. By reason of the foregoing, Yang and Kano each aided and abetted and,
unless restrained and enjoined, will continue to aid and abet, Suncor Fontana, Suncor
Hesperia, and Suncor Lynwood’s violations of Section 17(a) of the Securities Act.
SIXTH CLAIM
Equitable Disgorgement
(Against Relief Defendants)
80. Paragraphs 1 through 61 are hereby re-alleged and incorporated by
reference.
81. Relief Defendants Yanrob’s Medical, Inc., HealthPro Capital Partners,
LLC, and Suncor Care, Inc., obtained money, property, and assets as a result of the
violations of the securities laws by Defendants Robert Yang, Claudia Kano, Suncor
Fontana, Suncor Hesperia, and Suncor Lynwood, to which the Relief Defendants
have no legitimate claim.
82. Yanrob’s Medical, Inc., HealthPro Capital Partners, LLC, and Suncor
Care, Inc., should be required to disgorge all ill-gotten gains which inured to their
benefit under the equitable doctrines of disgorgement, unjust enrichment and
constructive trust.
PRAYER FOR RELIEF
I.
Find that each of the Defendants committed the violations alleged in this
Complaint;
II.
Enter  preliminary and permanent injunctions, in a form consistent with Rule
65(d) of the Federal Rules of Civil Procedure, temporarily and permanently
restraining and enjoining each of the Defendants from violating, directly or indirectly,
the laws and rules alleged against them in this Complaint;

21

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
III.
Order that each of the Defendants and Relief Defendants disgorge any and all
ill-gotten gains, together with pre- and post-judgment interest, derived from the
improper conduct set forth in this Complaint;
IV.
Order that each of the Defendants pay civil money penalties pursuant to
Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d) of the
Exchange Act [15 U.S.C. § 78u(d)] in an amount to be determined by the Court, plus
post-judgment interest; and
V.
Order such other relief as this Court may deem just or appropriate.

Respectfully this 19
th
day of November, 2015.

     Jury Trial Demanded
Respectfully Submitted,

s/ David J. VanHavermaat
David J. VanHavermaat, Local Counsel
Securities and Exchange Commission
444 South Flower Street, Suite 900
Los Angeles, CA 90071

                                                  Zachary          T.          Carlyle
                                                  (pro          hac          vice          application          to          be          filed)
Attorneys for Plaintiff
Securities and Exchange Commission

Complaints and Other Initiating Documents
5:15-cv-02387 Securities and Exchange Commission v. Yang et al
UNITED STATES DISTRICT COURT for the CENTRAL DISTRICT OF CALIFORNIA
Notice of Electronic Filing
The following transaction was entered by Van Havermaat, David on 11/19/2015 at 12:55 PM PST and
filed on 11/19/2015
Case Name:Securities and Exchange Commission v. Yang et al
Case Number:5:15-cv-02387
Filer:Securities and Exchange Commission
Document Number:1
Docket Text:
COMPLAINT No Fee Required - US Government, filed by Plaintiff Securities and
Exchange Commission. (Attorney David J Van Havermaat added to party Securities and
Exchange Commission(pty:pla))(Van Havermaat, David)
5:15-cv-02387 Notice has been electronically mailed to:
David J Van Havermaat     [email protected], [email protected], [email protected],
[email protected]
5:15-cv-02387 Notice has been delivered by First Class U. S. Mail or by other means BY THE
FILER to :
The following document(s) are associated with this transaction:
Document description:Main Document
Original filename:J:\Common\Suncor\Complaint.pdf
Electronic document Stamp:
[STAMP cacdStamp_ID=1020290914 [Date=11/19/2015] [FileNumber=20537867-
0] [204cc2452aea28a12a375bd26b6943ec5e362060e0506a13aa7c34193725b14053
53ad36bd8942b747fef341a558b08722dc60e479766efec87edd4b32e7a9eb]]
Page 1 of 1CM/ECF - California Central District
11/19/2015https://ecf.cacd.uscourts.gov/cgi-bin/Dispatch.pl?763897882340881

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

ZACHARY T. CARLYLE 
[email protected] 
SECURITIES AND EXCHANGE COMMISSION 
Byron G. Rogers Federal Building 
1961 Stout Street, Suite 1700 
Denver, Colorado 80294-1961 
Telephone: (303) 844-1000 
Facsimile: (303) 297-3529 
 
LOCAL COUNSEL: 
David J. VanHavermaat, Cal. Bar No. 175761 
[email protected] 
SECURITIES AND EXCHANGE COMMISSION 
444 S. Flower Street, Suite 900 
Los Angeles, California 90071 
Telephone: (323) 965-3998 
Facsimile: (213) 443-1904 
 
Attorneys for Plaintiff 
Securities and Exchange Commission 

UNITED STATES DISTRICT COURT 

CENTRAL DISTRICT OF CALIFORNIA 

EASTERN DIVISION 

SECURITIES AND EXCHANGE
COMMISSION, 

Plaintiff, 

vs. 

ROBERT YANG, 
CLAUDIA KANO,  
SUNCOR FONTANA, LLC, 
SUNCOR HESPERIA, LLC, AND 
SUNCOR CARE LYNWOOD, LLC 

Defendants, 

AND 
 
YANROB’S MEDICAL, INC., 
HEALTHPRO CAPITAL PARTNERS, LLC, 
AND SUNCOR CARE, INC. 

Relief Defendants. 

Case No.

COMPLAINT 
 
DEMAND FOR JURY TRIAL 
 
 

 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 1 of 22   Page ID #:1



 

 1  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

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

complaint alleges as follows: 

JURISDICTION AND VENUE   

1. The Commission brings this action pursuant to the authority conferred 

upon it by Sections 20(b) and (d) of the Securities Act [15 U.S.C. §§ 77t(b) and 

77t(d)] and Sections 21(d) and (e) of the Exchange Act [15 U.S.C. §§ 78u(d) and 

78u(e)].  Defendants, directly or indirectly, made use of the means or instruments of 

transportation or communication in interstate commerce, the means and 

instrumentalities of interstate commerce, or of the mails, in connection with the acts, 

practices, and courses of business set forth in this Complaint. 

2. This Court has jurisdiction over this action pursuant to Section 22(a) of 

the Securities Act [15 U.S.C. § 77v(a)], Section 27 of the Exchange Act [15 U.S.C. § 

78aa], and 28 U.S.C. § 1331.  Venue lies in this Court 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].  Defendants reside in this judicial district, all of the Suncor entity 

Defendants and Relief Defendants are California entities, and certain of the acts, 

practices, transactions, and courses of business alleged in this Complaint occurred 

within the Central District of California.  

SUMMARY 

3. This case involves fraudulent misrepresentations and a fraudulent 

scheme in connection with raising money from Chinese investors seeking to obtain 

United States visas through the EB-5 program.  The EB-5 program is a federal 

program that enables foreigners to obtain a U.S. visa by making investments in the 

U.S.  Specifically, the EB-5 program requires foreigners seeking a visa under the 

program to make an investment of at least $1 million (or at least $500,000 in an area 

designated as rural or high unemployment), and create or preserve at least ten jobs for 

U.S. workers.  

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 2 of 22   Page ID #:2



 

 2  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4. From September 2012 through at least early 2014, Robert Yang and 

Claudia Kano, through their affiliated entities (Suncor Fontana, LLC, Suncor 

Hesperia, LLC, and Suncor Care Lynwood, LLC, collectively the “Suncor entities”), 

raised $20 million from 40 investors located in China who sought to participate in the 

EB-5 program.  Yang and Kano raised the funds through three fraudulent securities 

offerings, one in the name of each of the Suncor entities, ostensibly for the 

development of three medical facilities located in Fontana, Hesperia, and Lynwood, 

California.   

5. In each of the offerings, Yang, Kano, Suncor Fontana, LLC, Suncor 

Hesperia, LLC, and Suncor Care Lynwood, LLC (collectively the “Defendants”) 

made repeated statements in the offering documents indicating that investor funds 

would “only” be used to develop the specific medical facility project in which they 

invested.   

6. These statements were false.  Yang and Kano engaged in a scheme to 

misappropriate, divert, and misuse at least $10 million of investor funds.  Yang and 

Kano repeatedly siphoned off investor funds for Yang’s personal benefit, to pay an 

undisclosed 18% fee to a finder, and to pay for expenses of other projects in which 

the investors have no interest.  There is an ongoing risk that Defendants will further 

misappropriate or dissipate investor funds or dissipate assets purchased using investor 

funds.   

7. Yang and Kano also misrepresented to investors that their securities 

offerings were “structured to maximize” the prospects that their investments would 

qualify for the EB-5 program.  In fact, their misappropriation and misuse of investor 

funds rendered the investments ineligible for the EB-5 program, which requires that 

applicants demonstrate that all of their funds are made available to the business most 

closely responsible for creating the jobs underlying their EB-5 applications.  The 

Defendants’ false and misleading offering documents, which state that all investor 

funds will be used for the specific projects, were submitted to the United States 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 3 of 22   Page ID #:3



 

 3  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Citizenship and Immigration Service (“USCIS”), the agency responsible for 

administering the EB-5 program, in support of the Suncor investor EB-5 applications. 

8. The Suncor projects are years behind schedule.  For the Suncor Fontana 

and Hesperia projects, which were marketed beginning in September 2012, the 

offering documents represented that construction was “well under way” with 

projected completion dates of September 2012 and September 2013, respectively.  

The Suncor Lynwood project, which was marketed beginning in July 2013, projected 

a completion date of February 2014.  As of today, none of the projects is operational 

and they may never be completed. 

9. As a result of the conduct described in the Complaint, Defendants have 

violated Section 17(a) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. § 

77q(a)] and Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act” ) 

[15 U.S.C. § 78j(b)] and Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder, and unless 

restrained and enjoined will engage in future violations of these provisions.  In the 

alternative, Yang and Kano aided and abetted the Securities Act Section 17(a) and 

Exchange Act Section 10(b) and Rule 10b-5 violations of the Defendant Suncor 

entities, or are liable as control persons under Section 20(a) of the Exchange Act [15 

U.S.C. § 78t(a)], for the Exchange Act Section 10(b) and Rule 10b-5 violations of the 

Defendant Suncor entities and, unless restrained and enjoined, will engage in future 

violations of the federal securities laws   

10. The Commission seeks an order restraining and enjoining Defendants 

from violating the federal securities laws and regulations, requiring Defendants to 

perform an accounting, disgorge ill-gotten gains plus prejudgment interest, pay civil 

penalties, and granting such other relief as is necessary and appropriate. 

DEFENDANTS 

11. Robert Yang, age 45 of Redlands, California, is the Owner/President of 

the Defendant Suncor entities and relief defendants Suncor Fontana, LLC, Suncor 

Hesperia, LLC, Suncor Care Lynwood, LLC, Yanrob’s Medical, Inc., HealthPro 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 4 of 22   Page ID #:4



 

 4  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Capital Partners, LLC, and Suncor Care, Inc.  Yang is licensed to practice medicine 

in California and owns his own medical practice specializing in geriatric care. 

12. Claudia Kano, age 45 of Pomona, California acts as the Senior Vice 

President and/or Manager of the Defendant Suncor entities and relief defendants 

Suncor Fontana, LLC, Suncor Hesperia, LLC, Suncor Care Lynwood, LLC and is 

responsible for their day-to-day operations.  Kano also serves as the administrative 

manager of Yang’s medical practice.   

13. Suncor Fontana, LLC (“Suncor Fontana”) is a California limited 

liability company formed in 2012, with its principal place of business in San 

Bernardino, California, to develop a sub-acute nursing care facility in Fontana, 

California.  Suncor Fontana is the issuer of securities in the form of limited liability 

company membership interests purchased by investors seeking to qualify for the EB-

5 program.  At all relevant times, Yang and Kano have exercised control over the 

management, general operations, and policies of Suncor Fontana, as well as the 

activities upon which Suncor Fontana’s violations of the federal securities laws are 

based.   

14. Suncor Hesperia, LLC (“Suncor Hesperia”) is a California limited 

liability company formed in 2012 with its principal place of business in San 

Bernardino, California, to develop a sub-acute nursing care facility in Hesperia, 

California.  Suncor Hesperia is the issuer of securities in the form of limited liability 

company membership interests purchased by investors seeking to qualify for the EB-

5 program.  At all relevant times, Yang and Kano have exercised control over the 

management, general operations, and policies of Suncor Hesperia, as well as the 

activities upon which Suncor Hesperia’s violations of the federal securities laws are 

based.   

15. Suncor Care Lynwood, LLC (aka Suncor Lynwood, LLC) (“Suncor 

Lynwood”) is a California limited liability company formed in 2013 with its principal 

place of business in San Bernardino, California, to develop a sub-acute nursing care 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 5 of 22   Page ID #:5



 

 5  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

facility in Lynwood, California.  Suncor Lynwood is the issuer of securities in the 

form of limited liability company membership interests purchased by investors 

seeking to qualify for the EB-5 program.  At all relevant times, Yang and Kano have 

exercised control over the management, general operations, and policies of Suncor 

Lynwood, as well as the activities upon which Suncor Lynwood’s violations of the 

federal securities laws are based.  

RELIEF DEFENDANTS 

16. Yanrob’s Medical, Inc. is a California corporation formed in 2002.  

Yang runs his personal medical practice through Yanrob.  Suncor Hesperia and 

Suncor Lynwood investor funds were transferred to bank accounts in the name of 

Yanrob and used for a variety of purposes, including to pay Yang’s personal expenses 

and to make payments related to the purchase and renovation of an office building 

used for Yang’s medical practice.  At all relevant times, Yang and Kano have 

exercised control over the management, general operations, and policies of Yanrob. 

17. HealthPro Capital Partners, LLC is a California limited liability 

company formed in 2009 with its principal place of business in San Bernardino, 

California.  HealthPro is the obligor on a construction loan taken out by Yang in 

February 2012 to develop the Suncor Fontana project.  Bank accounts in the name of 

HealthPro received at least $128,000 of Suncor Lynwood investor funds that were 

used to make payments on the Suncor Fontana construction loan.  At all relevant 

times, Yang and Kano have exercised control over the management, general 

operations, and policies of HealthPro. 

18. Suncor Care, Inc. is a California corporation formed in 2008 with its 

principal place of business in San Bernardino, California.  Suncor Lynwood investor 

funds were used to purchase real property located near Redlands, California that is 

held in Suncor Care’s name.  That property is not related to the Suncor Fontana, 

Suncor Hesperia, or Suncor Lynwood projects.  At all relevant times, Yang and Kano 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 6 of 22   Page ID #:6



 

 6  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

have exercised control over the management, general operations, and policies of 

Suncor Care. 

BACKGROUND OF SUNCOR 

19. In 2008, using money from his medical practice, Yang purchased land in 

Fontana, California for the purpose of building a sub-acute nursing facility, which 

would specialize in providing care for chronically ill patients.  Yang aimed to profit 

from owning and operating the facility and planned to shift his focus from patient 

care to nursing facility management.    

20.   After securing an initial construction loan, Yang and Kano purportedly 

sought additional capital to operate the facility.  In or around May 2012, Yang and 

Kano contacted a firm that offered to help them raise money for the Fontana project 

from Chinese investors interested in immigrating to the United States through the EB-

5 program (the “Finder”).  The Finder told Yang and Kano that it could potentially 

raise money from EB-5 investors for the development of other sub-acute care nursing 

facilities in addition to the one planned for Fontana. 

21. On September 12, 2012, on behalf of Suncor Fontana, Yang (as 

President) and Kano (as Senior Vice President), signed a “Letter of Intent for EB-5 

Services” with the Finder.  Under this letter of intent, the Finder agreed to raise up to 

$3.5 million from 7 investors.  In exchange for the Finder’s services, Suncor Fontana 

agreed to pay “a fee of $90,000 for each Investor (18% of each $500,000).” 

22. On September 17, 2012, Yang and Kano again signed a letter of intent 

for the Finder to raise another $10 million for the development of a sub-acute care 

nursing facility to be located in Hesperia, California.  Yang and Kano again agreed 

to pay the Finder 18% of each $500,000 investment.   

23. On January 28, 2013, Yang and Kano signed a letter of intent, as 

amended on July 5, 2013, for the Finder to raise $6 million for development of a sub-

acute care nursing facility located in Lynwood, California.  As before, Yang and 

Kano agreed to pay the Finder 18% of each $500,000 investment.  

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 7 of 22   Page ID #:7



 

 7  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

THE OFFERINGS 

24. With the assistance of the Finder, from approximately November 2012 

to April 2014, Yang and Kano raised approximately $20 million from EB-5 program 

applicants located in China.  The Defendants raised funds in three separate offerings 

by entities created specifically for each of the Suncor projects as follows:  

 From November to December 2012, Suncor Fontana raised $4.5 million 

from 9 investors;   

 From December 2012 to March 2014, Suncor Hesperia raised $9.5 

million from 19 investors; and 

 From September 2013 to April 2014, Suncor Lynwood raised $6 million 

from 12 investors.  

25. The investment structure and the potential benefits to investors were 

presented in similar fashion for each project, and each offering had a similar set of 

offering materials that contained an offering memorandum accompanied by several 

exhibits, including an operating agreement for the issuing entity, a subscription 

agreement, and an escrow agreement.  The offering memoranda are dated September 

15, 2012 (Suncor Fontana), September 19, 2012 (Suncor Hesperia), and July 20, 2013 

(Suncor Lynwood) (collectively, the “offering materials”).  The offering materials 

were provided to investors in the Suncor entities.   

26. Pursuant to the offerings, investors each purchased limited liability 

company membership interests in the issuers for $500,000 – the minimum amount 

necessary to qualify for the EB-5 program.   

27. These membership interests were described as “securities” in the 

offering documents.  The offering documents disclosed that day-to-day management 

would be conducted by the designated manager, which, in the case of Suncor Fontana 

and Suncor Hesperia, was Kano, and in the case of Suncor Lynwood, was Yang.  

Under the operating agreements, members were prohibited from removing Yang or 

Kano as manager for at least five years.   

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 8 of 22   Page ID #:8



 

 8  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

28. After executing a subscription agreement and an escrow agreement, 

which were counter-signed by Yang or Kano in the U.S. on behalf of the issuer, each 

investor wired his or her $500,000 investment to an escrow account located in the 

United States.  After an investor filed his or her initial application with USCIS, 

investor funds were wired from the escrow account into three separate operating 

accounts in the names of Suncor Fontana, Suncor Hesperia, and Suncor Lynwood.  

Investor funds were pooled in the escrow account and in the operating accounts. 

29. In addition to their $500,000 investments with the Suncor entities, 

investors separately paid a fee of $45,000 to the Finder, bringing the total cost of each 

investment to $545,000.   

30. All three operating accounts and the escrow accounts were and are under 

the control of Yang and Kano.  Kano prepared and recommended transfers from the 

accounts and consulted with Yang regarding the transfers.  Yang retained signatory 

authority on the accounts and signed off on all transfers.     

31. The offering documents represent to investors that the offerings are 

“structured to maximize” the prospects that their investments will qualify for the EB-

5 program and generate, as required under that program, full-time employment for at 

least ten U.S. workers.  One of the requirements of the EB-5 program is that the full 

amount of the investor money be made available to the business most closely 

responsible for creating the employment upon which the petition is based.   

32. According to the offering materials for each Suncor entity, once the 

facility is operational, investors are owed a 1% or 2% annual return to be paid out of 

the cash generated by the facility. 

33.   Yang and Kano had ultimate authority over statements in the offering 

materials issued by the Suncor entities to investors.  Yang and Kano were the only 

officers of the Suncor entities, holding the positions President and Senior Vice 

President, respectively.  Yang and Kano controlled the entities, and were responsible 

for reviewing, approving and issuing the statements in the offering materials provided 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 9 of 22   Page ID #:9



 

 9  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

to investors.  Yang and Kano also executed the operating agreements, subscription 

agreements, and escrow agreements on behalf of the issuing entities.  The following 

chart shows which offering documents were signed by Yang and Kano and in what 

capacity: 

 

THE DEFENDANTS MADE MATERIAL MISSTATEMENTS AND 

OMISSIONS REGARDING THE USE OF INVESTOR FUNDS 

 

The Defendants Represented That Investor Funds Would Only Be Used for a 

Specific Suncor Project 

34. The Suncor Fontana offering memorandum states that Suncor Fontana 

is “only involved in the operation of a 72 bed sub-acute nursing facility … located in 

Fontana, California” and that investor funds will be used “solely for operating capital 

for the Company.”  The subscription agreements, signed by both the investors and 

Kano, state that Suncor Fontana is “limited to only investing” in the facility being 

developed in Fontana, California.   

 Operating 

Agreement 

Subscription 

Agreement 

Escrow Agreement 

Suncor 

Fontana 

Kano, Initial Manager

Yang, Initial 

Member/Owner 

Kano, Manager Kano, Managing 

Member 

Yang, President 

Suncor 

Hesperia 

Kano, Initial Manager

Yang, Initial 

Member/Owner 

Kano, Manager Kano, Managing 

Member 

Yang, President 

Suncor 

Lynwood 

Yang, Initial Manger Yang, Managing 

Member 

Yang, Managing 

Member 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 10 of 22   Page ID #:10



 

 10  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

35. The Suncor Hesperia offering memorandum states that “the capital 

raised will further the development, construction and operation of a 99 bed sub-acute 

nursing facility … located in Hesperia, California” and that “[t]he use of these funds 

will be for the construction and operations of the Facility.”  The subscription 

agreements, signed by both the investors and Kano, state that Suncor Hesperia is 

“limited to only investing” in the Suncor Hesperia facility project.   

36. The Suncor Lynwood offering memorandum states that “the capital 

raised will further the development … of a 120 bed sub-acute nursing facility … 

located in Lynwood, California” and “[t]he use of these funds will be for the 

renovation and operations of the Facility.”  The subscription agreements, signed by 

both the investors and Yang, state that Suncor Lynwood is “limited to only investing” 

in the Suncor Lynwood facility project.  

The Defendants Misappropriated and Misused Investor Funds 

37. Defendants’ statements that investor funds would “only” be used for 

specific Suncor projects were false.  Rather than use the funds exclusively for the 

projects, they diverted the investor money to a variety of other purposes that were 

undisclosed and contrary to their representations.  Kano typically arranged the 

transfers, presented them to Yang for approval, and executed the transfers.  As a 

result of their conduct, a significant amount of the investor funds were never used for 

the operations or development of the specified projects.  

Use of Investor Funds to Pay Substantial Undisclosed Sales Commissions 

38. Yang and Kano agreed to pay an 18% commission to the Finder for all 

investor funds raised for the Suncor projects.  Yang and Kano entered into 

agreements to pay these commissions before approving the offering documents for 

each offering.  There is no disclosure in the Suncor Fontana, Suncor Hesperia, or 

Suncor Lynwood offering documents regarding using investor funds to pay any fees 

or commissions to any third party for acting as a broker or finder.  Yang and Kano 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 11 of 22   Page ID #:11



 

 11  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

fraudulently paid these commissions from investor proceeds as the money was being 

raised and while the solicitations were ongoing.  

39. These undisclosed commissions were in addition to $45,000 fees that 

each Suncor investor knowingly and separately paid to the Finder on top of each 

$500,000 investment.  

40.   Yang and Kano have transferred an estimated $3.5 million to the 

Finder, all from investor proceeds.  As a result, and contrary to the representations in 

the offering materials, these funds were never used for the operation and/or 

development of the Suncor projects.  Yang and Kano have never disclosed the 

commissions to the Suncor investors and did not instruct the Finder to disclose the 

commissions. 

Misappropriation of Suncor Fontana Funds to Pay Off Yang’s Personal Loans 

41. Shortly after Suncor Fontana received investor funds, Yang wrote a 

series of checks out of the Suncor Fontana account to various individuals totaling 

approximately $1.14 million to pay off purported loans from friends and family.  This 

use of funds is contrary to the representation in the Fontana offering materials that the 

funds would be “used solely for operating capital” for the Fontana facility.  

Misappropriation of Suncor Lynwood Funds to Purchase Property for Yang 

42. Yang and Kano diverted $500,000 of Suncor Lynwood investor funds to 

purchase real property near Redlands, California.  The property was purchased for, 

and is held in the name of, Relief Defendant Suncor Care, Inc., an entity under the 

control of Yang.  Again, the Defendants’ use of investor funds to purchase property 

for Yang’s benefit was directly contrary to the Defendants’ representations to 

investors. 

Misappropriation of Suncor Hesperia and Lynwood Funds for Yang’s 

Medical Practice 

43. Yang and Kano transferred approximately $960,000 of investor funds to 

Yang’s medical practice.  Between June 2013 and May 2014, Yang made transfers 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 12 of 22   Page ID #:12



 

 12  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

totaling $710,000 from Suncor Hesperia to his company, Relief Defendant Yanrob’s 

Medical, Inc.  The transferred money was used to pay Yang’s personal and medical 

practice expenses.  For example, a $500,000 transfer from Suncor Hesperia investor 

funds in August 2013 was used to secure a loan to purchase a building that Yang uses 

for his medical practice.  And, in another instance, a $100,000 transfer from Suncor 

Hesperia to Yanrob in February 2014 was used to pay Yang’s personal taxes and 

other expenses.  Further, in October 2014, another $250,000 was transferred from 

Suncor Lynwood investor funds for the benefit of Yanrob.  These transfers, again, 

directly contravened the Defendants’ representations in the offering documents. 

Misappropriation of Suncor Hesperia Funds to Purchase Land for Suncor 

Lynwood 

44. Yang and Kano diverted Suncor Hesperia investor funds to purchase 

land in Lynwood, California for the Suncor Lynwood facility.  Between February and 

June 2013, approximately $3.485 million of Hesperia investor funds were used for 

this purpose.  This use of funds is contrary to representations in the Suncor Hesperia 

offering documents.   

Misappropriation of Suncor Lynwood Funds for Suncor Fontana 

45. The Suncor Fontana project is substantially behind schedule and over-

budget.  There are no remaining investor funds in the Suncor Fontana escrow.  In 

clear contravention to representations made to Suncor Lynwood investors, Yang and 

Kano misappropriated at least $478,000 of Suncor Lynwood investor funds for the 

Suncor Fontana project.   

The Defendants Made Misrepresentations and Omissions Regarding the Use of 

Investor Funds with Scienter 

46. In light of Yang’s control over and management of the Defendant 

Suncor entities, responsibility for the Defendant Suncor entities’ offering documents, 

knowledge of the Finder’s commissions, and involvement in transfers contrary to 

representations in the offering documents, Yang knew, was reckless in not knowing, 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 13 of 22   Page ID #:13



 

 13  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

and/or was negligent in not knowing that statements and omissions he made in the 

Suncor Fontana, Suncor Hesperia, and Suncor Lynwood offering materials regarding 

the use of investor funds were false and misleading. 

47. In light of Kano’s control over and management of the Defendant 

Suncor entities, responsibility for the Defendant Suncor entities’ offering documents, 

knowledge of the Finder’s commissions, and involvement in transfers contrary to 

representations in the offering documents, Kano knew, was reckless in not knowing, 

and/or was negligent in not knowing that statements and omissions she made in the 

Suncor Fontana, Suncor Hesperia, and Suncor Lynwood offering materials regarding 

the use of investor funds were false and misleading. 

The Misrepresentations and Omissions Regarding the Use of Investor Funds 

Were Material 

48. The fact that Suncor investor funds were diverted from the operation 

and/or development of the projects they invested in to Yang, the Finder, and other 

projects would be significant to the investment decision of a reasonable investor 

because the funds were not available to enable the project to succeed and provide 

returns to investors. 

49. Additionally, the misappropriation of investor funds for uses other than 

the operation and/or development of the projects they were invested in would be 

material to the Suncor investors because this would disqualify their investments for 

the purposes of the EB-5 program.  That program requires that the full amount of the 

investment be made available to the business most closely responsible for creating the 

employment upon which the EB-5 petition is based.   

THE DEFENDANTS MADE MATERIAL MISSTATEMENTS AND 

OMISSIONS REGARDING ELIGIBILITY FOR THE EB-5 PROGRAM 

50. The Defendants touted EB-5 eligibility as a key attribute of the Suncor 

offerings and claimed as much in the offering documents.  Specifically, the offering 

memoranda for the Suncor Fontana, Suncor Hesperia and Suncor Lynwood offerings 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 14 of 22   Page ID #:14



 

 14  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

each state:  “This Offering has been structured to maximize the eligibility of Investors 

in the Company seeking to qualify their investment under the EB-5 Program.”   

51. EB-5 eligibility criteria require each investor to demonstrate that he or 

she made a qualified investment of at least $500,000 in a specified project and that 

the full amount of the investment has been made available to the business most 

closely responsible for creating the employment upon which the petition is based.   

52. Even after the Defendants began secretly diverting the EB-5 investor 

funds for commissions paid to the Finder, unrelated projects, and Yang’s benefit, they 

continued to solicit investments based on promises that the Suncor offerings are 

“structured to maximize” the prospects that investors would qualify for the EB-5 

program. 

53. In light of Yang’s control over and management of the Defendant 

Suncor entities, responsibility for the Defendant Suncor entities’ offering documents, 

knowledge of the Finder’s commissions, and involvement in transfers contrary to 

representations in the offering documents, Yang knew, was reckless in not knowing, 

and/or was negligent in not knowing that statements and omissions he made in the 

Suncor Fontana, Suncor Hesperia, and Suncor Lynwood offering materials regarding 

the EB-5 eligibility of the investments were false and misleading. 

54. Based on Kano’s control over and management of the Defendant Suncor 

entities, responsibility for the Defendant Suncor entities offering documents, 

knowledge of the Finder’s commissions, and involvement in transfers contrary to 

representations in the offering documents, Kano knew, was reckless in not knowing, 

and/or was negligent in not knowing that statements and omissions she made in the 

Suncor Fontana, Suncor Hesperia, and Suncor Lynwood offering materials regarding 

the EB-5 eligibility of the investments were false and misleading. 

55. These misstatements and omissions were material to Suncor investors 

who invested in the Suncor offerings based on the belief that they were designed to 

qualify the investors for the EB-5 program.  

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 15 of 22   Page ID #:15



 

 15  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

THE DEFENDANTS ENGAGED IN A SCHEME TO DEFRAUD 

SUNCOR INVESTORS 

56. Yang and Kano operated the Suncor entities as a scheme to defraud 

investors and as a fraudulent enterprise in connection with the sale of securities.  As 

detailed above, Yang and Kano made material misrepresentations and omissions in 

the offering materials.  In addition, each committed numerous acts in furtherance of 

this fraudulent scheme, including using their control over the Suncor entities to direct 

payments to themselves or entities under their control.     

57. Additionally, Yang and Kano lulled investors by providing incomplete 

and misleading information.  Yang and Kano are in regular communication with 

concerned investors who are inquiring about the status of their investments, the status 

of the specific project he or she invested in, and their EB-5 applications.  At various 

times, Yang and Kano have provided false and misleading updates regarding the 

status of the projects, assured investors that the projects are progressing smoothly, 

and claimed that they are in a position to provide refunds to investors.  Yang and 

Kano have not informed any investors about the undisclosed commission payments 

or other misuses of investor funds. 

58. The Defendants’ scheme also involves providing false and misleading 

documents to USCIS.  The offering documents for the Suncor offerings were not only 

provided to investors, but were provided to USCIS to enable it to assess whether the 

investments qualified for the EB-5 program.  As noted above, the offering documents 

contained false statements and omissions regarding facts critical to EB-5 eligibility.   

59. The Defendants were aware that these false and misleading offering 

documents were provided to USCIS to substantiate the amount and use of the 

applicants’ investments as part of the EB-5 program approval process. 

 

 

 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 16 of 22   Page ID #:16



 

 16  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

YANG AND KANO ARE CONTROL PERSONS OF THE SUNCOR 

ENTITY DEFENDANTS 

60. As detailed above, Yang is the owner/president of each of the Suncor 

entity defendants and Kano is the manager/senior vice president.  Yang and Kano are 

the only managers of the entities and the only people involved in their day-to-day 

operations. 

61. Yang and Kano exercised control over the general operations of Suncor 

Fontana, Suncor Hesperia, and Suncor Lynwood, and the specific violative activity 

that is the subject of this Complaint. 

CLAIMS FOR RELIEF 

FIRST CLAIM 

Fraud in the Offer or Sale of Securities 

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

(All Defendants) 

62. The Commission realleges and incorporates by reference paragraphs 1 

through 61, as though fully set forth herein. 

63. Defendants have, by engaging in the conduct set forth above, directly or 

indirectly, in the offer or sale of securities, by use of means or instrumentalities of 

interstate commerce or of the mails, with the requisite state of mind:  (a) employed 

devices, schemes or artifices to defraud; (b) obtained money or property by means of 

untrue statements of material fact or omissions to state material facts necessary in 

order to make the statements made, in light of the circumstances under which they 

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

of business which operated or would operate as a fraud or deceit upon purchasers of 

securities. 

64. By reason of the foregoing, Defendants violated, and, unless restrained 

and enjoined, will continue to violate Section 17(a) of the Securities Act. 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 17 of 22   Page ID #:17



 

 17  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

SECOND CLAIM 

Fraud in the Purchase or Sale of Securities 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder [15 

U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5] 

(All Defendants) 

65. The Commission realleges and incorporates by reference paragraphs 1 

through 61, as though fully set forth herein. 

66. Defendants have, by engaging in the conduct set forth above, directly or 

indirectly, by use of means or instrumentalities of interstate commerce, or of the 

mails, or of a facility of a national security exchange, with scienter: (a) employed 

devices, schemes or artifices to defraud; (b) made untrue statements of material fact 

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

light of the circumstances under which they were made, not misleading; and/or (c) 

engaged in acts, practices or courses of business which operated or would operate as 

a fraud or deceit upon other persons, in connection with the purchase or sale of 

securities. 

67. By reason of the foregoing, Defendants violated, and, unless restrained 

and enjoined, will continue to violate Section 10(b) of the Exchange Act and Rule 

10b-5(b) thereunder. 

THIRD CLAIM  

Control Person Liability Under Section 20(a) of the Exchange Act [15 U.S.C. § 

78t(a)] for Suncor Fontana, Suncor Hesperia, and Suncor Lynwood’s Violations 

of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder [15 U.S.C. § 

78j(b) and 17 C.F.R. § 240.10b-5] 

(Against Yang and Kano, Alternatively) 

68. The Commission realleges and incorporates by reference paragraphs 1 

through 61, as though fully set forth herein. 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 18 of 22   Page ID #:18



 

 18  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

69. Suncor Fontana, Suncor Hesperia, and Suncor Lynwood have, by 

engaging in the conduct set forth above, directly or indirectly, by use of means or 

instrumentalities of interstate commerce, or of the mails, or of a facility of a national 

security exchange, with scienter:  (a) employed devices, schemes or artifices to 

defraud; (b) made untrue statements of material fact or omitted to state material facts 

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

which they were made, not misleading; and/or (c) engaged in acts, practices or 

courses of business which operated or would operate as a fraud or deceit upon other 

persons, in connection with the purchase or sale of securities. 

70. Yang and Kano exercised control over the general operations of Suncor 

Fontana, Suncor Hesperia, and Suncor Lynwood and the specific activity upon which 

Suncor Fontana, Suncor Hesperia, and Suncor Lynwood’s violations are based. 

71. By reason of the foregoing, Yang and Kano are each liable as control 

persons under Section 20(a) of the Exchange Act for Suncor Fontana, Suncor 

Hesperia, and Suncor Lynwood’s violations of Section 10(b) of the Exchange Act 

and Rule 10b-5(b) thereunder. 

FOURTH CLAIM 

Fraud:  Aiding and Abetting Violations of Section 10(b) of the Exchange Act and 

Rule 10b-5 [15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5(b)] 

(Yang and Kano, Alternatively) 

72. Paragraphs 1 through 61 are hereby realleged and incorporated by 

reference. 

73. Suncor Fontana, Suncor Hesperia, and Suncor Lynwood have, by 

engaging in the conduct set forth above, directly or indirectly, by use of means or 

instrumentalities of interstate commerce, or of the mails, or of a facility of a national 

security exchange, with scienter:  (a) employed devices, schemes or artifices to 

defraud; (b) made untrue statements of material fact or omitted to state material facts 

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

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 19 of 22   Page ID #:19



 

 19  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

which they were made, not misleading; and/or (c) engaged in acts, practices or 

courses of business which operated or would operate as a fraud or deceit upon other 

persons, in connection with the purchase or sale of securities. 

74. By engaging in the conduct described above, Yang and Kano each aided 

and abetted the violations of Suncor Fontana, Suncor Hesperia, and Suncor Lynwood, 

in that they knowingly or recklessly provided substantial assistance to Suncor 

Fontana, Suncor Hesperia, and Suncor Lynwood in committing these violations. 

75. By reason of the foregoing, Yang and Kano each aided and abetted and, 

unless restrained and enjoined, will continue to aid and abet, Suncor Fontana, Suncor 

Hesperia, and Suncor Lynwood’s violations of Section 10(b) of the Exchange Act 

and Rule 10b-5(b) thereunder. 

FIFTH CLAIM  

Fraud:  Aiding and Abetting Violations of Section 17(a) of the Securities Act  

[15 U.S.C. § 77q(a)] 

(Yang and Kano, Alternatively) 

76. Paragraphs 1 through 61 are hereby realleged and incorporated by 

reference. 

77. Suncor Fontana, Suncor Hesperia, and Suncor Lynwood have, by 

engaging in the conduct set forth above, directly or indirectly, in the offer or sale of 

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

mails, with the requisite state of mind:  (a) employed devices, schemes or artifices to 

defraud; (b) obtained money or property by means of untrue statements of material 

fact or omissions to state material facts necessary in order to make the statements 

made, in light of the circumstances under which they were made, not misleading; 

and/or (c) engaged in transactions, practices, or courses of business which operated or 

would operate as a fraud or deceit upon purchasers of securities. 

78. By engaging in the conduct described above, Yang and Kano each aided 

and abetted the violations of Suncor Fontana, Suncor Hesperia, and Suncor Lynwood, 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 20 of 22   Page ID #:2020  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

in that they knowingly or recklessly provided substantial assistance to Suncor 

Fontana, Suncor Hesperia, and Suncor Lynwood in committing these violations. 

79. By reason of the foregoing, Yang and Kano each aided and abetted and, 

unless restrained and enjoined, will continue to aid and abet, Suncor Fontana, Suncor 

Hesperia, and Suncor Lynwood’s violations of Section 17(a) of the Securities Act. 

SIXTH CLAIM  

Equitable Disgorgement  

(Against Relief Defendants) 

80. Paragraphs 1 through 61 are hereby re-alleged and incorporated by 

reference. 

81. Relief Defendants Yanrob’s Medical, Inc., HealthPro Capital Partners, 

LLC, and Suncor Care, Inc., obtained money, property, and assets as a result of the 

violations of the securities laws by Defendants Robert Yang, Claudia Kano, Suncor 

Fontana, Suncor Hesperia, and Suncor Lynwood, to which the Relief Defendants 

have no legitimate claim. 

82. Yanrob’s Medical, Inc., HealthPro Capital Partners, LLC, and Suncor 

Care, Inc., should be required to disgorge all ill-gotten gains which inured to their 

benefit under the equitable doctrines of disgorgement, unjust enrichment and 

constructive trust. 

PRAYER FOR RELIEF 

I. 

Find that each of the Defendants committed the violations alleged in this 

Complaint; 

II. 

Enter  preliminary and permanent injunctions, in a form consistent with Rule 

65(d) of the Federal Rules of Civil Procedure, temporarily and permanently 

restraining and enjoining each of the Defendants from violating, directly or indirectly, 

the laws and rules alleged against them in this Complaint; 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 21 of 22   Page ID #:21



 

 21  

 

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

III. 

Order that each of the Defendants and Relief Defendants disgorge any and all 

ill-gotten gains, together with pre- and post-judgment interest, derived from the 

improper conduct set forth in this Complaint; 

IV. 

Order that each of the Defendants pay civil money penalties pursuant to 

Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d) of the 

Exchange Act [15 U.S.C. § 78u(d)] in an amount to be determined by the Court, plus 

post-judgment interest; and 

V. 

Order such other relief as this Court may deem just or appropriate. 

 

Respectfully this 19th day of November, 2015. 

 

     Jury Trial Demanded 

Respectfully Submitted, 

 

s/ David J. VanHavermaat 

David J. VanHavermaat, Local Counsel 

Securities and Exchange Commission 

444 South Flower Street, Suite 900 

Los Angeles, CA 90071 

 

     Zachary T. Carlyle 

     (pro hac vice application to be filed) 

Attorneys for Plaintiff 

Securities and Exchange Commission 

 

Case 5:15-cv-02387   Document 1   Filed 11/19/15   Page 22 of 22   Page ID #:22



Complaints and Other Initiating Documents 
5:15-cv-02387 Securities and Exchange Commission v. Yang et al

UNITED STATES DISTRICT COURT for the CENTRAL DISTRICT OF CALIFORNIA

Notice of Electronic Filing

The following transaction was entered by Van Havermaat, David on 11/19/2015 at 12:55 PM PST and 
filed on 11/19/2015 
Case Name: Securities and Exchange Commission v. Yang et al
Case Number: 5:15-cv-02387
Filer: Securities and Exchange Commission
Document Number: 1

Docket Text:
COMPLAINT No Fee Required - US Government, filed by Plaintiff Securities and 
Exchange Commission. (Attorney David J Van Havermaat added to party Securities and 
Exchange Commission(pty:pla))(Van Havermaat, David) 

5:15-cv-02387 Notice has been electronically mailed to: 

David J Van Havermaat     [email protected], [email protected], [email protected], 
[email protected] 

5:15-cv-02387 Notice has been delivered by First Class U. S. Mail or by other means BY THE 
FILER to : 

The following document(s) are associated with this transaction:

Document description:Main Document 
Original filename:J:\Common\Suncor\Complaint.pdf
Electronic document Stamp:
[STAMP cacdStamp_ID=1020290914 [Date=11/19/2015] [FileNumber=20537867-
0] [204cc2452aea28a12a375bd26b6943ec5e362060e0506a13aa7c34193725b14053
53ad36bd8942b747fef341a558b08722dc60e479766efec87edd4b32e7a9eb]]

Page 1 of 1CM/ECF - California Central District

11/19/2015https://ecf.cacd.uscourts.gov/cgi-bin/Dispatch.pl?763897882340881