One way of piercing the all-too-effective corporate veil in the EB-5 business is to examine the court records when insiders fight each other.
And what could be more insider-y than the records of the former chief economist of the EB-5 office in USCIS who, after she left the government, was hired by one regional center and then later worked with rival regional centers. Did she remove corporate secrets from the first regional center and then use them to start her own EB-5 consulting business?
This squabble, involving the federal courts, several regional centers, and many lawyers went on for years before my CIS colleague Bryan Griffith found out about it as we updated our U.S. map showing the location of various EB-5 frauds and follies.
The major players are Kimberly Atteberry; her husband, Christopher; her first private-sector employer, CMB, a cluster of 10 regional centers headquartered in Rock Island, Ill.; and the rival centers, such as Civitas Capital Group and Encore Enterprises, Inc. Atteberry left USCIS and joined CMB in July 2011 and then left it in February 2013 to set up her own firm, Vermillion Consulting. CMB sensed that some of their information had been swiped, so, to quote from an interim decision by U.S. District Judge Sarah Darrow:
CMB contacted local law enforcement, which searched the Atteberrys' house on March 4, 2013, and seized evidence that CMB believes contains copies of their proprietary information. Unfortunately for CMB, the seized material is currently in the custody of the U.S. attorney, and apparently completely unavailable to CMB to prove its case.
As a result, Atteberry and her husband (who is said to have filched some electronic information) and the various regional centers have been fighting discovery battles ever since. Her new clients say that CMB wants a wide collection of material that would compromise their trade secrets.
She is accused in this civil case of, among other things, violating the Illinois Trade Secret Act and the federal Computer Fraud and Abuse Act. What the U.S. attorney will do with the seized information is not known.
The case is now more than three years old, and no end is in sight. In the PACER system of electronic court records it is case 4:13-cv-04051-SLD-JEH.