Palm Beach News: Joe Walsh and Ryan Black in $50m EB5 Fraud Allegations

Palm Beach News: Joe Walsh and Ryan Black in $50m EB5 Fraud Allegations

Palm Beach News: Joe Walsh and Ryan Black in $50m EB5 Fraud Allegations

Update 24 March 2018

UNITED STATES DISTRICT COURT, DISTRICT OF CONNECTICUT issues several criminal indictments for multiple violations of federal law and conspiracy.

Several guilty pleas have been obtained.

South Atlantic Regional Center (“SARC”), Mr. Joseph Walsh, and his companies have been absolved from blame or fault or wrongdoing in these indictments and SARC was identified as a victim in this fraudulent scheme perpetrated by several individuals.

The first indictment is, of one count of Conspiracy to Commit Wire Fraud, in United States of America v. Gerry Matthews of Connecticut. He pled guilty to the charges.

Mr. Robert Matthews was indicted on 20 counts of fraud and conspiracy. Whether or not he pleads guilty will determine if the Palm House saga is actually over.

Mr. Nick Laudano was also indicted on several counts of conspiracy to commit fraud. Mr. Laudano also plead guilty to the charges.

Mr. Les Evans, of Palm Beach, an attorney, was subsequently charged with 11 counts of conspiracy and fraud, and was released on bail.

Ryan Black is supposedly putting together an offer for the hotel even though his involvement may well open the door to dangerous time consuming law suits from the Matthews side.

Glenn Straub is the man holding all the cards, he has the 1st mortgage on the property that is already in default.

The statement from Joe Walsh at USREDA

These events represent a significant outcome for the EB5 investors, and Palm House Hotel, LLLP. The General Partner, Mr. Joseph Walsh, Sr. has consistently stated that he and his companies have been defrauded by the Matthews family and other co-conspirators; Robert Matthews, Gerry Matthews, Nick Laudano and Les Evans and others, as outlined in a civil RICO suit, filed by General Partner, SARC and Palm House Hotel, LLLP. The RICO suit outlines how fraudulent documents were prepared by several attorneys, purchases of luxury yachts, lavish homes, luxury cars, jewelry, vacations and the like.

These indictments, and the guilty pleas to date, show conclusively that these charges were founded on facts. It has taken many months to gather and assemble the forensic accounting evidence of the multiple companies, off-shore accounts and entities, properties that were purchased in the general contractor’s name, family trusts and other means specifically designed to hide millions of dollars of transactions using several accounts, over several years.

Mr. Walsh thanks and applauds Mr. Brian Aryai, of ICON Compliance Services, a former U.S. Treasury and Homeland Security Senior Special Agent and certified public accountant among other impressive credentials. Mr. Aryai was one of the main forensic investigators and advisors in cases of national importance, such as the Bernie Madoff case. His expertise in sophisticated and complex fraud investigations has been instrumental in bringing this case to its inevitable conclusion. Mr. Aryai and his team worked tirelessly to provide several agencies a significant 1100-page report of investigation and numerous exhibits, in which the fraud and conspiracy was uncovered and brought to the point of prosecution.

UPDATE 19 March 2018

Although named in civil suits neither Joe Walsh or Ryan Black were named in the indictments that lead to the arrest of Robert Matthews and Les Evans. This is a developing situation, look out for further updates.

According to the indictment, Robert Matthews, a real estate developer who maintained residences in both Florida and Connecticut, was the developer in charge of The Palm House Hotel (“PHH”), a property that he sought to develop in Palm Beach. Evans is a real estate attorney.

The EB-5 visa program is a federal program by which foreign nationals and their families are eligible to apply for lawful permanent resident status (commonly known as a “green card”) if they meet certain requirements by investing in a development project in the U.S. Various entities in the U.S. act as intermediaries between potential foreign investors and investment projects. One such entity, South Atlantic Regional Center, LLC (“SARC”) in Palm Beach, Florida, advertised EB-5 projects to foreign investors, collected funds from foreign investors that were earmarked for certain development projects, and made the funding available to the respective development project.

The PHH was a development project advertised by SARC to EB-5 investors between approximately 2012 and 2014. Robert Matthews purchased the PHH property in August 2006, and then lost the property in foreclosure in 2009. In August 2013, Robert Matthews reacquired control of the property through an entity called Palm House, LLC. However, Robert Matthews’ brother, Gerry Matthews, was listed in incorporation documents as owning 99 percent of Palm House, LLC, and another individual, who had secured additional financing for Robert Matthews, was listed as owning the remaining 1 percent.

The indictment alleges that Robert Matthews, Evans and others defrauded EB-5 investors, SARC and the one-percent owner of PHH by representing that funds from EB-5 investors would be used to develop the PHH; that certain well-known individuals would be on the PHH advisory board and certain well-known entertainers, businesspeople and politicians “will be a part of the club”; and that Gerry Matthews was a member of the Palm House, LLC management team and was the 99 percent owner of the project. EB-5 investors invested in the PHH project by providing money to bank accounts controlled by SARC. SARC, in turn, provided EB-5 money earmarked for PHH use either into an account controlled by Robert Matthews, Evans and their agents, or into Evans’ Interest on Trust Account (“IOTA”) that was used to maintain his clients’ funds.

A Law Suit filed Dec 15, 2016 in Palm Beach has accused former Key West Used Car Salesman Joe Walsh and his sidekick Ryan Black of defrauding EB5 Investors from China and Iran.

The suit contends that former Key West Used Car Salesman Joe Walsh, who was a general partner of the Palm House, was “the criminal mastermind behind the Palm House fraudulent scheme” and that other players like Ryan Black were his lapdogs.

The Palm House is in foreclosure proceedings; in 2015, it was placed under the control of a court-appointed receiver, Cary Glickstein, who also is mayor of Delray Beach. The project has managed to accumulate $2.5 million in daily town fines, mostly for the failure to meet a February 2013 deadline to complete construction.

Cary Glickstein and Henry Handler the lawyer for former Key West Used Car Salesman Joe Walsh have a long history.

Henry Handler and his firm were once hired by the City of Delray Beach when Cary Glickstein was Mayor but soon after removed after a “conflict of interest” was brought to light (see reference).

Joe Walsh still seems to be promoting EB5 at Palm House on Facebook and is still operating the web site claims that SARC South Atlantic Regional Center, or SARC, is a Federally approved Regional Center headquartered in prestigious Palm Beach County, Florida.

Ryan Black is linked to Xinyuan Real Estate Co., Ltd. (ADR) (NYSE:XIN) a Chinese Real Estate Developer according to his website RBlackGlobal

Palm Beach, Florida is likely to evoke images of beautiful ocean views and warm, sandy beaches. But the south Florida town of about 10,000 year-round citizens also contains a startlingly large percentage of the nation’s billionaires. According to a Forbes list of the wealthiest individuals in the United States released earlier in 2016, Palm Beach is home to more than 25 billionaires. Considering that there were only 540 billionaires in total in the United States at the time the Forbes list was released, the small town of Palm Beach seems to have an unusually strong pull on the country’s ultra-wealthy. Among the list of billionaires living in Palm Beach, several are primarily known for their involvement in the financial industry. In order to be counted as having an affiliation with Palm Beach, these individuals needed to own property on the island or to live there for all or part of the year.

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Shayne Heffernan Funds Manager at HEFFX holds a Ph.D. in Economics and brings with him over 25 years of trading experience in Asia and hands on experience in Venture Capital, he has been involved in several start ups that have seen market capitalization over $500m and 1 that reach a peak market cap of $15b. He has managed and overseen start ups in Mining, Shipping, Technology and Financial Services.