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UNITED STATES BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA

WEST PALM BEACH DIVISION

In re: 

160 Royal Palm, LLC, Case No.: 18-19441-EPK

Debtor. Chapter 11 

________________________________/

160 Royal Palm, LLC,

Adversary Proceeding

No.: 

Plaintiff, 

vs.

SOUTH ATLANTIC REGIONAL CENTER,

LLC, a Florida limited liability company;

UNITED STATES REGIONAL ECONOMIC

AUTHORITY, LLC, a Florida limited liability

company; UNITED STATES REGIONAL

ECONOMIC AUTHORITY, INC., a Florida

limited liability Company, PALM HOUSE 

HOTEL, LLP, a Florida limited liability

Company; JJW CONSULTANCY, LTD., a 

foreign company; and CONNECT INSURANCE

GROUP, INC., a Florida Company,

Defendants.

_________________________________/

COMPLAINT TO AVOID AND RECOVER FRAUDULENT TRANSFERS

160 Royal Palm, LLC (“160 Royal Palm” or the “Debtor”), a Florida limited 

liability company, sues Defendants, South Atlantic Regional Center, LLC (“SARC”),

a Florida limited liability company; United States Regional Economic Development

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Authority, LLC (“USREDA, LLC”), a Florida limited liability company, United States

Regional Economic Development Authority, Inc. (“USREDA, Inc.”), a Florida 

corporation, Palm House Hotel, LLLP (“PHH”), a Florida limited liability company; 

JJW Consultancy, Ltd. (“JJW”), a foreign company, and Connect Insurance Group,

Inc. (“CIG”), a Florida corporation, (collectively “Defendants”), and alleges as follows: 

JURISDICTION AND VENUE

1. This adversary proceeding is brought pursuant to 11 U.S.C. § 541 and

Federal Rule of Bankruptcy Procedure 7001.

2. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A), (H) and

(O).

3. This Court has subject matter jurisdiction under 28 U.S.C. § 1334(b).

4. Venue is proper before this Court pursuant to 28 U.S.C. § 1409(a) as

Debtor’s primary Chapter 11 bankruptcy case is pending in this District. 

PARTIES

5. 160 Royal Palm is a Florida limited liability company doing business in

Palm Beach County, Florida. 

6. South Atlantic Regional Center, LLC (“SARC”) is a Florida limited

liability company doing business in Palm Beach County, Florida.

7. United States Regional Economic Development Authority, LLC

(“USREDA, LLC”), is a Florida limited liability company doing business in Palm 

Beach County, Florida.

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8. United States Regional Economic Development Authority, Inc.

(“USREDA, Inc.”), is a Florida limited liability company doing business in Palm 

Beach County, Florida.

9. Palm House Hotel, LLLP (“PHH”), is a Florida limited liability

partnership doing business in Palm Beach County, Florida.

10. JJW Consultancy, Ltd. (“JJW”), is a foreign corporation organized under

the laws of Hong Kong and doing business in Palm Beach County, Florida.

11. Connect Insurance Group, Inc. (“CIG”), is a Florida corporation doing

business in Palm Beach County, Florida.

GENERAL ALLEGATIONS

12. On or about August 2, 2018 (the “Petition Date”), the Debtor filed a

voluntary petition under Chapter 11 of the Bankruptcy Code (the “Petition”), which 

is currently pending the West Palm Beach Division of the United States Bankruptcy 

Court, Southern District of Florida, Case No. 18-19441-EPK (the Bankruptcy Case”). 

13. Prior to the filing of the Bankruptcy Case, the Debtor was the owner of

a hotel construction project located in the Town of Palm Beach. The hotel is locally 

known as the Palm House Hotel. The hotel has been in a state of redevelopment for 

many years.

14. The Palm House Hotel has a tortured history. During its reconstruction,

ownership of the hotel property has transferred more than once and no owner was

able to complete the project. 

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15. Robert Matthews (“Matthews”) was the person most recently in control

of the Debtor.

16. Matthews, along with others including Joseph Walsh, Sr. (“Walsh”),

used the hotel project to solicit investments from foreign nationals under the EB-5 

program, enticing over $49 million in investments from dozens of foreign investors 

based on the promise of eased acquisition of green cards.

17. Matthews used the Debtor as a vehicle to commit a massive fraud upon

these investors. 

18. Walsh used the Defendants as vehicles to raise funds for Matthews.

Each of the Defendants were either owned or controlled by Walsh.

19. Matthews and Walsh concealed from creditors that millions of dollars

that were raised from investors for the development of the hotel project were instead 

being used for the personal benefit of Matthews, Walsh and their families. 

20. Upon information and belief, Walsh has fled to Hong Kong and has no

intention of returning to the United States. 

21. Matthews was indicted by the U.S. Attorney’s Office for his role in the

EB-5 Scheme. Matthews ultimately pled guilty to several felony counts arising from 

the criminal activity alleged in the indictment. At his plea hearing, Matthews 

testified that he “arranged with others to use and divert portions of the EB-5 funds 

for my personal benefit beyond what I was entitled to in the PPM. This included 

using EB-5 funds to obtain real and personal property which was put under the 

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control of myself and others rather than under the control of the hotel and its 

entities.” Matthews’ Plea Hearing Transcript at pg. 37.

22. Upon information and belief, the “others” Matthews was referring to

above include Walsh and the Defendants herein. 

23. Records show that in the six-year period prior to the Debtor’s

bankruptcy filing, SARC raised over $100,000,000 from investors for various projects, 

including but not limited, the Debtor’s hotel project. See Summary of Deposits and 

Payments from SARC attached hereto as EXHIBIT A.

24. Of the approximate $100 million, $34,190,940.71 was transferred to

Defendant, PHH for the benefit of the Debtor. The $34,190,940.71 were funds 

belonging to the Debtor. See Exhibit A.

25. Of the approximate $100 million, $9,627,755.00 was transferred to

Defendant, USREDA, LLC for the benefit of the Debtor. The $9,627,755.00 were 

funds belonging to the Debtor. See Exhibit A.

26. Of the approximate $100 million, $5,759,000.00 was transferred to

Defendant, USREDA, Inc. for the benefit of the Debtor. The $5,759,000.00 were funds 

belonging to the Debtor. See Exhibit A.

27. A total of $49,577,695.71 in Debtor funds were improperly transferred

to defendants, PHH, USREDA, LLC and USREDA, Inc.

28. Of the $9,627,755.00 improperly transferred to Defendant, USREDA,

LLC, $3,209,340.00 was subsequently transferred to Defendant, JJW. See Summary 

of Deposits and Payments from USREDA, LLC attached hereto as EXHIBIT B.

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29. Of the $9,627,755.00 improperly transferred to Defendant, USREDA,

LLC, $3,907,869.94 was subsequently transferred to Defendant, CIG. See Exhibit B.

30. Many of the “badges of fraud” articulated in Fla. Stat. § 726.105 were

present at the time of the transfers referenced herein: (a) the Transfers were made 

for the benefit of Matthews, an insider of the Debtor; (b) the Transfers were concealed 

from the EB-5 investors, the SEC, and many other creditors of the Debtor; (c) the 

transfers were made at a time when the EB-5 investors had been and were being 

defrauded; (d) the Debtor received no economic value or benefit in exchange for these 

transfers; and (e) the Debtor was insolvent at the time of these transfers.

31. On October 20, 2018, the U.S. Securities and Exchange Commission (the

“SEC”) filed unsecured claim number 71 in the Debtor’s Bankruptcy Case.

32. On July 25, 2019, the SEC filed an amended claim (Claim No. 71-2) in

the Debtor’s bankruptcy case, asserting an unsecured claim for $34,416,341.04.

33. The SEC’s claim has been allowed in the Debtor’s Bankruptcy Case.

34. The SEC’s claim is based on a disgorgement lawsuit filed on August 2,

2018 by the SEC in the United States District Court for the Southern District of 

Florida styled Securities and Exchange Commission v. Palm House Hotel LLLP, 

South Atlantic Regional Center, LLC, Joseph J. Walsh, Sr., and Robert V. Matthews 

(Defendants); 160 Royal Palm LLC, and United States Regional Economic 

Development Authority LLC D/B/A EB5 Petition (Relief Defendants), which bears 

Case No. 9:18-cv-81038.

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35. By virtue of: (a) such disgorgement lawsuit; and (b) the fact that EB-5

investor funds were transferred to the Debtor as early as August 30, 2013, see In re 

160 Royal Palm, LLC, Case No. 18-19441-EPK, 2019 WL 989829, at *8 (Bankr. S.D. 

Fla. Feb. 26, 2019), the SEC is an allowed unsecured creditor of the Debtor and was 

and allowed unsecured creditor of the Debtor as early as August 2013.

36. All conditions precedent necessary to bring this action have occurred,

have been satisfied, or have been waived.

COUNT I – CLAIM AGAINST DEFENDANTS TO SET ASIDE 

FRAUDULENT TRANSFER UNDER THE FLORIDA 

UNIFORM FRAUDULENT TRANSFER ACT

(11 U.S.C. § 544(b), Florida Statutes § 726.105(1)(a),

28 U.S.C. §§ 2415(a) & 2416)

37. The Debtor re-alleges and incorporates Paragraphs 1 through 36 above

as if fully set forth herein.

38. This is an action to avoid fraudulent transfers pursuant to 11 U.S.C.

§544(b), Fla. Stat. § 726.105(1)(a), 28 U.S.C. § 2415(a), and 28 U.S.C. § 2416.

39. Within six years preceding the Petition Date, the Defendants

transferred $49,577,695.71 of the Debtor’s funds to or for the benefit of the 

Defendants as more fully set forth above.

40. Defendants were the initial transferees and/or immediate or mediate

transferees of the fraudulently transferred funds or were the entities for whose 

benefit the transfers were made. 

41. The transfers were made with the actual intent to hinder, delay, or

defraud the Debtor’s creditors, including the SEC.

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42. The SEC was a creditor of the Debtor at the time of the transfers and on

the Petition Date.

43. Pursuant to 11 U.S.C. §544(b) and Fla. Stat. § 726.108(1)(a), the Debtor

is empowered to avoid the transfers stated herein. 

WHEREFORE, the Debtor demands entry of judgment in its favor avoiding 

the transfers to the Defendants as set forth in this Complaint, together with such 

other and further relief as the Court deems just and proper. 

COUNT II – CLAIM AGAINST DEFENDANTS TO SET ASIDE 

FRAUDULENT TRANSFER UNDER THE FLORIDA 

UNIFORM FRAUDULENT TRANSFER ACT 

(11 U.S.C. § 544(b), Florida Statutes § 726.105(1)(b),

28 U.S.C. §§ 2415(a) & 2416)

44. The Debtor re-alleges and incorporates Paragraphs 1 through 36 above

as if fully set forth herein.

45. Within six years preceding the Petition Date, the Defendants

transferred $49,577,695.71 of the Debtor’s funds to or for the benefit of the 

Defendants as more fully set forth above. 

46. Defendants were the initial transferees and/or immediate or mediate

transferees of the fraudulently transferred funds or were the entities for whose 

benefit the transfers were made. 

47. The Debtor received less than reasonably equivalent and/or no value in

exchange for the transfers. 

48. At the time of the transfers, the Debtor (i) was engaged or was about to

engage in a business or a transaction for which its remaining assets were 

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unreasonably small in relation to the business or transaction; or (ii) intended to incur, 

or believed or reasonably believed that it would incur, debts beyond its ability to pay 

as they became due.

49. Pursuant to 11 U.S.C. §544(b) and Fla. Stat. § 726.108(1)(a), the Debtor

is empowered to avoid the transfers stated herein. 

WHEREFORE, the Debtor demands entry of judgment in its favor avoiding 

the transfers to the Defendants as set forth in this Complaint, together with such 

other and further relief as the Court deems just and proper. 

COUNT III – CLAIM AGAINST DEFENDANTS TO SET ASIDE 

FRAUDULENT TRANSFERS UNDER THE FLORIDA UNIFORM 

FRAUDULENT TRANSFER ACT

(11 U.S.C. § 544(b), FLORIDA STATUTES §726.106(1), 

28 U.S.C. §§ 2415(a) & 2416)

50. The Debtor re-alleges and incorporates Paragraphs 1 through 36 above

as if fully set forth herein.

51. Within six years preceding the Petition Date, the Defendants

transferred $49,577,695.71 of the Debtor’s funds to or for the benefit of the 

Defendants as more fully set forth above. 

52. The SEC was a creditor of the Debtor at the time the transfers were

made to the Defendants, and on the Petition Date.

53. The Defendants were the initial transferees and/or immediate or

mediate transferees of the fraudulently transferred funds or were the entities for 

whose benefit the transfers were made. 

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54. The Debtor received less than reasonably equivalent and/or no value in

exchange for the transfers. 

55. At the time of the transfers, the Debtor was insolvent, or became

insolvent as a result of such transfers, or alternatively, the Debtor intended to incur, 

or believed it would incur, debts that would be beyond its ability to pay as such debts 

matured. 

56. Pursuant to 11 U.S.C. §544(b) and Fla. Stat. § 726.108(1)(a), the Debtor

is empowered to avoid the transfers stated herein. 

WHEREFORE, the Debtor demands entry of judgment in its favor avoiding 

the transfers to the Defendants as set forth in this Complaint, together with such 

other and further relief as the Court deems just and proper. 

COUNT IV – CLAIM AGAINST DEFENDANTS TO RECOVER 

AVOIDED TRANSFERS

(11 U.S.C. § 550(a), 28 U.S.C. §§ 2415(a) & 2416)

57. The Debtor re-alleges and incorporates Paragraphs 1 through 36 above

as if fully set forth herein.

58. This is an action to recover fraudulent transfers pursuant to 11 U.S.C.

§ 550(a).

59. The Defendants were the initial transferees and/or immediate or

mediate transferees of the fraudulently transferred funds or were the entities for 

whose benefit the transfers were made.

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60. To the extent that this Court avoids the transfers pursuant to Counts I,

II, and III, the Debtor is entitled to recover the value of said transfers, plus interest, 

from the Defendants pursuant to 11 U.S.C. § 550(a).

WHEREFORE, the Debtor demands entry of judgment in its favor against the 

Defendants in the amount of $49,577,695.71, plus interest and costs, together with 

such other and further relief as the Court deems just and proper.

COUNT V – CIVIL CONSPIRACY AS TO ALL DEFENDANTS 

61. The Debtor re-alleges and incorporates Paragraphs 1 through 36 above

as if fully set forth herein.

62. Each of the Defendants are the recipients of funds that were

fraudulently transferred to them.

63. The Defendants, Matthews, and Walsh were parties to a conspiracy.

64. There was an agreement between the Defendants, Matthews, and Walsh

to do an unlawful act or to do a lawful act by unlawful means, there were overt acts 

in furtherance of the conspiracy, and the Debtor was damaged as a result of acts done 

under the conspiracy.

65. As described above, the basis of the conspiracy is a fraud, theft and/or

fraudulent transfer of millions of dollars of the Debtor’s funds.

66. The Defendants, Matthews, and Walsh entered into a conspiracy and

acted in concert to divert, steal and/or fraudulently transfer the Debtor’s funds and 

use such funds for the personal benefit of Matthews and Walsh.

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67. The Defendants, Matthews, and Walsh acted with the full knowledge

and awareness that the funds they had diverted were being transferred with the 

intent to defraud creditors of the Debtor.

68. The Defendants, Matthews, and Walsh acted with the full knowledge

and awareness that the Debtor received no economic benefit from the funds they had 

diverted.

69. The Defendants, Matthews, and Walsh acted contrary to law, acted

according to a predetermined and commonly understood plan of action for the purpose 

of obtaining the Debtor’s funds, and took overt acts in furtherance of the conspiracy.

70. There was a meeting of the minds between and among the Defendants,

Matthews, and Walsh to commit the unlawful acts alleged herein.

71. The Debtor has suffered damage as a result of the conspiracy.

[Remainder of Page Intentionally Left Blank]

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WHEREFORE, the Debtor demands entry of judgment in its favor and 

against the Defendants in the amount of $49,577,695.71, plus interest and costs, 

together with such other and further relief as the Court deems just and proper.

Dated: October 7, 2019. 

Respectfully Submitted,

SHRAIBERG, LANDAU & PAGE, P.A.

Attorneys for 160 Royal Palm, LLC

2385 NW Executive Center Drive, Suite 300

Boca Raton, FL 33431

Telephone: 561-443-0800

Facsimile: 561-998-0047

Email: plandau@slp.law

Email: ependergraft@slp.law

By: /s/ Philip J. Landau

Philip J. Landau, Esq. 

Florida Bar No. 504017

Eric Pendergraft

Fla. Bar No. 91927 

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EXHIBIT A 

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EXHIBIT B 

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