SEATTLE — A federal judge on Friday sentenced Lobsang Dargey to four years in prison, saying the disgraced developer found a path to the American dream, and then preyed on others who yearned for the same.
U.S. District Court Judge Robert Lasnik said Dargey belonged behind bars for his “incredibly reckless” conduct. Dargey hurt people like himself — those who wanted to make a better life for their families in the U.S., Lasnik said.
The typical immigrant comes here and “works like heck” so the next generation can prosper, the judge said. Instead, the defendant turned to harming others.
Dargey, 43, of Bellevue, pleaded guilty in January to wire fraud and concealing information from authorities. He must turn himself in at a later date to begin his sentence. He likely will be imprisoned near his family, who now live in another state.
Dargey brought Potala Village and Path America Farmer’s Market to Everett and was attempting to build a Seattle skyscraper when the federal Securities and Exchange Commission in 2015 brought legal action to halt his fraud.
Under the plea agreement, Dargey admitted to diverting millions of dollars of investors’ money. Much of it was raised under a federal EB-5 program that seeks to spur economic development by providing immigrant investors a quicker path toward legally living in the U.S. Many of his investors have been denied a green card or live in fear of deportation, said prosecutors, who sought a decade-long sentence.
“He stole their futures in this country,” Assistant U.S. Attorney Seth Wilkinson said.
Baipeng Wu spoke on behalf of the victims. He said his family sold their house in China to raise money to invest in Dargey’s projects. He recounted being told that his children, 7 and 13, would one day go to school with the children of others in business with Dargey. Now he worries they will be sent back to China.
“You were using the American spirit, the American freedom as bait…,” he told the defendant Friday. “This greed blinded your conscience.”
As part of his plea, Dargey agreed to pay back $24 million to his investors.
The defense team suggested a year in prison would be appropriate.
Dargey’s projects brought hundreds of jobs and millions of dollars in economic development to Everett and the region, attorney Bob Mahler told the judge. When his misdeeds were discovered, Dargey pushed to complete his unfinished projects in a bid to make his investors whole, he said.
Lasnik wasn’t convinced. He said the hot real estate market played a big role in mitigating the damage. Dargey was a charismatic salesman who believed everything would work out, the judge said.
Instead of struggling in America, Dargey “comes over and rockets forward,” Lasnik said. “I still am desperate to hear where things went wrong.”
Dargey grew up in Tibet where he trained to be a monk. He fled to avoid persecution by Chinese security forces. He reached the U.S. in 1997 and started working a variety of jobs. His Everett connection began in 2006 when he purchased the Everett Public Market.
The foundations for Dargey’s fraud were laid in 2010 when he began development projects in Seattle and Everett and tied them to the federal EB-5 program.
Prosecutors said Dargey convinced Chinese investors and lenders to put nearly $240 million into his projects, and he illegally spent the money on business that didn’t qualify for the EB-5 program, or diverted it for his own use. He wooed clients with fancy steakhouse dinners and drove a Bentley.
Mahler said Dargey lives with traumatic stress linked to his flight from Tibet and has difficulty reading and understanding English. He said others in the business should have warned Dargey that he was spinning out.
“The brakes failed,” he said. “… I just don’t think he understood how to run an organization.”
The Seattle courtroom was packed with dozens of Dargey supporters, many of them immigrants from Tibet and China. His wife sat with their young daughter resting on her lap. The couple also have toddler twins. At the advice of his attorneys, Dargey remained silent during the hearing. Earlier in the morning, he had hugged and thanked friends and family in the courtroom.
Before announcing the sentence, Lasnik told Dargey that he saw more recklessness than greed in his actions. The judge likened Dargey’s business deals to a time when Dargey tried to surf in the Pacific Ocean, an anecdote that was shared with the court in a letter of support. Dargey lied to his friends about knowing how to swim. He almost disappeared into the water.
“You cannot overwhelm life with just your desire to overwhelm it,” Lasnik said.
Rikki King: 425-339-3449; rking@heraldnet.com; Twitter: @rikkiking.
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