- USCIS and the SEC Combat Immigrant Investor Fraud
- October 7, 2013
- Law Firm: Fragomen Del Rey Bernsen Loewy LLP - New York Office
USCIS and the U.S. Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy have jointly issued an alert to warn of fraudulent investment scams targeting foreign nationals who seek to become permanent lawful U.S. residents through the EB-5 program.
Although both agencies already coordinate on issues at the case-specific and programmatic levels to foster EB-5 program integrity, they have also taken emergency enforcement action to stop allegedly fraudulent securities offerings made through the program. Therefore, an increase in enforcement efforts and greater scrutiny on regional center applications are expected.
The agencies uncovered attempts by scammers to misuse the program through regional centers as a means to carry out fraudulent securities offerings. In one instance, a business that started soliciting investors before USCIS designated it as a regional center. The business falsely promised investors a 5 percent return on their investment and an opportunity to obtain an EB-5 visa; principals of the business allegedly also misused investor funds for personal use.
The agencies have advised potential investors to take precautionary steps and to conduct thorough research to avoid investing in fraudulent securities offerings.
Organizations submitting regional center applications should be prepared for greater scrutiny and longer processing times as a result.