Fallen developer Dargey out of prison, owing $24 million

EVERETT — Disgraced and saddled with $24 million to pay back to defrauded investors, developer Lobsang Dargey has been released from federal prison.

It marks the latest chapter of Dargey’s extraordinary journey from Buddhist monk, to Tibetan refugee, to entrepreneur who spearheaded towering projects around Puget Sound, to convicted fraudster who duped over 200 Chinese investors out of millions of dollars on a promise of U.S. residency.

The Bellevue man, 46, was released from custody on Jan. 23, having served much of his sentence at a low-security prison in Lompoc, California. At sentencing in 2017, he pledged to “do everything that I can to help” the people he had misled.

Dargey, the son of poor illiterate barley and potato farmers in a remote Tibetan village, began studying to be a monk at the age of 13. In his teens, he collected grains to fund a stupa for local monks by going door-to-door for donations.

Amid political turmoil in Tibet in the 1990s, he tried twice to escape across the Himalayan mountains. On the second try, he and a small group evaded Chinese police for hundreds of miles on foot, court records show. According to a fellow monk who was one of his close friends, Dargey carried another refugee’s daughter, 3, on his back across the mountains. Ill-equipped for the bitter cold, they ate ramen, biscuits and snow.

The group crossed into Nepal under gunfire from Chinese security forces, while weary, malnourished and suffering from frostbite, on the way to Dharamshala in north India, home of the Dalai Lama, according to accounts in federal court papers.

For a few years he served as a “business monk,” in charge of finances at a monastery, before he immigrated to the United States in 1997, knowing little English, with only a few hundred dollars to his name.

He worked as gardener, house painter, and Sprint salesperson; wed the sister of tennis star Andre Agassi; and in 2006, he purchased a rundown building that’s now home to the Sno-Isle Food Co-op in Everett. Dargey oversaw a dramatic renovation, and two years later, he did the same with another downtown Everett landmark, the Chicago Title Building.

Then from the ground up, he led construction of a 100-unit mixed-use development on the site of a former car lot on Pacific Avenue, then known as Potala Village, named for the winter palace of past Dalai Lamas.

In those projects, he was not accused of fraud by federal prosecutors.

It was a towering 220-unit apartment complex on Grand Avenue, anchored by a year-round indoor farmers market on the ground floor, that began Dargey’s downfall in 2012.

He tied in the financing with the federal EB-5 program, enticing Chinese investors with a pitch that a $545,000 investment would be a pathway to a new life in the United States.

“In reliance on Dargey’s fraudulent promises, families who dreamed of a brighter future in the United States mortgaged their houses, sold their businesses and other assets, and invested the funds with Dargey,” prosecutors wrote in court papers. “Many moved to this country, started new jobs, and enrolled their children in American schools.”

He also raised $110 million from investors to build a 40-story skyscraper, Potala Tower, next to the Cinerama Theater in Belltown, and proposed other major projects in King County.

Dargey promoted himself as a deep-pocketed entrepreneur who was putting his own money into these developments, but in reality, he was siphoning money from investors — buying a $2.5 million home in Bellevue, withdrawing over $10 million for his own use and other unrelated projects, and in loan applications, covering up many millions of dollars in shortfalls by falsifying bank statements, according to federal prosecutors.

“Despite his repeated assurances to the contrary, Dargey shattered these immigrant investors’ dreams by looting millions of their investment dollars and using them for Dargey’s personal benefit … ,” prosecutors wrote. “The magnitude, breadth, and deceptive nature of Dargey’s misconduct is shocking.”

Dargey’s defense countered that he needed a nice Bentley, for example, because no Chinese investors would want to go into business with him, if he showed up at the airport in a dirty Toyota Tundra. In January 2017, Dargey pleaded guilty to conspiracy to commit wire fraud and a scheme to conceal information from the United States.

He was ordered to repay $24 million, with much of that owed to the investors.

Dargey could not be reached for comment this week.

In dozens of letters to the court, friends and associates described Dargey as a selfless, loving father and friend who lived far more modestly than prosecutors alleged, and who hardly seemed capable of the crimes recounted in the news.

Psychological exams suggested he lived with post-traumatic stress from his youth in China, as well as an attention disorder that could make him come off as scatterbrained.

U.S. District Court Judge Robert Lasnik later denied Dargey’s request to serve the last year of his sentence at a reentry center, leaving his placement to the discretion of the federal Bureau of Prisons.

Records show Dargey did eventually serve the last stretch of his time at a kind of halfway house in Seattle. His sentence also included three years on probation. For at least those three years, he must repay no less than 10% of his monthly household income for restitution, starting this month.

In the meantime, new developers jump-started the stalled construction of the Potala Tower in Seattle, and the 440-foot building, redubbed Arrivé, opened two blocks from Amazon’s headquarters in early 2019, while Dargey sat behind bars.

Caleb Hutton: 425-339-3454; chutton@heraldnet.com. Twitter: @snocaleb.