U.S. District Court Judge James Robart has ordered that Path America’s assets be placed into receivership, severing CEO Lobsang Dargey’s control of the Everett company.

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U.S. District Court Judge James Robart has ordered that Path America’s assets be placed into receivership, severing CEO Lobsang Dargey’s control of the Everett company.

The Securities and Exchange Commission sought the move after filing a civil-securities fraud lawsuit in August alleging Dargey, 42, of Bellevue, has misappropriated tens of millions of dollars invested by Chinese citizens seeking to immigrate through the EB-5 visa program.

The court order, made public Friday, puts receiver Michael Grassmueck, of Portland, in charge of Path America’s operations.

That means he now controls the 40-story Potala Tower project at 2116 Fourth Ave. in Seattle, where construction started over the summer; the nearly completed apartment-and-retail project at 2900 Grand Ave. in Everett; and proposed projects in Shoreline and Kirkland. Grassmueck is responsible for maximizing the value of Path America’s assets for creditors and investors.

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Even though Dargey loses any decision-making power, legal experts said the court action doesn’t erase his ownership stake.

The judge’s order also does not place some of Dargey’s affiliated companies — Potala Farms, AMDO Construction and Dargey Enterprises — under the receiver’s control.

The receiver does have the authority to act to recover assets if he concludes the alleged transfer of millions of dollars in EB-5 investor funds to AMDO and Dargey Enterprises was inappropriate.

The judge’s order also gave the receiver total access to Path America’s records, including emails with attorneys who advised the company and Dargey in its projects.

Dargey’s attorney, Daniel Dunne, said in a court hearing Thursday that because there’s a criminal investigation of Dargey’s activities, unfettered access to these communications could jeopardize Dargey’s right under the Fifth Amendment against self-incrimination.

Robart’s order allows Dargey to ask for a protective order for specific documents he doesn’t want the receiver to obtain.

While the court-appointed receiver has similar powers to a bankruptcy trustee, his job is “marshaling and preserving” all of Path America’s assets, rather than simply liquidating them.

Still, EB-5 investors fear the latter. Many of the 170 Chinese investors who invested in the Potala Tower project want to see it completed so they can obtain visas.

“Our utmost fear is the court simply appoints a receiver to liquidate the entire asset,” wrote Beijing residents Xiaoguang Lei and Yijia Wang in an email to The Seattle Times. Families “made this investment decision mainly for giving their next generation one more choice.”

Grassmueck has been a receiver in past SEC cases, including a 2002 case that was called the largest stock fraud in Washington state history, Bainbridge Island-based Health Maintenance Centers and Znetix, who were accused of defrauding more than 5,000 investors nationwide of $91 million.

According to The Grassmueck Group, it recovered more than $30 million for investors. Znetix founder and former CEO Kevin L. Lawrence was sentenced to 20 years in prison. Other insiders were convicted of crimes and sentenced to jail as well.