The plaintiffs — seventeen Vietnamese nationals and one Indian national — allege that immigration attorney Robert Lubin, his then-partner Paul Ruby, and their affiliated entities ran a fraudulent scheme to solicit and misappropriate millions of dollars through the EB-5 Program. The project was a proposed redevelopment of parcels near 1770 Sherman Street in Denver, Colorado, previously housing a mosque, into a family entertainment center and a mixed-use high-rise. Plaintiffs allege the defendants knew the project was doomed from inception, made misleading promises about its viability and immigration benefits, and beginning in 2017 allegedly transferred investor funds to other EB-5 projects and affiliated entities without authorization or disclosure.
Judge Anthony J. Trenga of the Eastern District of Virginia held on April 13, 2026, that all claims against the business defendants — including Lubin, Ruby, DMPT LP, Red Leaf Development, RJ Capital, AIIL, and Golden Lamp Regional Center — fall within the arbitration clause in Section 17.11(c) of the Limited Partnership Agreement, which requires binding arbitration in Reston, Virginia under AAA Commercial Arbitration Rules. The court stayed those claims pending arbitration.
Plaintiffs argued the arbitration clause did not reach claims against non-signatories and that fraudulent inducement voided the provision. The court rejected both arguments. The court noted at the outset that Red Leaf, as the limited partnership's general partner, and Lubin, as Red Leaf's managing member, were themselves signatories to the LP Agreement. As to the remaining non-signatories, the court relied on Long v. Silver, 248 F.3d 309 (4th Cir. 2001), holding that compelling arbitration was appropriate because the complaint's own allegations showed all business defendants were so intertwined — jointly controlling Golden Lamp and DMPT, jointly developing marketing materials, and jointly perpetrating the alleged fund transfers — that enforcement of the arbitration agreement against all of them was warranted. On fraudulent inducement, the court applied Prima Paint Corp. v. Flood & Conklin Mfg. Co., 388 U.S. 395 (1967), holding that because plaintiffs did not allege fraud directed at the arbitration clause specifically, any claim that the LP Agreement itself was fraudulently induced falls within the arbitration provision for the arbitrator to resolve.
The court also rejected plaintiffs' argument that the Lubin defendants waived arbitration by failing to raise it in a related case, citing Forrester v. Penn Lyon Homes, Inc., 553 F.3d 340 (4th Cir. 2009), for the proposition that merely failing to assert arbitration as an affirmative defense does not constitute a default of the right to arbitration.
On the bank, the court dismissed all six claims against Atlantic Union Bank, successor to Washington First Bank as escrow agent. The court held that plaintiffs failed to plead a material misrepresentation or scienter by the bank as required for their Section 10(b) and Rule 10b-5 claims, noting that unlike the detailed allegations against Lubin and Ruby, the complaint offered only conclusory assertions that Washington First reviewed and approved the offering documents and thereby knew of the defendants' alleged conflicts. The court also held that plaintiffs failed to plausibly allege a conspiracy between the bank and the Lubin/Ruby defendants — a showing that would have been necessary both for the conspiracy counts and to attribute the business defendants' misrepresentations to the bank. The escrow agreement itself, the court noted, expressly disclaimed any representation by the escrow agent as to the validity, value, genuineness, or collectability of any security, document, or instrument held by or delivered to it. The court further held that the complaint's gross negligence theory rested on an extra-contractual duty of care inconsistent with the narrow, contractually defined scope of the escrow arrangement, which obligated the bank only to hold funds and release them to DMPT upon approval of plaintiffs' I-526 immigration petitions.
The case has been placed on the inactive docket pending completion of arbitration.