Rags-to-riches: Bellevue developer who conned hundreds gets 4 years in prison

Lobsang Dargey, 43, scammed about 280 investors from China out of $24.2 million, money he diverted while collecting $235 million to invest in projects they hoped would lead to green cards and U.S. residency.

His life began in Tibet, where he slept near animals in a farmhouse and trekked across the Himalayan Mountains as an impoverished young man. Improbably, Lobsang Dargey eventually scrapped his way to the American dream — settling in a luxurious Bellevue home as a successful developer, becoming a U.S. citizen married to the sister of a tennis star, raising three kids.

Dargey’s fairytale life, it turned out, involved one of the biggest frauds of the decade in the Seattle area, scamming hundreds of investors out of tens of millions of dollars for projects from Everett to Belltown.

On Friday, two years after the scheme was uncovered by federal authorities, a federal judge in Seattle sentenced him to four years in prison, followed by three years of supervised release. In addition, he had previously agreed to pay about $24 million in restitution.

The case was one of the first of its kind in the country, involving a federal law that allows foreign investors to get green cards in exchange for funding job-creating projects in the United States. The EB-5 program, as it is known, has been particularly popular in helping fuel Seattle’s record development boom.

Prosecutors with the U.S. Attorney’s Office said Dargey had raised some $235 million in all, luring people in China with a “green card guarantee.” He obtained at least $500,000 from each foreigner for projects he actually wasn’t investing in himself.

Instead, he used money he siphoned off to buy a $2.5 million house in Bellevue and prop up his other projects, and went on lavish shopping sprees totaling hundreds of thousands of dollars. He dropped nearly $32,000 on one trip to Tiffany’s and rang up a $1,387 dinner tab at John Howie Steak in Bellevue. He also used phony bank statements to obtain big loans from private banks and institutional investors.

Assistant U.S. Attorney Seth Wilkinson said Dargey preyed on his foreign investors’ desire to experience the same American dream Dargey had realized. A victim’s representative who spoke through a translator at the sentencing said the fraud “shattered those dreams,” as it did for many other Chinese families.

Many of his victims reported that they had sold their properties in China to raise the…

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