America’s cash-for-visas program known as EB-5 isn’t faring well these days.
Though exempt from President Donald Trump’s COVID-related restrictions, EB-5 regional centers that collect immigrant investment money for job-creating ventures and green cards continue a steady decline.
The total number of centers, operated by U.S.-resident middlemen, has fallen from 880 in 2018 to 685 today. U.S. Citizenship and Immigration Services (USCIS), which oversees the program, has terminated 519 centers for non-performance or other reasons.
Those other reasons include legal problems. Currently, 143 EB-5 centers are mired in litigation, with most cases brought against them by investors who claim they have been cheated. USCIS is a co-defendant in some of the lawsuits.
For 25 years, the EB-5 program has granted U.S. green cards to foreign nationals who invested in USCIS-approved regional centers that fund real-estate projects and various supposed job-creating ventures.
Some of EB-5’s diminished numbers may owe to the government finally increasing foreigners’ minimum investment requirement from $500,000 to $900,000 last November. The ongoing economic slowdown caused by the coronavirus pandemic hasn’t helped. But EB-5’s difficulties began before any of that.
Just as likely, the steady drumbeat of criticism and bad publicity has scared off investors. The latest EB-5 corruption case won’t rekindle interest or inspire confidence.
Last month, an EB-5 operator pleaded guilty to defrauding investors through a biotech venture at Jay Peak Resort in Vermont. From 2012 to 2016, AnC Vermont raised $85 million, plus $8 million in “administrative fees,” from 169 foreign investors. Yet the promised jobs, a condition for USCIS approval, never materialized.
Admitting to wire fraud conspiracy and using investor funds for personal use, including a $6 million payment to the IRS, Ariel Quiros received a 98-month prison sentence. One of Quiros’ partners, Jong Keon Choi, under investigation for financial crimes in Korea, remains at large.
USCIS has not said whether it will revoke or withhold the green cards of investors caught up in Quiros’ scheme, but the agency has done so in other cases – one of which involved another Quiros operation at Jay Peak.
If the EB-5 cash-for-visas spiel appears too good to be true, it may well be. So it seems where Mr. Quiros is involved.
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