# Is your EB-5 investment a scam? - Link: https://www.lumlawgroup.com/is-your-eb-5-investment-a-scam/ - Published: 2018-04-13T08:20:55-07:00 - Author: Albert J Lum The [U.S. EB-5 Immigrant Investment Program](https://www.uscis.gov/eb-5) offers foreign investors and entrepreneurs permanent residence (a green card) in exchange for an investment of $1 million (or $500,000 for targeted employment areas) and job creation.  Over the years, EB-5 investment has virtually guaranteed its investors citizenship, even if it cannot guarantee a return on its high-risk investment.  However, recent years have revealed that many EB-5 marketing agencies, [EB-5 regional centers](https://lumlawgroup.com/Staging/what-is-an-eb-5-regional-center/), and EB-5 projects were nothing but utopian pyramid and ponzi schemes. #### If you didn’t know about the warning… Every year, the US releases 10,000 visas to EB-5 immigrant investors, but it wasn’t till 2013 that all 10,000 visas were claimed.  Since then, the [government has released an official warning](https://www.sec.gov/oiea/investor-alerts-bulletins/investor-alerts-ia_immigranthtm.html) to investors regarding the prevalence of EB-5 fraud.  In the warning, the US Securities& Exchange Commission (SEC) reveals a few warning signs investors should steer clear of: * guarantees of a visa, green card, or citizenship * guarantees of a return on investment (5% in _[SEC v. Marco A. Ramirez, et al.](http://www.sec.gov/News/PressRelease/Detail/PressRelease/1370539854731)_) * promises of “no risk” investment * proof of **overly consistent** returns on investment * agencies that promote a business before USCIS has designated it as a Regional Center * promises to refund Regional Center administrative fees if the EB-5 visas are denied ([SEC v. A Chicago Convention Center, et al.](http://www.sec.gov/litigation/litreleases/2013/lr22615.htm)) * unregistered investments * unlicensed sellers * many companies run by a handful of people #### If you’re curious about past cases of fraud… Other well-known EB-5 fraud cases include: * [USA v. Jennifer Yang, Daniel Wu](https://www.courtlistener.com/docket/6215436/united-states-v-yang/)– Californian (norcal) couple raised $4 million between 2009 and 2016 through the EB-5 visa program by defrauding the gov’t with fake reports, fake employees, etc. * [Edward Chen, Jean Chen](https://www.sec.gov/litigation/litreleases/2017/lr23944.htm)– Californian Chinese-American couple raised $22.5 million through Chinese EB-5 investors and stole more than $12 million, misappropriating more than 91 percent of the investors’ funds, and defrauding the gov’t by issuing leases with fake information. * [Victoria Chan, California Investment Immigration Fund](https://www.justice.gov/usao-cdca/pr/attorney-pleads-guilty-federal-charges-stemming-50-million-scheme-defrauded-eb-5-visa)– South El Monte-based father-daughter duo raised over $50 million from Chinese investors by submitting over 130 fraudulent EB-5 applications. * [Jay Peak, Inc.](https://www.sec.gov/news/pressrelease/2016-69.html) – A ski resort company raised $360 million between 2006 and 2016 for various construction projects that were not realized. * [Xin “Lisa” Wang, Charles C. Liu](https://www.sec.gov/litigation/litreleases/2016/lr23556.htm)– Raised $27 million to build a proton-beam cancer treatment center, but 18 months later it was discovered the funds had just been divided among the agents (Los Angeles, 2016). * [Emilio Francisco](https://www.sec.gov/litigation/litreleases/2016/lr23712.htm), PDC Capital – Californian (OC) Attorney collected $72 million from investors to fund various projects from coffee shops to assisted living facilities only to divert at least $9.6 million for his personal use. * [Steve Qi](http://ilw.com/immigrationdaily/news/2017,1218-SECvSteveQi.pdf) – Alhambra-based attorney sued for pocketing money from both investors and regional centers while fraudulently promoting EB-5 projects based on personal gain. * [Anshoo Sethi, A Chicago Convention Center LLC](https://www.justice.gov/usao-ndil/pr/hotel-developer-sentenced-three-years-prison-exploiting-us-visa-program)– Chicago-based attorney raised over $158 million through over 290 Chinese investors for a hotel project that never took off. #### If you’re looking to invest… The SEC also offers helpful tips as to how to avoid EB-5 fraud: * Confirm a Regional Center is on the [official list](https://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/immigrant-investor-regional-centers) * Ask the Regional Center for official USCIS documents, such as the form [I-924](https://www.uscis.gov/i-924), and [I-924A](https://www.uscis.gov/i-924a) * Ask for a copy of the written investment memorandum * Ask if the agents/promoters are being paid * Hire a third-party to verify the investment * Weight the risk by reviewing the loan documents * Confirm if the developers have also invested in the project * Confirm a regional center can operate in your geographic location #### If you’re worried… If you have reason to believe an EB-5 investment project is a scam, or a Regional Center, agent, or seller is suspicious, you can [report their activities to the SEC here](http://www.sec.gov/complaint/select.shtml.). The SEC typically offers a monetary award to successful whistle-blowers. Scams can also be reported through [Immigration](https://www.uscis.gov/working-united-states/permanent-workers/employment-based-immigration-fifth-preference-eb-5/eb-5-regional-center-compliance-reviews)( USCIS) or the [Federal Trade Commission](https://www.ftccomplaintassistant.gov/GettingStarted?OrgCode=USCISCREO&NextQID=261#crnt)( FTC). #### If you’ve already invested… The attorneys at Lum Law Group has experienced business litigators with traditional EB-5 and class-action law suit experience.  If you believe your investment qualifies as EB-5 fraud, [we can help you](https://lumlawgroup.com/Staging/contactus). In the end, EB-5 is nothing more than a business contract.