The U.S. EB-5 Immigrant Investment Program offers foreign investors and entrepreneurs permanent residence (a green card) in exchange for an investment of $1 million (or $500,000 for targeted employment areas) and job creation. Over the years, EB-5 investment has virtually guaranteed its investors citizenship, even if it cannot guarantee a return on its high-risk investment. However, recent years have revealed that many EB-5 marketing agencies, EB-5 regional centers, and EB-5 projects were nothing but utopian pyramid and ponzi schemes.
Every year, the US releases 10,000 visas to EB-5 immigrant investors, but it wasn’t till 2013 that all 10,000 visas were claimed. Since then, the government has released an official warning to investors regarding the prevalence of EB-5 fraud. In the warning, the US Securities & Exchange Commission (SEC) reveals a few warning signs investors should steer clear of:
Other well-known EB-5 fraud cases include:
The SEC also offers helpful tips as to how to avoid EB-5 fraud:
If you have reason to believe an EB-5 investment project is a scam, or a Regional Center, agent, or seller is suspicious, you can report their activities to the SEC here. The SEC typically offers a monetary award to successful whistle-blowers. Scams can also be reported through Immigration (USCIS) or the Federal Trade Commission (FTC).
The attorneys at Lum Law Group has experienced business litigators with traditional EB-5 and class-action law suit experience. If you believe your investment qualifies as EB-5 fraud, we can help you. In the end, EB-5 is nothing more than a business contract.
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