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EB-5 Visa Fraud Claim Dismissed With Prejudice

Case Study

EB-5 Visa Fraud Claim Dismissed With Prejudice

October 3, 2019
Peter J. Biging

Mona Shah & Associates Global, a corporate immigration law firm headquartered in Manhattan, won a dismissal with prejudice in New York Supreme Court, bringing to rest a highly publicized lawsuit that had alleged legal malpractice, fraud, and breach of fiduciary duty in connection with the plaintiff’s investment in an EB-5 Visa Program project to obtain permanent residence status in the U.S.

On January 17, 2019 plaintiff Wei Ding Fan, a Chinese national, brought a suit in the Southern District of New York against the law firm Mona Shah & Associates PLLC and Ms. Shah, alleging, among other things, misrepresentation of the EB-5 investment, misrepresentation that he would obtain his green card within two years, and that Shah solicited his business without disclosing or obtaining a waiver of an alleged conflict of interest. However, at plaintiff’s request the action was voluntarily dismissed after questions were raised about whether the court had subject matter jurisdiction over the case. Fan subsequently brought the suit again in New York state court asserting the same claims. In the New York State Court complaint, covered in Law360, Fan demanded the law firm repay his $550,000 investment.

Peter J. Biging and Jennifer H. Feldscher, partners in Goldberg Segalla’s Manhattan office and members of the Management and Professional Liability practice, represented the Shah Defendants. After Goldberg Segalla moved to dismiss on the documentary evidence of the offering materials and Fan’s retainer agreement—which expressly disclosed Shah’s representation of the company in which Fan was going to be making the investment and included an express waiver of any conflicts—and sought sanctions for the filing of a frivolous complaint, Fan sought to again voluntarily dismiss the action without prejudice, and on April 16 submitted a stipulation of discontinuance of the action. In oral argument, Jennifer stated that because the action had now been twice voluntarily discontinued, pursuant to New York Civil Practice Law Section 3217(c) the latest voluntary dismissal constituted a dismissal with prejudice. The court agreed, and issued a decision and order dismissing the action with prejudice on September 23, 2019.

“I think justice was ultimately served, as this meritless lawsuit cannot be further pursued,” Peter said. “But I hope that the plaintiff’s choice to withdraw his complaint when confronted with a motion to dismiss and a request for sanctions—at the cost of having the claims dismissed with prejudice—will receive as much attention as the complaint received when it was filed.”


More about Goldberg Segalla’s Management and Professional Liability practice:

Attorneys in Goldberg Segalla’s nationwide Management and Professional Liability practice leverage hindsight, foresight, and insight to deliver cost-efficient and strategic legal solutions for our clients—every time. Our experience serving clients across countless professions and industries includes aggressively defending plaintiffs’ claims; minimizing damages from legitimate errors, mistakes, and accidents; and educating and preparing professionals to meet evolving and emerging industry-specific risks.

Management and Professional Liability Vice Chair Peter J. Biging heads up the Lawyers and Law Firms group within the practice. Peter and his team counsel and defend other lawyers against legal malpractice claims, in disciplinary proceedings where licenses are in jeopardy, and against all kinds of other claims which are often asserted by people who weren’t even the lawyers’ clients. We have defended attorneys who practice in all areas of the law, including personal injury, commercial litigation, mergers and acquisitions, banking and finance, debt collection, estate planning, bankruptcy, real estate, immigration, criminal law, and matrimonial law, to name just a few.