Wednesday, January 22, 2014

Should an EB-5 visa investor's funds be used to enrich the EB-5 visa investor or should they be used to enrich someone with a not so great business?

I read a press release that seems to have been jointly put out by 4 individuals, who I do not consider very trustworthy in the EB-5 services marketplace: Bernard "Bernie" Wolfsdorf, Brian " the BS'er" Su, Michael Homeier and Kevin Wright. Of these, I can honestly say that I would not trust Brian Su or Bernie Wolfsdorf even 1 bit, and now that the regional center spigot has dried up, it seems that these guys want to start ripping off the EB-5 visa investors who wish to choose Direct Investments. The word sleazy comes to mind when I think of at least 2 of these gentlemen.

Mr. Wolfsdorf seems to think that EB-5 visa should be used by third rate businessmen as a source of cheap venture capital or to get cheap financing at the expense of the EB-5 visa investor (see link ). This basically helps continue the legacy regional center model, where the EB-5 visa investor gets very low or no returns on their investment and the only party benefiting from the transaction is a US business that is so bad that they can't raise funds from banks or venture capitalists.

Question is, why should EB-5 visa investors let others get rich off their money? Aren't EB-5 visa investors entitled to earn off their money? Shouldn't EB-5 visa investors have the right to get their green cards quickly and safely and earn a decent profit along the way?

I personally believe that EB-5 visa investors deserve to earn a decent return on their investment and also get their green card under EB-5 visa category quickly and safely.

In the US, venture capitalists and banks are always ready to fund viable businesses with decent business plans, while they certainly aren't ready to fund businesses with terrible business plans. Usually, it is these lackluster businesses that try to get EB-5 visa investor's funds through regional centers.

Reading the article, it seems that Mr. Wolfsdorf thinks that "It (EB-5 visa program) connects wealthy overseas investors who want a green card with regional business owners who need money to grow and expand". Sorry to burst your bubble sir, but the fact is, the Direct Investment category is used to help EB-5 visa investors get their green card quickly, safely and (usually) profitably. There is no place in the EB-5 visa program for regional centers or for that matter, any business where there is a lack of accountability, transparency and profitability. Mr. Wolfsdorf seems to be shy about mentioning the fact that for a very long time, he helped and advised regional centers that ILLEGALLY offered and sold securities in a fraudulent manner to EB-5 visa investors, most of whom failed to get their permanent green cards. Right now, he seems to be desperate for business, which is why, like the proverbial rat, he seems to be deserting the sinking ship of regional centers and heading for the greener pastures of Direct Investment.

In the same article, the notorious Brian Su states,“More investors are finally realizing that there is opportunity with direct investment." Well Mr. Su, why don't you tell people about your affiliation with scandal ridden regional centers such as GCFM (of GreenTech fame) and South Dakota Regional Center, to name just 2 of many? Why doesn't Mr. Brian Su tell EB-5 visa investors about the hundred plus EB-5 visa investors who not only lost all or part of their capital by investing in the fraudulent regional centers that Mr. Su helped market, but also failed to get their permanent green card. Mr. Su says, “They’re not looking for tremendous returns,” Su said. “They’re just looking for legal residency through the EB5 program.” Well, MY EB-5 visa investors are not even interested in mediocre returns, and I personally refuse to even contemplate advising them to opt for businesses where they don't have a realistic chance to earn 10% annually under managed Direct Investment Business or over 20% annually in an EB-5 visa investor managed business.

EB-5 visa investors should ask the above named individuals, as well as any other EB-5 service provider who wishes to provide Direct Investment related advice or services, the following important questions and insist on getting the answers in writing in order to quickly weed out the frauds and crooks:

1) Will you be owing me a fiduciary duty if I signed up with you? If the answer is NO, then avoid them.

2) How many years of experience do you actually have with Direct Investments and how many EB-5 visa investors have you actually helped under the Direct Investment Category?

3) In the past, have you sold or marketed regional center securities to EB-5 visa investors? If the answer is YES, please avoid that individual, as it is quite likely that they have committed securities fraud and money laundering.

4) Are you willing to offer a written guarantee of full disclosure of material facts and freedom from conflict of interest?

5) Are you willing to offer a fee refund guarantee in case my case is denied due to your negligence or incompetence?

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)
Phone: +1 407 535 0616

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