LOBSANG DARGEY, a 43-year-old Bellevue developer, pleaded guilty today in U.S. District Court in Seattle to two federal felonies for orchestrating a massive fraud that siphoned more than $150 million from immigrant investors seeking U.S. citizenship. DARGEY admitted to lying to investors, federal regulators, and financial institutions about how their funds would be used under the federal EB-5 immigration program, which grants permanent residency in exchange for job-creating investments.
DARGEY promised investors—most from China—that their $500,000 contributions would finance two major Puget Sound developments: the ‘Path American Farmer’s Market’ in Everett and the ‘Potala Tower’ in Seattle’s Belltown neighborhood. But instead of channeling funds into construction, DARGEY secretly diverted millions to unauthorized expenses, including $11.5 million in undisclosed sales commissions to Asian brokers and $16.8 million funneled into unrelated real estate ventures. He also falsely claimed to have invested $32.5 million of his own money—money he never contributed.
‘Mr. Dargey exploited the dreams of his investors to line his own pockets,’ said U.S. Attorney Annette L. Hayes. ‘He promised to use the money he received in a way that would allow investors to apply to become permanent U.S. residents. Instead, Mr. Dargey secretly sent millions of dollars overseas and used millions more for his own pet projects.’ The deception left both developments critically underfunded and jeopardized the legal status of dozens of immigrant families.
To cover the growing financial shortfall, DARGEY fabricated documents to secure additional funding. He used a falsified bank statement to obtain a $25 million construction loan and altered financial records to deceive a private institutional investor into providing another $60 million. These lies unraveled in August 2015 when the Securities and Exchange Commission filed a civil suit and obtained a court order freezing DARGEY’s assets. Simultaneously, FBI agents executed search warrants at his offices in Bellevue and Everett.
Each of the two counts DARGEY pleaded guilty to carries a maximum sentence of five years in prison, for a potential total of ten years behind bars. He has also agreed to pay more than $24 million in restitution to defrauded investors. Sentencing is scheduled for April 6, 2017, before U.S. District Judge Thomas S. Zilly.
The investigation was led by the FBI, with prosecution handled by Assistant United States Attorneys Justin Arnold and Seth Wilkinson. The Department of Justice emphasized that this case reflects ongoing efforts to crack down on abuse of the EB-5 program, where foreign capital is meant to fuel economic growth—not individual greed.
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Key Facts
- State: Washington
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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