USCIS updated its online list of terminated EB-5 regional centers on October 22, 2015. In the coming two months, regional centers are required to comply with the requirement to file their Forms I-924A in order to update USCIS on relevant job creating activity over the past year. We expect that USCIS will terminate more regional centers in the next six months where there are credibility issues over data supplied by regional centers in these filings, or where regional centers simply fail to update the agency through filing a Form I-924A. It would be fully within the realm of reasonable expectations to see at least 100 or more terminations initiated within the coming year. As USCIS uses more resources to tighten up administration of the EB-5 regional center program, and with lawmakers looking closely at the program, dormant or non-compliant regional centers may find their designations revoked. Continue Reading Don’t End Up on a USCIS List of Terminated EB-5 Regional Centers: Be Creative and on Time with your I-924A Filing

Private placement offerings are an increasingly active part of the securities business. One especially complicated and emerging area of private placements is the EB-5 Investor Visa Regional Center Program. Under the current rules of the program, an investor interested in a U.S. green card may place $500,000 or $1 million into an at-risk investment, issued by or affiliated with a United States Citizenship and Immigration Services (USCIS) designated regional center. Under current law, the per investor minimum for participation in the EB-5 Program is $500,000 for an investment in a new commercial enterprise capitalizing or facilitating a project based in a rural area or in a specific geographic location of high unemployment known as a “Targeted Employment Area” (TEA). This is a downward adjustment from the $1 million that is required in any area outside a TEA. See Immigration and Nationality Act (INA), Section 203(b)(5)(B).  If job creation requirements are met as anticipated in the investment deal, an investor will be eventually eligible to secure lawful permanent residence in the U.S. Continue Reading EB-5 Due Diligence Matters: Industry at Point of Inflection Regarding Securities Compliance

Last month, the United States District Court in the Eastern District of Pennsylvania (Philadelphia) ordered a default judgment against an interest in a limited partnership connected with an EB-5 investment. This otherwise obscure judgment is a reminder that USCIS designated Regional Centers have to exercise due care in verifying that only lawfully sourced funds are channeled into investments they manage.  Inglorious fraudsters may always be able to slip through the cracks. But we have some practical tips for Regional Centers wishing to avoid such investors and their unlawfully acquired funds.

Background: Proceeds from Dad’s “Secret Fund” go into an EB-5 investment 

Here is an overview of the facts of the case at 15,000 feet.

On February 18, 2015, the Criminal Division of the United States Department of Justice (DOJ) brought a Forfeiture in Rem action against an EB-5 limited partnership interest. The basis for the complaint was that an EB-5 investor, who also happened to be the daughter-in-law of former President Chun Doo-hwan (President Chun) of Korea, had made an investment into a Regional Center project with funds traceable to corruption proceeds. Specifically, the President’s son J.Y. Chun had liquidated a portion of bearer bonds that he owned and which were ultimately traceable to his dad’s “Secret Fund.” He and his wife used those funds to purchase an interest in an EB-5 limited partnership. The issue came to light through an effort on the part of the U.S. and Korean law enforcement authorities to locate assets of President Chun Doo-hwan.

Top hashtags for dad’s “Secret Fund”: Bribery, Corruption, Money Laundering and Concealment. Continue Reading Inglorious Fraudsters: Unlawfully sourced funds can taint EB-5 investments and result in forfeiture actions