Feds: Developer of big Everett project skimmed investor money

EVERETT — The developer of a hotel, apartment complex and farmer’s market in downtown Everett is under investigation by the federal government for allegedly bilking overseas investors out of millions of dollars.

Lobsang Dargey, the CEO of Path America and the builder of the Potala Place development, is being sued in federal court by the U.S. Securities and Exchange Commission.

The civil complaint, filed Monday in U.S. District Court in Seattle, says Dargey fraudulently raised more than $125 million through sales of securities to at least 250 investors.

In particular, funds raised for downtown Everett’s Potala Place building and the 40-story Potala Tower skyscraper in downtown Seattle allegedly were misappropriated, sometimes redirected to other projects. The government also contends money was diverted to buy a luxury home in Bellevue and make cash withdrawals, including at several casinos.

Potala Place, which occupies half a block at Grand Avenue and Wall Street in Everett, has not opened. It is a 220-unit apartment building with 60,000 square feet of retail space, including the Potala Farms boutique grocery-cum-farmer’s market.

Potala Tower has broken ground, but a web camera feed on the project’s Web page just shows a hole in the ground with some construction equipment.

A message left for Lobsang Dargey was not immediately returned Monday.

Everett Mayor Ray Stephanson could not be reached for comment.

Everett Chief Administrative Officer Debra Bryant said she had not heard about the complaint until contacted by a reporter.

“I think it’s too soon to make any determinations on the impact of that,” Bryant said.

“There’s just not enough information,” she added.

Path America is a highly visible local example of how the government’s EB-5 visa system works. Foreign nationals who invest at least $500,000 in a project that generates or preserves at least 10 jobs for U.S. workers may qualify for residency in the United States.

Dargey and Path America used the EB-5 system to raise money from Chinese investors by encouraging them to invest in Potala Place and Potala Tower.

However, the suit alleges that of the $125 million raised, $17.6 million has been misappropriated.

Among the charges: $14.7 million has been used in separate real estate projects under Dargey’s control — Potala Shoreline LLC and Potala Village Kirkland LLC. Those projects are not eligible for the EB-5 visa program.

Dargey also is accused of using $2.5 million in investor funds to purchase a home for himself in Bellevue and making cash withdrawals of about $350,000. More than $200,000 of the money was withdrawn at 14 different casinos in Washington, Nevada, California and British Columbia, according to the complaint.

Dargey allegedly promised his backers that their investments would make them eligible for U.S. residency. He failed to reveal that those investments would not qualify under the EB-5 program if they weren’t used for those dedicated projects, federal officials say.

Details are provided in the complaint and hundreds of pages of supporting documents. Among other things, they show that each investor who bought a $500,000 partnership interest in either of the two Path America projects also was charged a $45,000 administrative fee. The investment capital was wired to an escrow account in the U.S. while the administrative fee was wired to an account in Hong Kong.

Approximately $41 million was raised from 82 Chinese nationals for the Potala Place and Farmer’s Market in Everett. About $85 million was raised from 170 Chinese nationals for Potala Tower in Seattle.

Backers were told that the capital raised for the Everett project also would be invested in Everett Hospitality Co., the Dargey-controlled company that built the new 122-room Hampton Inn in Everett next to Potala Place. The hotel opened in 2014.

According to the complaint, on Sept. 9, 2014, Dargey transferred $1.5 million from the account for the Potala Tower project in Seattle to an account in the name of Dargey Development, another company which he controls.

The next day, Dargey transferred another $1 million from the Potala Tower account directly into an account controlled by Dargey and his wife, Tamara Agassi Dargey, according to the complaint.

Then on Sept. 14, 2014, Dargey used nearly $2.5 million from the account in his and his wife’s names to purchase a home in Bellevue. The purchase was made in the name of Bellewood Farms Trust, the beneficiaries of which are the Dargeys.

Tamara Agassi Dargey is the sister of tennis star Andre Agassi. She is not named as a defendant in the suit.

The suit also alleges that Dargey withdrew about $350,000 in cash from both the Potala Tower and Potala Place accounts between October 2012 and June 2015, mostly with a debit card or at a bank or casino teller.

From 2012-15, Dargey allegedly diverted $7.5 million from the Potala Farmer’s Market and Potala Tower accounts to an account in the name of Potala Village Kirkland.

In 2014 and 2015, Dargey also shifted a total of $7.2 million from the Potala Tower to purchase property in Shoreline, the complaint alleges.

The Securities and Exchange Commission has asked a federal judge to approve a restraining order prohibiting Dargey or his companies from raising more money from investors, selling any securities of any business interest they own, and freezing all their assets.

The government also is seeking an accounting of all money received from investors, an order prohibiting the alteration or destruction of books and records, an order to return any investors’ funds that have been transferred overseas back to the United States and unspecific civil monetary penalties.

Chris Winters: 425-374-4165; cwinters@heraldnet.com. Twitter: @Chris_At_Herald.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

A firefighter stands in silence before a panel bearing the names of L. John Regelbrugge and Kris Regelbrugge during the ten-year remembrance of the Oso landslide on Friday, March 22, 2024, at the Oso Landslide Memorial in Oso, Washington. (Ryan Berry / The Herald)
‘Flood of emotions’ as Oso Landslide Memorial opens on 10th anniversary

Friends, family and first responders held a moment of silence at 10:37 a.m. at the new 2-acre memorial off Highway 530.

Julie Petersen poses for a photo with images of her sister Christina Jefferds and Jefferds’ grand daughter Sanoah Violet Huestis next to a memorial for Sanoah at her home on March 20, 2024 in Arlington, Washington. Peterson wears her sister’s favorite color and one of her bangles. (Annie Barker / The Herald)
‘It just all came down’: An oral history of the Oso mudslide

Ten years later, The Daily Herald spoke with dozens of people — first responders, family, survivors — touched by the deadliest slide in U.S. history.

Victims of the Oso mudslide on March 22, 2014. (Courtesy photos)
Remembering the 43 lives lost in the Oso mudslide

The slide wiped out a neighborhood along Highway 530 in 2014. “Even though you feel like you’re alone in your grief, you’re really not.”

Director Lucia Schmit, right, and Deputy Director Dara Salmon inside the Snohomish County Department of Emergency Management on Friday, March 8, 2024, in Everett, Washington. (Ryan Berry / The Herald)
How Oso slide changed local emergency response ‘on virtually every level’

“In a decade, we have just really, really advanced,” through hard-earned lessons applied to the pandemic, floods and opioids.

Ron and Gail Thompson at their home on Monday, March 4, 2024 in Oso, Washington. (Olivia Vanni / The Herald)
In shadow of scarred Oso hillside, mudslide’s wounds still feel fresh

Locals reflected on living with grief and finding meaning in the wake of a catastrophe “nothing like you can ever imagine” in 2014.

The rezoned property, seen here from the Hillside Vista luxury development, is surrounded on two sides by modern neighborhoods Monday, March 25, 2024, in Lake Stevens, Washington. (Ryan Berry / The Herald)
Despite petition, Lake Stevens OKs rezone for new 96-home development

The change faced resistance from some residents, who worried about the effects of more density in the neighborhood.

Rep. Suzan DelBene, left, introduces Xichitl Torres Small, center, Undersecretary for Rural Development with the U.S. Department of Agriculture during a talk at Thomas Family Farms on Monday, April 3, 2023, in Snohomish, Washington. (Olivia Vanni / The Herald)
Under new federal program, Washingtonians can file taxes for free

At a press conference Wednesday, U.S. Rep. Suzan DelBene called the Direct File program safe, easy and secure.

Former Snohomish County sheriff’s deputy Jeremie Zeller appears in court for sentencing on multiple counts of misdemeanor theft Wednesday, March 27, 2024, at Snohomish County Superior Court in Everett, Washington. (Ryan Berry / The Herald)
Ex-sheriff’s deputy sentenced to 1 week of jail time for hardware theft

Jeremie Zeller, 47, stole merchandise from Home Depot in south Everett, where he worked overtime as a security guard.

Everett
11 months later, Lake Stevens man charged in fatal Casino Road shooting

Malik Fulson is accused of shooting Joseph Haderlie to death in the parking lot at the Crystal Springs Apartments last April.

T.J. Peters testifies during the murder trial of Alan Dean at the Snohomish County Courthouse on Tuesday, March 26, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
Bothell cold case trial now in jury’s hands

In court this week, the ex-boyfriend of Melissa Lee denied any role in her death. The defendant, Alan Dean, didn’t testify.

A speed camera facing west along 220th Street Southwest on Tuesday, Nov. 21, 2023 in Edmonds, Washington. (Olivia Vanni / The Herald)
New Washington law will allow traffic cams on more city, county roads

The move, led by a Snohomish County Democrat, comes as roadway deaths in the state have hit historic highs.

Mrs. Hildenbrand runs through a spelling exercise with her first grade class on the classroom’s Boxlight interactive display board funded by a pervious tech levy on Tuesday, March 19, 2024 in Marysville, Washington. (Olivia Vanni / The Herald)
Lakewood School District’s new levy pitch: This time, it won’t raise taxes

After two levies failed, the district went back to the drawing board, with one levy that would increase taxes and another that would not.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.