Warning Signs of fraud or dishonesty in your EB-5 process

  • Promises of a visa or becoming a lawful permanent resident. Investing through the EB-5 program makes you eligible to apply for an EB-5 visa, but there is no guarantee that USCIS will grant you a conditional visa. Guarantees of the receipt or timing of a visa or green card are warning signs of fraud.

  • Guaranteed Investment Returns or No Investment Risk. By law, money invested through the EB-5 program must be at-risk. If the Regional Center promises or guarantees that you will get an investment return, then be suspicious.
  • Overly Consistent High Investment Returns. Be suspicious of an investment that claims to provide or continues to generate high rates of return regardless of market conditions.

There are 900+ Regional Centers currently registered with the USCIS, not all of them have projects and quite a few have no clue about the EB-5 process and the rules & regulations as stipulated by the USCIS. In fact the USCIS website categorically states:

USCIS approval of an EB-5 regional center application does not in any way:

  • Constitute USCIS endorsement of the activities of that regional center;
  • Guarantee compliance with U.S. securities laws; or
  • Minimize or eliminate risk to the investor.

Potential investors are encouraged to seek professional advice when making any investment decisions.

So how would a potential investor safeguard himself? Be curious, ask a lot of questions, do some digging around. Google the Regional center & project principals names, review their professional experience and background.

Definitely do these things:

  • Read the private placement memorandum (PPM), a legal document provided to prospective investors when selling stock or another security in a business. The PPM is the document that discloses everything the investor needs to know to make an informed investment decision prior to investing in a Offering. Unlike a Business Plan, the PPM details the investment opportunity, disclaims legal liabilities and explains the risk of losses.The PPM is important because it provides the investor with all of the required information they will need to make an investment decision and includes the actual documentation to effect the investment transaction. PPMs are designed as a stand-alone document – meaning that there need not be other information presented to the investor for them to make an accurate investment decision.
  • Once you have read the PPM, you should have an understanding of the following:
  • Breakdown of the fees, specifics on the return of investment.
  • The jobs cushion the project provides.
  • Evaluate the reasonableness of the data inputs, including whether or not 3rd party feasibility / market studies were conducted.
  • Your funds Escrow mechanism.
  • The reasonableness of the project timeline.

On top of these, the Regional center history & track record needs to be examined carefully. Ask for:

  • When was your Regional Center approved?
  • How many investors have had their I-526s approved under your Regional Center, and under the project currently offered for investment?
  • Has the Regional Center ever had an I-526 petition denied or withdrawn?
  • When will the Regional Center provide information to support the I-526 petition?

It’s a tedious process, but considering the investment and the green card, it is a necessary step required before making a decision.

We can help!

Wouldn’t you be making a more informed decision, if you have someone who has done it before on your side? We have successfully guided our clients through many EB-5 Projects because of our years of experience in the EB-5 industry. Get in touch with us.





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