The United States Supreme Court on Monday confirmed the efforts of the Securities and Exchange Commission to take millions of dollars from an Orange County couple accused of defrauding foreign investors, but the decision limited the government to target only net profits. of illegal conduct.
The court battle was linked to the case of Charles C. Liu and Xin “Lisa” Wang of Laguna Niguel, who raised $ 27 million from dozens of investors in China to build a proton beam radiotherapy center for cancer treatment, he says. SEC.
The center was conceived under a government program in which immigrants can obtain a green card for themselves and their families if they invest a high enough amount and create enough jobs.
In promotional materials, the couple indicated that the project would create more than 4,500 jobs in Southern California, according to the SEC.
The center was never built, and the SEC alleged that the couple transferred $ 11 million in investor money to companies in China and another $ 7 million to their own accounts.
A federal judge who presided over the case ordered the couple to “spend” $ 26.4 million, a legal term to require someone to give up the proceeds of wrongful conduct.
Liu and Wang contested the order, claiming that the SEC had never been given the power to seek “ransoms” and that the courts could not impose such punishment.
They also argued that the $ 26.4 million fine did not take into account their legitimate business expenses.
Judge Sonia Sotomayor, who wrote Judgment 8-1, wrote that the SEC can seek repayment that does not exceed net earnings in one case, and ruled that the money should generally go to investors.
Judge Clarence Thomas was the only dissenter, writing that the SEC did not have the power to “dissipate” the money raised from the stock fraud.
The couple’s attorneys could not be reached for comment.
The Supreme Court decision left it to the lower courts to determine how much the couple owes in light of the new ruling.