Report: Surge in Chinese investment overwhelms US regulators and raises risks of fraud
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Chinese investors seeking green cards to live in America run the risk of being defrauded under a loosely regulated visa program, according to a report Thursday from a federal watchdog.
The U.S.-China Economic and Security Review Commission raises questions about America's EB-5 visa program, which grants green cards to foreigners in return for investments of $1 million — or just $500,000 in high-unemployment or rural areas. Local government officials are supposed to vet the investors and their projects before visa applications are approved.
"The program has been flooded by Chinese applicants," the report found. "Instances of fraud and lax regulation have cast doubt on the ability of local authorities to screen Chinese EB-5 investors properly."
The commission cites the case of a real estate developer indicted last year on charges of duping 290 Chinese investors into sinking money into a fraudulent $912 million hotel complex outside Chicago. In South Dakota, a state official committed suicide in 2013 after coming under investigation for mismanaging Chinese and South Korean EB-5 investment funds connected to a failed beef-packing plant.