Sunday, May 5, 2013

Avoiding EB-5 visa fraud: Why is a Direct Investment Business a better option than regional centers for EB-5 visa investors?

Direct Investment Business refers to businesses owned and controlled 100% by a single EB-5 visa seeker. Partnerships do NOT count as Direct Investment Businesses in the true sense of the word, and are just regional centers in disguise, and should be avoided like the plague by EB-5 visa seekers, as they usually result in unfavourable outcomes for EB-5 visa investors.

This is an objective comparison demonstrating the reasons why Direct Investment Businesses are a significantly safer and better option for EB-5 visa seekers:

1. Processing times: EB-5 visa petitions in Direct Investment Businesses are usually approved in less than half the time taken for approval of an EB-5 visa petition in a regional center. This can be easily verified by following the posts in online forums or even filing a FOIA request with USCIS.

2. Exit Strategies: EB-5 visa seekers have an easy exit strategy with Direct Investment Businesses as they own and control the business from day one, and can sell their business upon approval of their I-829 if they choose to do so. In contrast, regional centers lock up EB-5 visa investor’s funds for 5-9 years.

3. Approval rates: regional centers have a low overall approval rate, and due to ongoing federal investigations into their criminal activities, they are expected to see even higher rates of denial. In contrast, Direct Investment Businesses have higher approval rates, and as a matter of fact, all of my clients have been approved since 2004.

4. Fraud: Partnerships and regional centers usually commit securities fraud by failing to disclose material facts and violate securities laws by illegally marketing and selling securities in the US and abroad. In contrast, this problem is usually not encountered in Direct Investment Businesses.

5. Conflict of interest: Partnerships and regional centers usually engage in conflict of interest by obtaining goods and services from related parties at inflated prices instead of procuring them in a competitive fashion, as well as by hiring related parties such as friends and families at inflated salaries instead of competitively hiring qualified employees at market rates.

6. Return on Equity: Those who invest in regional centers usually don’t get annual dividends (ROE), and some investors do get 1% annual dividend (ROE). In contrast, it is quite common for an EB-5 visa investor to get annual dividends in excess of 22% if they invest in good businesses such as fast food (for e.g. Subway, KFC, 5 Guys, Baja Fresh, Cici’s Pizza, etc.) or Auto Parts Stores or Family entertainment centers, etc. In dollar terms, a $500,000 investment usually yields annual ROE of $5000 at most to those who opt for regional centers, while the same investment usually usually yields annual ROE in excess of $110,000 when invested in a Direct Investment Business with the guidance and advice of an experienced Business Broker.

7. Capital Loss: It is highly likely that EB-5 visa seekers who invest in a regional center will experience capital loss, and it is quite unlikely that those who invest in a Direct Investment Business will experience a capital loss.

8. Fee refund guarantee: We offer an unconditional fee refund guarantee if our client’s petition is denied due to our fault, while regional centers and partnerships refuse to offer this guarantee.

If you’d like to get your EB-5 visa in a safe, expedited and usually profitable manner, please visit our website for further details.

You may also contact us by email at info at or by phone at 407 535 0616.

Yours truly
Mohammed Shaikh, MBA, CFE, Licensed Business & RE Broker (CA & FL)

No comments:

Post a Comment