A Chicago immigration lawyer and his two corporations lost their bid to dismiss SEC allegations they defrauded Chinese and Iranian investors who contributed $88.7 million toward building senior living facilities, after an Illinois federal district judge found the complaint sufficiently supported.
Sayed Taher Kameli didn’t identify any jurisdictional or statue of limitations issues requiring dismissal, and the Securities and Exchange Commission’s complaint properly alleged he and his companies had violated federal securities laws, the U.S. District Court for the Northern District of Illinois said Wednesday.
Kameli and his companies, Chicagoland Foreign Investment Group LLC and American Enterprise Pioneers Inc., argued that some of the investor funds at issue didn’t actually meet the definition of a security.
But the agency’s fraud claims don’t rely solely on the use of those funds, so the “definitional argument concerning the meaning of ‘securities’ does not call into question the court’s subject-matter jurisdiction,” Judge Joan B. Gottschall’s opinion said.
The defendants also argued that the SEC waited too long to bring some of its claims and ran afoul of the five-year statute of limitations period.
“Mysteriously, the SEC has not responded to this argument,” Gottschall said. “It seems unlikely that the Commission intended to concede the issue, however, because it is plainly incorrect.” The agency sued in 2017 and alleged that the violations at issue continued into at least 2014, the opinion said.
The defendants also argued that the SEC didn’t properly allege that they were the “makers” of the alleged misrepresentations. But the agency’s complaint “specifically alleges that defendants are ‘makers’ for purposes of” the relevant securities laws, and other portions of the complaint “sufficiently supported” those allegations, Gottschall said.
Kameli and his companies further argued that the SEC failed to allege that they’d knowingly disseminated the challenged statements. But the SEC’s complaint made those allegations, the opinion said. Although the complaint “uses the word ‘distribution’ rather than ‘dissemination,’ at least in this context, the words are essentially interchangeable.”
The court also rejected the defendants’ arguments that the agency hadn’t properly alleged scienter or that a safe harbor provision protected the statements from liability.
The Law Offices of Kameli & Associates PC and Oak Park, Ill.-based Nick Albukerk represented Kameli and his companies, according to the docket.
The case is SEC v. Kameli, 2020 BL 186948, N.D. Ill., No. 17-cv-04686, motion to dismiss denied 5/19/20.