The SEC alleged that Sethi and his companies falsely boasted to investors that they had acquired all the necessary building permits and that several major hotel chains had signed onto the project. They also provided falsified documents to U.S. Citizenship and Immigration Services, which is the federal agency that administers the EB-5 program, in an attempt to secure the agency's preliminary approval of the project and investors' provisional visas.

Meanwhile, Sethi and his companies have spent more than 90% of the administrative fees collected from investors despite their promise to return this money to investors if their visa applications are denied, the SEC said adding, more than $2.5 million of these funds were directed to Sethi's personal bank account in Hong Kong.

The EB-5 program enables foreign investors to possibly qualify for a green card if they invest $1 million or $500,000 in a "Targeted Employment Area" with a high unemployment rate in a project that creates or preserves at least 10 jobs for U.S. workers, excluding the investor and his or her immediate family, the SEC said.

Sethi and his companies used the lure of a pathway to U.S. citizenship to convince investors to wire a minimum of $500,000 apiece plus a $41,500 administrative fee to U.S. bank accounts, according to the complaint. These administrative fees are separate from the investment capital that the EB-5 program requires to be deployed into a job-creating enterprise, the SEC said.

More than $11 million in administrative fees were collected with the claim that they were fully refundable to investors if their visa applications are rejected. Sethi and his companies have instead been spending those funds, the SEC said.