The EB-5 visa program is mean to encourage investment in the United States and provide an opportunity for entrepreneurs to become permanent residents. The program is also an opportunity for fraud by those seeking to exploit non-citizens eager to legally stay in the U.S.
Fraud has become so common that the Center for Immigration Studies is mapping law enforcement actions and civil lawsuits based on allegations of fraud by those seeking EB-5 visa investors. As you can see, this issue spreads across the country.
Under U.S. immigration law, investments need to be shown to have resulted in jobs being created or maintained. If the investment just lines the pockets of a criminal, the EB-5 applicant may lose the investment and may not qualify for the program.
An estimated $200 million dollars worth of investments from EB-5 visa applicants may have been the subject of fraud in an alleged scheme in Vermont. The U.S. Citizenship and Immigration Services in August stated it intends to close the state’s immigrant investor regional center following alleged fraud at the Jay Peak ski resort, according to the Associated Press. Accusations of fraud against Ariel Quiros, the owner of Jay Peak Resort, and former Jay Peak president William Stenger started in 2016. The money came from hundreds of foreign investors through the EB-5 visa program intended for business development at or near the ski resort.
The struggling Indio Fashion Mall in Indio, California, is the subject of fraud allegations involving EB-5 investors. An investment company received $500,000 from each of 16 investors from Taiwan and China, supposedly to be used for a loan to the mall to help renovate and improve it. The investors’ visa applications were denied because the work on the mall never started. The required jobs weren’t created or maintained and the investors never got their money back, reports the Desert Sun.
Lobsang Dargey, a Tibetan immigrant turned real estate developer, was sentenced to four years in prison by a federal judge in Washington state in August after he pleaded guilty to wire fraud and concealing information from authorities. Dargey stated he would pay back the $24.1 million that was defrauded from investors who put their money into bogus real estate developments. Much of the money came from EB-5 visa applicants, according to the Everett Herald. Prosecutors claim they sold their homes and businesses to generate enough money to qualify for the program based on Dargey’s promises he would help them realize their dreams of achieving permanent U.S. residency.
The EB-5 visa program may result in more American jobs and permanent residency for an entrepreneur and his or her immediate family, but not if the money is invested into a fraudulent, money-making scheme.
If you live in Kentucky, or plan on investing here and you have questions about the EB-5 visa program, fill out our contact form or call us at (859) 971-0060 so we can discuss the legal process, the applicable law and how we can help.