The U.S. Securities and Exchange Commission’s Office of Investor Education and Advocacy and U.S. Citizenship and Immigration Services have jointly issued an “Investor Alert” to warn investors about possible fraudulent regional center schemes involved in the EB-5 immigrant investor program and to provide some tips about how immigrants seeking to participate in the EB-5 program can protect themselves from investing in such scams. The joint report follows in the wake of the exposure of two allegedly fraudulent EB-5 schemes which purportedly defrauded hundreds of immigrant investors out of millions of dollars in administrative fees. To read more about the USA Now Regional Center and Intercontinental Regional Center Trust of Chicago schemes, please see our previous article:  http://www.hooyou.com/news/news2013/news100813eb5.html.

The Investor Alert lays out some useful tips to avoid investing in such fraudulent regional center scheme: First, confirm that the regional center has been approved by USCIS. An official list of USCIS-recognized regional centers can be found here. Similarly, ask the regional center for copies of its Form I-924 (the form submitted to USCIS to seek official designation as a regional center) and supporting documentation, as well as copies of its I-924A submissions (an informational form the regional center must submit to USCIS at the end of every calendar year). Not only will these documents demonstrate that the regional center has sought approval through USCIS but they will also provide valuable information about the regional center and its business plan. Additionally, ask for copies of the investment offering memorandum or private placement memorandum and examine it carefully.

One should be skeptical of information provided by promoters of the regional center that is inconsistent with the investment offering memorandum or private placement memorandum. One should also be hesitant to invest in a regional center whose principals and developers have not made equity investments in the project, as this may suggest that their financial incentives may not be linked to the success of the enterprise. Verify any claims the regional center makes by cross-checking with governmental records. For instance, if the investment requires permits from the state or county in which the regional center is located, check state or county records to confirm that these permits have been issued. Carefully examine loan documents and offering statements to determine if the loans are secured. 

In addition, be aware of potential signs of fraud. Realize that an investment in a regional center does not guarantee lawful permanent residence, nor does it guarantee a return on investments. If a regional center promises lawful permanent residence or guarantees returns on investments, be cautious about investing in this regional center. In addition, be skeptical about highly consistent investment returns, as investment returns tend to rise and fall over time according to market conditions.

Many new commercial enterprise investment opportunities offered by regional centers are not registered with the SEC or with state regulators. When investing in such an unregistered offering, make sure to obtain additional information about the company to verify that the investment opportunity is legitimate. Check to make sure that the regional center is in compliance with federal and state securities laws. Additionally, confirm that any conflicts of interest between the different levels and companies managed by the regional center have been fully disclosed.

To see the full SEC/USCIS report, please click here.

Zhang & Attorneys has successfully represented many I-526 and I-924 immigrant investor petitions. We will perform our own due diligence to help you avoid investing in a fraudulent regional center. We do not receive any compensation from the regional centers in which our clients invest and we will always pass on any inducements we receive to our clients. If you are interested in the EB-5 program and would like to know more about the immigrant investor visa, please email us at info@hooyou.com.

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Founded in 1996, Zhang & Associates, P.C. offers legal services to clients nationwide in all aspects of U.S immigration law. We have successfully handled thousands of immigration cases.

At Zhang & Associates, P.C., our attorneys and supporting professionals are committed to providing high-quality immigration and non-immigration visa services. We specialize in NIW, EB-1, PERM, and I-485 cases. In the past seventeen years, we have successfully helped thousands of clients get green cards. If you plan to apply for a green card, please send your CV to Attorney Jerry Zhang (info@hooyou.com) for a free evaluation.

Zhang & Associates, P.C.

Silicon Valley • New York • Los Angeles • Chicago • Houston • Austin • Seattle

Tel:	1-800-230-7040, 713-771-8433
Email:	info@hooyou.com
website:	http://www.hooyou.com

 

(11/19/2013)