Lawsuit aims to return funds to investors for failed Chicago hotel

Two years ago, the Securities and Exchange Commission sued Anshoo Sethi, the developer of the failed O’Hare Hotel and Convention Center, accusing him of scamming more than 250 people who had invested in the development through the controversial EB-5 program. Many of these investors were from China.

Now, a venture led by Sethi is suing 15 firms or individuals who helped him raise backing for the project. Sethi is reportedly demanding that they return commissions they collected during fundraising for the planned 995-room hotel near O'Hare International Airport that never came to fruition.

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Chicago Business is reporting that the project's investors recovered about $147 million of the $160 million invested in the project. A new lawsuit filed in Cook County Circuit Court claims that some of the brokers that raised the funds have not returned their commissions, which average about $40,000 for each investor for a total of $2.9 million. The suit accuses the brokers of tax fraud and evading Chinese laws.

A statement from the venture's lawyer, Bernard P. Edelman of Chicago-based Edelman & Partners, claims that the suit is part of a plan to return overdue money to investors.

Meanwhile, the paper notes that the 2.8-acre development site is still for sale, with an asking price of $17 million. The parcel has been tied up in court since mid-2013, when lender Cathay Bank filed a $5.5-million foreclosure suit against it.

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