Fraudsters Use EB-5 Immigrant Investor Program To Scam Investors
Recently, there has been rise in investment fraud through the EB-5 Immigrant Investor Program. The EB-5 program, administered by the U.S. Citizenship and Immigration Services (USCIS), provides a path to legal residency for foreigners who invest directly in a U.S. business or private regional centers that promote economic development in specific areas and industries. The purpose of the EB-5 program is to stimulate the U.S. economy through job creation and capital investment by foreign investors. Lately, however, marketers have used this investment-for-visa program to defraud investors.
In a typical scheme, a company and its fundraisers will solicit EB-5 investors with the promise of high rates of return and/or U.S. residency. In some instances, the companies will even guarantee that the investments are risk-free. In realty, many of these companies act as Ponzi schemes or other illegal operations. The common SEC violations arising out of EB-5 schemes include: