Thursday, January 16, 2014

Can there be smoke without fire? Why are USCIS, SEC, DHS OIG & US ICE cracking down on regional centers? What is the first question EB-5 visa investors should ask?

Today, we see a lot of fraud being perpetrated against EB-5 visa investors. There are many phony "due diligence experts" who claimed to be experts at doing due diligence studies of regional centers, when the fact is, their "due diligence" was actually quite negligent at the very least. There are many nicely marketed regional centers too that not only commit securities fraud and launder money, but also violate securities laws too. The fact is, pretty much every single regional center has violated securities laws, laundered money and committed fraud (including securities fraud). This is why, ICE (USA Government's largest investigative agency), says that all Regional centers should be shut down! (see

The first question an EB-5 visa investor should ask a prospective service provider or marketer of partnerships / regional centers / Direct Investments is: Please define your role and let me know whether you would owe ME (the EB-5 visa investor) a fiduciary duty. 

Other important questions that EB-5 visa investors need to ask everyone who offers them EB-5 visa services:

Are you willing to offer a written guarantee of freedom from fraud and conflict of interest?
Are you willing to offer a written guarantee of fee refund in case I don't get an EB-5 visa due to your fault?
Are you willing to offer a written guarantee of full compliance with laws governing your conduct in the US and abroad?

If someone says no to any of the above questions, avoid them like the plague.

If a service provider or marketer will not owe you a fiduciary duty, then do NOT trust them at all. It is no secret that there is widespread conflict of interest and fraud going on against EB-5 visa investors, whether you see the example of Joe Sloboda marketing Voodoo BBQ without clearly disclosing his interests as a master franchisor and relationship with Fred Burgess, or the fact that EB-5 visa investors can get more established (and safer) fast food franchises to invest in, when compared to Voodoo BBQ, or the example of David Tashroudian, who wanted a wrap around agreement marketing Carl's Jr. Franchises to EB-5 visa investors, taking over 11 % of the revenues as royalties going into his own pocket, while Carl's Jr. (the franchisor) itself would only 8.5%.

I do NOT get any money from any franchisor, so our advice on selecting a franchise is objective, impartial and based entirely on merits. I actually offer a written guarantee of freedom from fraud and conflict of interest, and also guarantee full disclosure of material facts, as not only is this good business practice, but by virtue of being a Licensed Real Estate and Business Broker, I'm required by law to do so. As I'm a Licensed Real Estate and Business Broker, I legally owe a fiduciary duty to my clients, which means that I ALWAYS have to place my clients interests ahead of my own.

Recently, DHS OIG also issued a report recommending significant restrictions on regional centers due to fraud, money laundering and other serious issues. USCIS had a joint conference call last year along with SEC, where they indicated significant concerns about securities law violations and fraud committed by regional centers against EB-5 visa investors. SEC also issued their own notice advising EB-5 visa investors to be cautious about dealing with regional centers due to fraud committed by regional centers and unscrupulous partnership promoters.

The fact is, most of the service providers in today's EB-5 services marketplace have aided, abetted, committed or conspired to commit conflict of interest, securities fraud, money laundering, securities law violations and other serious felonies. These range from Matt Gordon, David Tashroudian and Joe Sloboda's conflict of interest laden Direct Investment solutions offered to EB-5 visa investors, to the regional centers marketed by Brian Su and Kevin Jeffers, and the results are delayed processing, low returns, capital losses and denial of permanent green cards.

Why do regional centers offer such terrible results to EB-5 visa investors?

The answer is: Regional centers usually pay a large amount of money paid towards commissions, and also suffer from conflict of interest, where hiring and procurement of goods & services are done from related parties at inflated costs.

If a regional center promoter's first interest is stealing instead of serving their investors, then capital losses, low returns, delayed processing due to increased regulatory scrutiny, terrible exit strategies and high percentage of visa loss are inevitable.

Why do our EB-5 visa investors usually see high return on equity, capital gains, 100% approval of I-526 and I-829, quick approval and no fraud or conflict of interest?

EB-5 visa investors must remember an important fact: As licensed RE & Business Brokers, we actually owe a fiduciary duty to our clients. This means that the law requires us to always put our client's interests ahead of our own. EB-5 visa investors should ask if the service provider owes them a fiduciary duty, and strongly suspect the motives of those who don't owe them fiduciary duties.

This is why we recommend top ranked franchises instead of risky franchises such as Twistee Treat, Voodoo BBQ, Marcos Pizza, etc.
This is why we don't engage in conflict of interest or conceal material facts.
This is why we advise our clients in ways that help them get their green card (EB-5 visa) in a quick, safe and usually profitable manner, as a failure to do so will jeopardise our professional licenses.
This is why we confidently offer written guarantees of full fee refund in case our client is denied due to our fault as well as written guarantees of freedom from fraud, conflict of interest and full disclosure of material facts.

Our competitors usually don't owe a fiduciary duty to their clients and will usually refuse to offer the written guarantees that we confidently offer. We know that our team is quite competent, which is why we've no problems in offering a 100% fee refund guarantee to our clients in case our clients fail to get their EB-5 visa due to our fault. If our competitors were asked to offer the same fee refund guarantee, they usually refuse to do so as they aren't that confident about the level of their services.

Advantages of Genuine Direct Investment Business:

1. Faster processing and approval times.
2. Easy exit strategy.
3. Investors usually get a 15-35% annual Return on Equity.
4. Investors usually get Capital gains, whereas regional center investors usually get capital losses.
5. Our clients have a 100% approval rate of I-526 and I-829, which is a lot higher than regional centers or other partnerships.
6. Full control of business and capital, which helps prevent fraud, conflict of interest and losses.

For more information, please visit our website or read our blog at

If you're an EB-5 visa investor, be sure to hire our team to help you. You'll be glad you did.

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

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