Idaho EB-5 operator agrees to pay nearly $9 million to settle securities fraud case

Linus Unah – Fourth Estate Contributor

Washington, D.C., United States (4E) – The U.S. Securities and Exchange Commission (SEC) has announced that an Idaho man has agreed to pay back several million dollars he siphoned away for personal use rather than investing it as promised to create U.S. jobs through the EB-5 Immigrant Investor Program.

The SEC alleged that Serofim Muroff,40, raised more than $140.5 million in EB-5 offerings to Chinese investors through his companies Blackhawk Manager and ISR Capital.

The money was intended for the purposes of acquiring and developing luxury real estate in McCall, Idaho, and investing in gold mining ventures in Idaho and Montana.

Muroff allegedly misappropriated more than $5 million in investor funds for such unrelated uses as an investment in a zip line operation as well as his purchase of two personal residences, a Range Rover, and a BMW, according to the SEC’s complaint.

“As alleged in our complaint, Muroff secretly enriched himself with millions of dollars in EB-5 investor funds that should have gone into job-creating enterprises,” said Jina L. Choi, Director of the SEC’s San Francisco Regional Office.

In the settlement, which is subject to court approval, Muroff and his companies agreed to repay $5 million as well as an additional interest totaling $865,270 and a penalty of $2 million.

Muroff also agreed to be prohibited from conducting EB-5 offerings, acting as an officer or director of a public company, and associating with any investment adviser, the SEC said.

Muroff’s bookkeeper and administrative assistant Debra L. Riddle, who was charged in the SEC’s complaint along with Muroff and his companies, agreed to repay $503,417 plus interest totaling $81,626 and $100,000 in penalties.

They neither admitted nor denied the allegations in the SEC’s complaint.

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