However, as the saying goes, 'You can't teach an old dog new tricks', and it seems that you can't teach crooks addicted to OPM (Other People's Money) how to earn money honestly by helping people.
Maybe Phil Cohen should explain in his article why he believes EB-5 visa investors are dumb or unable to run their own business, because in the past 10 years, 60 EB-5 visa clients of mine have done just fine running their own business, and of them only a dozen or so had any prior experience running a business. Mr. Cohen seems to be unaware that franchisors usually TRAIN their franchisees on how to profitably run their business, as franchisors (like Real Estate Brokers), make money only when their clients make money. Mr. Cohen also seems to forget that we actually offer full support (business advisory, legal and accounting) to our clients till they get their I-829, which helps our clients have a very high chance of getting their EB-5 visa in a usually profitable and safe manner. He doesn't mention that with his deal, an EB-5 visa investor will end up getting low profits and also lose a significant chance to earn capital gains in the way my clients do.
This is the reason I advise my clients to advise partnerships and regional centers: They are great for crooks but not so great for EB-5 visa investors.
It is certainly true that several franchises are great for EB-5 visa investors, the sad truth is, most franchises are third rate and are NOT so great for EB-5 visa investors. I personally advise my clients to avoid franchises such as Marcos Pizza, Voodoo BBQ, and other similar third rate franchises, and instead refer to the list of top franchises at http://www.slideshare.net/MohammedShaikh4/2012-top200 to select only those franchises which have a strong track record. A franchise that doesn't fit in the top 100 is usually not so great to invest in.
EB-5 visa investors need to keep the following factors in mind:
My clients keep their profits and their capital too, while my competitors usually cheat EB-5 visa seekers by pocketing the profits and usually returning the capital with capital losses.
Mr. Cohen's business model seems to use the EB-5 investor's money to make Mr. Cohen and his affiliates rich at the expense of their investors, while I help my clients get their green cards and (usually) helps them earn a decent profit AND capital gains in the process.
I don't promote any particular franchise, and instead tailor a solution to best fit my client's needs. I offer a written guarantee to all my clients that I will disclose ALL material facts and will never engage in conflict of interest, and refund a client's fees if they are rejected due to my team's fault. Let's see Mr. Cohen match that guarantee. If you look at Mr. Cohen's track record, he has actually helped regional centers, and we all know how regional centers defrauded EB-5 visa investors years. I also guarantee that my client's will be in full control of their business and their funds at all times, which gives them a higher chance of earning a solid profits, while Mr. Cohen's business model takes away control from the EB-5 visa investor and instead gives the EB-5 visa investor measly returns and exposure to fraud and conflict of interest. Let's see Phil Cohen or David Tashroudian or Fred Burgess or Brian Su or Brian Hall or Joe Sloboda or other competitors offer similar guarantees to EB-5 visa investors. My competitors have facilitated, aided and abetted securities fraud and the illegal sale and offering of securities, while I've helped protect EB-5 visa investors and helped them earn solid dividends and capital gains for the past 10 years.
My clients have the following advantages:
1) Easy approval: Regional center filed petitions are stuck in limbo, while Direct Investments are easily approved as the criteria are objective and easy to quantify: invest legally obtained funds and create 10 jobs. I always make sure that I advise my clients to act in a way that helps protect their interest while complying with the law.
2) Zero conflict of interest, zero fraud and full disclosure of material facts: I am franchise neutral and only suggest business opportunities that make sense for my clients, instead of tying up with sleazy operators and taking a cut on the side. My competitors don't clearly disclose the fact that they benefit by promoting a particular franchise, and that EB-5 visa investors can get better deals and safer investments elsewhere. This is FRAUDULENT and UNETHICAL behaviour. Is Mr. Phil Cohen willing to offer similar guarantees to EB-5 visa investors?
3) Full control of funds and business: My clients are in full control of their businesses, and get to keep the full profits they make. My competitors usually offer measly profits.
4) Easy exit strategy: My clients get to decide when and if they want to sell, and usually sell their businesses for a pretty decent capital gain. I've yet to see my competitors offer such benefits since the past 10 years, and it is quite certain that Mr. Cohen's offer of partnership EB-5 visa investment does not include an easy exit strategy.
5) Fee refund guarantee: My team (including CPA's and Attorneys) work with me to offer a turnkey solution till a client's I-829 is approved, and we offer a 100% fee refund guarantee in case a client is rejected due to our fault. Our competitors usually don't offer this guarantee as they're unwilling to act professionally and responsibly.
EB-5 visa seekers should ask the following questions of regional centers and partnerships to detect and prevent fraud:
1) What is the lock in period for capital in your partnership / regional centers?
EB-5 visa investors are usually stuck for 5-9 years in partnerships & regional centers.
2) What is the mean and median annual ROI that is offered by the partnership / regional center?
EB-5 visa investors usually earn 1% or less in regional centers and partnerships and ALWAYS earn a lot less than they'd earn in Direct investment businesses.
3) Are the business founders, CFO and CEO willing to offer written guarantees of FULL disclosure of material facts on an ongoing basis as well as guarantee freedom from fraud and conflict of interest?
Avoid those who refuse to guarantee this in a notarized affidavit.
4) Are you offering and selling securities in full compliance of US and overseas securities laws?
Avoid those who refuse to confirm this in a notarized affidavit.
A simple way for EB-5 visa investors to detect & prevent fraud is to demand the following safeguards from those who offer EB-5 visa related services:
1) A written guarantee by the top 5 officers of the regional center / partnership firm AND the marketer, confirming that they will clearly disclose all material information on an ongoing basis, as failure to do so is classified as SECURITIES FRAUD.
2) A written guarantee that the marketer and regional center / partnership officers will NOT engage in conflict of interest, and will procure goods / services and hire employees in a transparent and competitive manner.
3) A written guarantee to fully refund an investor's fees in case the investor's petition is rejected due to the fault of the regional center.
4) A full disclosure of the amount of capital that the firm's founders and investors have invested and the percentage of ownership stake and profits that they will get. This helps understand the fact that crooks want a lot of valuable equity in exchange for doing simple tasks that would cost little money and require little effort.
EB-5 visa investors need to remember that the US is a great place to do business and doing business in the US is easy and straightforward for the most part, especially in the businesses we place our clients in. EB-5 visa investors do NOT NEED partners to run their business and can usually manage a business quite well with even 15-20 hours of work a week.
For further details, please visit my website and join my group on Linked In "EB-5 visa - Direct Investment Business'.
If you're an EB-5 visa seeker interested in getting an EB-5 visa in a safe and usually profitable manner, please call me on +1 407 535 0616 for a free consultation. You'll be glad you did!
Mohammed Shaikh, MBA, CFE, Licensed Business & RE Broker (CA & FL)