As if the fraud-ridden EB-5 cash-for-visas program didn’t have enough bad publicity, now comes a couple of Chinese nationals who, according to government investigators:
- Engaged in a phony marriage scheme to obtain U.S. visas
- Embezzled $2.2 million from a grain storehouse in China (The Chinese government puts the figure at $11 million.)
- Laundered money through several foreign accounts to buy personal property and real estate
Amidst all their illicit wheeling and dealing, Shilan Zhao and Jianjun Qiao apparently did not create a single U.S. job – which is the foundational purpose for issuing EB-5 foreign-investor visas.
“One aspect of the EB-5 program that has not received much attention is its potential for abuse by kleptocrats or other fraud fugitives overseas to seek a safe harbor in the United States,” noted Ron Cheng, a former federal prosecutor who worked on the case.
Federal prosecutors, who had been trailing Qiao for six years, caught a break last month when he was extradited from Sweden, where he was living under a different name. Adding to the international intrigue, Qiao had become a citizen of the Caribbean nation of St. Kitts and Nevis.
Zhao – who resided stateside in the Seattle suburb of Newcastle, while tending other properties in Southern California and New York — pleaded guilty in 2017 to conspiring with her ex-husband to falsely claim they were still married, and lying about the source of her funds. Agreeing to forfeit her real-estate holdings, Zhao faces up to five years in prison.
The jet-setting Qiao pleaded not guilty to conspiracy to commit immigration fraud, international transport of stolen money, conspiracy to commit money laundering, and three counts of engaging in financial transactions in criminally derived property. Scheduled for trial on July 28, he could face more than 50 years in prison.
Cheng called Zhao’s and Qiao’s scheme a new twist on “immigration fraud that often makes up an integral part of kleptocratic behavior.”
“In earlier cases, the immigration fraud vehicle might have been marriage fraud, through a U.S. citizen willing to take a payment to ‘marry’ the fugitive. With EB-5 as the vehicle, the difficulty of verifying the legitimate origin of the investment from overseas creates new challenges to detect the fraud.”
Looks like the fraud detectors landed a big one here.