In recent years, the EB-5 investment visa programs have experienced increased interest and participation. In 2013, the government issued all of the 10,000 visas allotted for this type of immigration for the first time, and EB-5 investor immigrants have continued to apply in great numbers since. According to United States Citizenship and Immigration Services (USCIS) statistics, most of these immigrants have applied using the regional center investment program. The regional center program offers investors the opportunity to make an investment through an approved center that is seeking to fund various types of businesses around the country. Often, these projects are large-scale and pool funds from multiple investors to meet the demands of the program and the needs of a local community. As of August 1, 2016, there were 851 USCIS-approved regional centers throughout the U.S.
Unfortunately, with so many centers and with such high interest from foreign investors, there have been many documented instances of fraudulent centers tricking investors. In many cases, regional center operators have misled investors about the scope of the business, the potential return, and the guarantees of the government for the visa. Simply investing in a business is not enough to satisfy the requirements for an EB-5 visa, a key fact to understand in these cases. In 2014, a Chicago regional center operator was indicted after he misled Chinese investors to gain $160 million for a hotel project that had not been approved by the appropriate officials nor backed by other major hoteliers as he claimed. In that case, the U.S. Securities and Exchange Commission (SEC) froze the assets and returned the majority of the money back to the investors. However, not every case has a similar ending. Many investors have lost a significant amount of money and have not been able to secure the EB-5 investment visa as a result of these scams.
If you are considering using a regional center to obtain an EB-5 investment visa for yourself and your family, take care to protect both your investment and your future visa by learning more about these regional centers.
Identifying Legitimate Regional Center Investments
The USCIS website maintains a list of approved regional centers on its website, as well as a list of centers that have been terminated from the program. However, information can change quickly, so it is important to take a few steps to ensure that you are working with a legitimate regional center on a business project that will result in the approval of your EB-5 investment visa. To help protect your investment and immigration status, it is a good idea to:
Hire an experienced immigration attorney.
The USCIS notes on its site that its list of regional centers does not in any way minimize the risk to the investor, and the government encourages potential investors to “seek professional advice.” A lawyer with knowledge of federal law and familiarity with the regional centers program can offer guidance and help investors perform the necessary due diligence before the investment.
Confirm the regional center has been approved by the USCIS.
Though the USCIS acknowledges their posted listing of centers may be incomplete or inaccurate, your selected center should appear on their website. If your center is not on the approved list or appears on the recently terminated list, it is a clear indication of a problem with the center and could be a risky investment. Additionally, the center should be able to provide a designation letter from the government confirming its approval.
Confirm the regional center has been approved for work in the stated location.
Even if your selected center is a certified center, make sure it is approved for operation in the location where your business will operate. In some cases, center operators have misled investors about the geographical reach of the center and led them into unsanctioned projects.
Warning Signs of a Fraudulent Regional Center or Risky Investment
Even if a regional center passes the initial benchmarks, investors should still be on the lookout for other warning signs that the operators of the center may not be completely straightforward. Some key signs include:
Guarantees of a return on your investment.
Investing in any business requires some degree of risk, and regional center projects are no different. No individual can guarantee the outcome of any business transaction, especially when it comes to large, expensive projects.
Guarantees for a visa or permanent resident status.
An investment in an EB-5 regional center allows an investor and his family to apply for conditional residency and later be eligible for permanent resident status should the requirements of the visa be satisfied. Anyone promising a secure path to citizenship is being misleading. The USCIS can still deny lawful status to those who do not qualify.
Not every investment is registered with the SEC. While the business may still be legitimate, it warrants additional investigation to ensure the company is operating in a truthful and legal manner.
While the regional centers program has many benefits for both immigrants and Americans citizens, it is not without some flaws. To protect your investment and your family, it is important to take the time and effort to ensure the legitimacy of a regional center and its business operation. At Tucker, Nong & Associates, our experienced lawyers understand the unique role of these centers and the importance of these investments for immigrants and their families.
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