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DAVID J. MILLSTEIN, ESQ. (CSB# 87878)

GERALD S. RICHELSON, ESQ. (CSB #267705)

MILLSTEIN & ASSOCIATES

100 The Embarcadero, Suite 200

San Francisco, CA 94105

Telephone: (415) 348-0348

Facsimile: (415) 348-0336

Email: dmillstein@millstein-law.com

Email: grichelson@millstein-law.com

DANIEL B. LUNDY, ESQ. (N.Y. BAR ONLY) 

KLASKO IMMIGRATION LAW PARTNERS, LLP

1601 Market Street, Suite 2600

Philadelphia, PA 19103

(215) 825-8600

(215) 825-8699 (Fax)

Email: dlundy@klaskolaw.com

Attorneys for Proposed Interveners:

EB-5 INVESTERS IN: SAN FRANCISCO REGIONAL CENTER, LLC; CALIFORNIA GOLD 

MEDAL, LP; CALL SOCKET, LP; CALLSOCKET II, LP; CALLSOCKET III, LP; 

COMPREHENSIVE CARE OF OAKLAND, LP; NA3PL, LP; WEST OAKLAND PLAZA LP 

and RELATED ENTITIES INVOLVED IN THE SECURITY EXCHANGE COMMISION V. 

SAN FRANCISCO REGIONAL CENTER, LLC, ET. AL. CIVIL COURT ACTION

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SECURITIES AND EXCHANGE 

COMMISSION,

Plaintiffs,

v .

SAN FRANCISCO REGIONAL CENTER, LLC; 

THOMAS M. HENDERSON; CALIFORNIA

GOLD MEDAL, L.P.; CALLSOCKET, L.P.; 

CALLSOCKET II, L.P.; CALLSOCKET III, 

L.P.; COMPREHENSIVE CARE OF 

OAKLAND, L.P.; NA3PL, L.P.; WEST 

OAKLAND PLAZA, L.P.; CALLSOCKET, 

LLC; CALLSOCKET II, LLC; CALLSOCKET 

III, LLC; COMPREHENSIVE CARE OF 

CALIFORNIA, LLC; IMMEDIA, LLC; and 

NORTH AMERICA 3PL, LLC,

Defendants, and

Case No.: 3:17-cv-00223-RS

OPPOSITION TO PLAINTIFF’S 

MOTION FOR PRELIMINARY 

INJUNCTION. 

Date Filed: January 17, 2017

Case 3:17-cv-00223-RS Document 51 Filed 02/09/17 Page 1 of 9
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CALLSOCKET HOLDING 

COMPANY, LLC; CALLSOCKET III 

HOLDING COMPANY, LLC; 

BERKELEY

HEALTHCARE DYNAMICS, LLC; 

CENTRAL CALIFORNIA FARMS, 

LLC; and JL GATEWAY, LLC,

Relief Defendants, and 

MEMORANDUM OF POINTS AND AUTHORITIES

Interested Parties, Baoyi Peng, Chunjian Xin, Fei Zhou, Feng Li, Hao Chen, Jiaen Chen, 

Jianmei Zhu, Jainxin Wang, Jie Lin, Jifeng Yu, Jingyi Yan, Li Luo, Li Ma, Meng cau, Ming-Ho 

Chen, Pin Ni, QingJuang Yuan, Senjing Teng, Shaoyun Dong, Sunhai liu, Tan Wenbin, Wei 

Wang, Wngqun gao, Wu Qingyi, Xiaqing Zhao, Xiaoting Zheng, Xillin Fan, Xin Wei, Xuebin 

Wang, Yifan Wu, Yilai Ni, Yiling ni, Yonghong Zeng, Yu Yiqi, Yu Zhuang, Yuayuan Kou, 

Yuhong Ma, Yuhua Jiang, Yuxia Chen, Zenghui Huang, ZhiJun Lu, and several other EB-5 

investorsi(hereinafter “EB-5 Investors” or “Prospective Interveners”) respectfully submit the 

following memorandum of law in support of their Opposition to Plaintiff’s Motion for a 

Preliminary Injunction: 

I.

INTRODUCTION

The EB-5 Investors are foreign nationals primarily from China and India investing in San 

Francisco Regional Center LLC (“SFRC”) and other related entities in large part in attempts to 

obtain permanent legal residency under the United States Citizenship and Immigrations Service’s 

(“USCIS”) EB-5 Immigrant Investor Program. Like the state court action entitled Allan Young 

v. Thomas M. Henderson et. al. Case No.: RG-15-778891 pending in the Superior Court of 

California for the County of Alameda, the present action concerns the alleged misuse of funds by 

San Francisco Regional Center, LLC and related entities through its principle Thomas M. 

Henderson (“Henderson”). In neither the present action nor the state court action are any of the 

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EB-5 Investors alleged to be party to the alleged securities fraud and/ or breaches of contract/ 

common counts alleged against Henderson. 

The EB-5 Investors are, in fact, the victims of the alleged fraud and contract causes of 

action against Henderson and the SFRC related entities. The EB-5 Investors, however, differ 

from traditional victims of securities fraud and corporate mismanagement. The EB-5 Investors

investment in the SFRC related entities was premised not only on receipt of a return on that 

investment, but on their ability to obtain lawful permanent resident status (a.k.a. a “green card”) 

as a result of that investment. Many of the investors have in fact moved their families to the 

United States already, and abandoned their lives and careers abroad. While the Proposed 

Interveners would like to see their capital investment protected in a similar fashion as many 

victims of securities fraud, their primary motivation for making the investment was the ability to 

immigrate to the United Stated pursuant to Section 203(b)(5) of the Immigration and Nationality 

Act. As such, they request any appointment of receiver or other action in this matter be pursuant 

to their input in regards their ability to maintain their attempts to obtain permanent legal 

residency under the USCIS EB-5 program. 

The SEC has filed a motion for preliminary injunction seeking to appoint a receiver over 

all of the above named defendants, enjoin the above named defendants from further securities 

fraud, stay the state court action, enjoin the state court receivership, and appoint the state court 

receiver as the receiver in the present federal action. The EB-5 Investors seek to provide input to 

make sure that all operating entities continue to operate in a manner not jeopardizing their ability 

to obtain permanent resident status. In advancement of that goal the Prospective Interveners 

seek to have Comprehensive Care of Oakland (“CCOO”) excluded from the receivership, and for 

the court to appoint a receiver other than Susan L. Ueker to oversee the entities, and order 

whomever acts as receiver to specifically consider the effects of their actions on the EB-5 

Investors’ ability to obtain permanent legal residency under the EB-5 program in making their 

decisions relating the various businesses. EB-5 Investors are informed and believe that 

Henderson no longer has any ownership interest in CCOO, CCOO is in operation and certified to 

provide services under CalMed, Medicare, and MediCade the creation of a receiver would 

jeopardize its ability to continue to do so. Ms. Ueker’s actions to date, further, have jeopardized 

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the Proposed Interveners’ ability to obtain permanent residency by selling of company assets and 

failing to hire needed staff. Accordingly, EB-5 Investors, request the court exclude CCOO from 

the receivership and appoint a receiver other than Ms. Ueker who will be instructed to 

specifically consider Prospective Interveners’ ability to obtain permanent residency under the 

EB-5 program.

II.

STATEMENT OF FACTS

The Securities and Exchange Commissions (“SEC”) brings the present against 

Henderson, SFRC, and other EB-5 program investment projects for securities fraud. The suit 

alleges that Henderson through SFRC and other EB-5 investment vehicles raised upwards of 

$107 million in securities issued to approximately 215 investors as a means to participate in the 

Employment-Based Immigration Fifth Preference program (“EB-5”). The SEC alleges that 

Henderson though SFRC and other entities co-mingled investor funds from multiple EB-5 

projects as well as used at least $9.6 million for his own benefit.

III.

LEGAL ARGUMENT

A. Legal Standard.

A preliminary injunction is proper upon a showing of either “(1) a combination of 

probable success and the possibility of irreparable harm, or (2) that serious questions are raised 

and the balance of hardship tips in its favor.” Prudential Real Estate Affiliates, Inc. v. PPR 

Realty, Inc., 2004 F.3d 8676, 874 (9th Cir. 2000); Republic of the Philippines v. Marcos, 862 

F.2d 1355, 1362 (9th Cir. 1988) (en banc). It has been said that these two formulations 

“represent two points on a sliding scale” such that “the required degree of irreparable harm 

[which is low under the first test, which requires but a possibility of irreparable harm to the 

moving party] increases as the probability of success [which is high under the first test, which 

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requires a showing of probable success] decreases. Prudential Real Estate Affiliates, 204 F.3d at 

874.1 

In addition, “In deciding whether to grant the injunction, the court must balance the 

equities between the parties and give due regard to the public interest.” Idaho Watersheds 

Project v. Hahn, 307 F.3d 815, 833 (9th Cir. 2002). Consistent with the above the United States 

Supreme Court recently set forth the standard for granting a preliminary injunction: “A plaintiff 

seeking a preliminary injunction must establish that he is likely to succeed on the merits, that he 

is likely to suffer irreparable harm in the absence of preliminary relief, that the balance of 

equities tips in his favor, and that an injunction is in the public interest.” Winter v. Natural 

Resources Defense Council, Inc., 555 U.S. 7, 20, 129 S. Ct. 365, 374 (2008).

A. The Balance of the Hardships Tips Heavily in Favor of the EB-5 Investors.

As an alternative to showing “a combination of probable success and the possibility of 

irreparable harm,” Plaintiff may obtain interim injunctive relief by showing that “serious 

questions are raised and the balance of hardship tips in its favor.” GoTo.com, Inc. v. Walt Disney 

Co., 202 F.3d 1199, 1205 (9th Cir. Cal. 2000). 

In evaluating the balance of hardships, a court must consider the impact that granting or 

denying a motion for a preliminary injunction will have on the respective enterprises. 

International Jensen, Inc. v. Metrosound USA, Inc., 4 F.3d 819, 827 (9th Cir. 1993). In order to 

grant an injunction, such a balance requires a showing that the irreparable injury to be sustained 

by Plaintiff would be more burdensome than the harm caused to Defendant through imposition 

of the injunction. See Id. “Where the only hardship that the defendant will suffer is lost profits 

from an activity which has been shown to be infringing, such an argument in defense merits little 

equitable consideration.” Dr. Seuss Enterprises, L.P. v. Penguin Books USA, Inc., 924 F. Supp. 

1559, 1574 (S.D. Cal. 1996) (quoting Concrete Machinery Co. v. Classic Lawn Ornaments, Inc., 

843 F.2d 600, 612 (1st Cir. 1988)).

 

1

See also Sun Microsystems, Inc. v. Microsoft Corp., 188 F. 3d 1115, 1119 (9th Cir. 1999), 

quoting Nat’l Ctr. for Immigrants Rights v. INS, 743 F.2d 1365, 1369 (9th Cir. 1984).

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The EB-5 program allows foreign nationals who invest $1 million (or $500,000 if the 

investment is in a Targeted Employment Area) into a New Commercial Enterprise in the United 

States, and whose investment results in the creation of at least ten, new jobs for United States 

workers, to qualify first for conditional permanent resident status, then unconditional permanent 

resident status in the United States. Obtaining permanent resident status is a three stage process. 

First, an EB-5 investor must make a qualifying investment into a New Commercial Enterprise 

and file an I-526 petition. The I-526 petition contains documentation showing that the 

investment is a qualifying investment under the program rules, and contains predictions about 

when and how the job creation requirement will be met.

Second, once the I-526 petition is approved, the investor must apply for an immigrant 

visa at the U.S. consulate abroad, or file an application for adjustment of status if he or she is 

already in the United States in lawful non-immigrant status. Once the investor enters the country 

with an immigrant visa, or the application for adjustment of status is granted, the investor 

becomes a conditional resident,

Third, between 21 and 24 months after becoming a conditional resident, the investor must 

file an I-829 petition which demonstrates that the investor has maintained the investment in the 

new commercial enterprise, and the jobs either have been created or will be created within a 

reasonable time. If the New Commercial Enterprise is dissolved, or the investors receive any of 

their $1 million or $500,000 back, then they simply do not qualify for unconditional permanent 

residence. Similarly, if the jobs have not been created, or are not likely to be created within a 

reasonable time, then the investor would not be eligible for unconditional permanent residence. 

If the investor’s I-829 petition is denied, the investor and his or her family members are placed in 

removal (formerly deportation) proceedings. As a result, the failure of an EB-5 business has 

immigration and life consequences, not just financial consequences. These consequencesdeportation after many years of living in the United States- are particularly severe. As a result, 

EB-5 investors typically prioritize the receipt of their unconditional permanent residence over the 

return of their investment funds.

This fact makes EB-5 investors different from all other types of investors that might be 

victimized by fraud and deceit or misappropriation of funds, and makes a different approach to 

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resolving such claims necessary in EB-5 cases. While ordinarily a receiver’s efforts are focused 

exclusively on preserving and recovering assets for the eventual distribution to creditors and 

investors, that result is likely fatal to the immigration interests of the EB-5 investors, and could 

well result in the deportation of the investors and their family members that are in the United 

States, and the denial of the I-526 petitions or immigrant visa/adjustment of status applications 

for those who are not already conditional residents. Given that these entities were financed 

primarily with EB-5 money, and the EB-5 investors are the ultimate victims of the alleged fraud 

and misappropriation, and, as such are the class of persons whose interests are sought to be 

protected by the SEC action in the first place, their interests should be given priority to the extent 

possible. 

B. The State court Receiver Has not Acted in the Best Interest of the EB-5 Investors

So far, the State Court Receiver, Susan L. Uecher, has sold off two of the buildings in 

which the call centers were located, instituted a hiring freeze that has prevented the call centers 

from improving their business, and has failed to provide a current and credible plan for operating 

any of the entities. In fact, one of her proposals involved having the EB-5 investors invest 

another $500,000 in a project in a new regional center, and file new I-526 petitions.2 These 

actions have all frustrated the chances of success for the immigration interests of the EB-5 

investors. It does not appear that the State Court Receiver has any experience in EB-5 matters, 

or that she understands the requirements of the EB-5 program. The EB-5 investors are deeply 

concerned that she is not adequately considering their immigration interests, and do not believe 

that she will protect those interests if appointed in this matter.3

We are aware that Kevin Kent, of Conrad O’Brien PC had previously contacted the SEC 

about the receivership. The EB-5 investors would propose Mr. Kent as an alternative. The EB-5 

investors are currently reaching out to other possible alternates.

 

2 The result of this is the investors would have to start the whole multi-year process of becoming permanent 

residents over again.

3 See: Declaration of Yuhong Ma. 

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C. Comprehensive Care of Oakland LP should be excluded from receivership

We have been informed by attorneys for Comprehensive Care of Oakland, LP, that it is 

operating profitably and is on track to create the requisite number of jobs to support all of its 

investors’ I-829 petitions. We have also been informed that Defendant Henderson was bought 

out by the current operator of the company, and no longer has an interest in it. We further have 

been advised that there is a loan to Comprehensive Care of Oakland, LP, that would be placed in 

default upon the appointment of a receiver, and that Comprehensive Care of Oakland, LP would 

also allow Kaiser to terminate its contract with the company. This information will be set forth 

in the opposition to be filed by Comprehensive Care of Oakland, LP, with appropriate supporting 

documents. 

Assuming that Comprehensive Care of Oakland, LP is a viable, operating business, and is 

on track to create all the jobs needed to support all of its investors, and give the fact that placing 

this company in receivership could seriously jeopardize the viability of this business, and the 

investors’ chances of success on their immigration objectives, the hardships weigh heavily 

against placing this company in receivership at this time. If needed, a receiver can be appointed 

at a later date, however, the EB-5 investors, and the Court, need more time to ascertain the facts 

of the case. It would not be appropriate to place the business, and the investors’ green cards, at 

substantial risk at this point.

D. Plaintiff, SEC, Will Not Be Irreparably Harmed 

The EB-5 investors oppose the appointment of the State Court receiver, but do not 

generally oppose the appointment of a receiver, with the exception of Comprehensive Care of 

Oakland, LP. The EB-5 investors acknowledge that there may be some efficiency gained by

appointing the State Court Receiver, but assume that if the State Court Receiver’s accounting 

work has been thorough and well documented, it would not be difficult for a new Receiver to get 

up to speed. Additionally, we are informed via a letter to investors from SFRC’s attorneys, that 

although SFRC no longer has an equity interest in Comprehensive Care of California, LLC (the 

GP of Comprehensive Care of Oakland, LP), it is still the “manager”’; for EB-5 purposes, 

meaning that the receivership would already have the ability to monitor and control the 

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management company of Comprehensive Care of Oakland, LP. If this is the case, there is little 

danger of further fraud or misappropriation because SFRC is already included in the 

receivership. 

V.

CONCLUSION

For the foregoing reasons, EB-5 Investors respectfully request that this Court not appoint 

a receiver for Comprehensive Care of Oakland, LP and appoint a receiver different from that in 

the state court who will take more account of the EB-5 Investors immigration status.

Dated: February 9, 2017 MILLSTEIN & ASSOCIATES

By: ___________/s/___________________

Gerald S. Richelson, Esq. 

Attorneys for Proposed Intervenors

 

i We are in the process of being retained by approximately 60 EB-5 investors in this matter, and will file an 

amended appearance once the engagements are finalized.

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