On June 16, Baruch College held an EB-5 conference concerning the fate
of the EB-5 visa program. The discussion focused on multi-million dollar
fraud cases and potential reforms and possible amendments to the program
which may occur on September 30, 2016.
EB-5 has continuously increased since 2008. Prior to 2008, investment revenue
raised through the program was close to $1 billion, however, since 2008
that number has increased to over $14 billion since 2008.
The many recent high profile fraud cases, including the investigation into
Jay Peak’s Resort, and the increasing popularity of EB-5 as a means
of alternate project financing, has provided Congress and the Securities
Exchange Commission (SEC) with a strong incentive for reform. For instance,
the panelists discussed the potential changes to the EB-5 program, including
changes in the investor’s minimum capital investment requirement
and requirements for targeted employment areas.
Similarly, Mr. Kurzban and Mr. Korpivaara of David Hirson & Partners,
LLP addressed the legal and procedural questions related to EB-5 projects,
including the securing of project funds and other sources of capital.
Kurzban mentioned that there was a current Regional Center investigation
that would soon go public that could greatly affect the EB-5 community.
Such investigations demonstrate the seriousness of SEC enforcement actions
and their desire to protect investors. This is also demonstrated by the
fact that Nicholas Colucci, who has experience in finance and investigating
fraud, was recently named the Chief of the Immigrant Investor Program.
In addition, of particular importance was Kurzban’s statement that
there are still no protections for investors if USCIS terminates a regional
center that is being investigated. He went on to explain that one of the
risks investors face is that whenever a regional center closes, the investor
loses his or her place in the line for the visa. With the current backlog
of visas, this is a situation not many investors want to risk. Also discussed
was the difficulty involved in tracing an investors’ source funds.
This is especially true for investors that come from countries that have
shadow banking, which makes it difficult for corporate attorneys to track
Nearing the end of the discussion, the consensus seemed to suggest that
any legislative reforms taken should be aimed towards alleviating some
of these problems and increasing investor protection and confidence in
the EB-5 visa program. The panelists unanimously agreed that there needs
to be an increase in EB-5 visas, especially provided that only 1% of all
visas issued annually are to EB-5 applicants. However, it was cautioned
that reapportionment of visas by country may be necessary, considering
Chinese applicants are allocated 8,000 of the 22,000 available visas.
Contact Geraci Law Firm at (949) 298-8050 today, or
contact Melissa Lucardirectly for more information.