The U.S. Securities and Exchange Commission (SEC) and U.S. Citizenship and Immigration Services (USCIS) have jointly issued an Investor Alert to warn individual investors about investment scams that target foreign nationals who seek to become permanent lawful residents through the EB-5 Immigrant Investor Program.
The alert cautions investors that designation of a business as a regional center by USCIS does not mean that USCIS, the SEC, or any other government agency has approved the investments offered by the business, or has expressed a view on the quality of the investment and advises investors to research thoroughly any offering that purports to be affiliated with EB-5 Green Card program.
The alert refers to a recent case in which the promoters allegedly started soliciting investors before USCIS had designated the business as a regional center (USA Now Regional Center) and misused investor funds for personal use such as buying luxury cars. Investors did not obtain even conditional visas as a result of their investments through the regional center.
Some of the steps the alert advises investors to take to protect their investments include:
The alert advises investors to carefully vet any EB-5 offering before investing because if the investment through EB-5 turns out to be in a fraudulent securities offering, investors may lose both their money and path to lawful permanent residency in the United States.
- Confirming that the regional center has been designated by USCIS
- Obtaining and verifying copies of documents provided to USCIS – Copies of Form I-924 and Form I-924As and supporting documentation provided to USCIS
- Requesting investment information in writing
- Asking if promoters are being paid and considering the developer’s incentives
- Looking for warning signs of fraud like promises of a visa or Green Card; guaranteed returns or overly consistent high returns; claims of no risk investment; Unregistered investments or Unlicensed sellers