Thursday, January 9, 2014

Should EB-5 visa investors trust those who have a documented history of cheating EB-5 visa investors?

There is an old saying: Cheat me once, shame on you, cheat me twice, shame on me.

Nowadays, we see a lot of so-called EB-5 visa "practitioners" still peddling regional centers and also offering quite dubious Direct Investment businesses to EB-5 visa investors.

What these so-called EB-5 "practitioners" don't disclose are important facts such as:

  1. Their actual experience, i.e. how many EB-5 visa investor clients they had, how many were approved for I-526 and how many of them went on to get their I-529. 
  2. The USCIS itself recommends massive changes to the regional center programs due to fraud (see link as well as the actual DHS OIG memo expressing concerns about the fraud committed by regional centers at ), while US ICE recommends shutting down ALL regional centers due to fraud (see details at ). This shows that not one but two major US Government agencies of the DHS are worried about the fraud committed by regional centers. We should also remember that even the SEC issued their own memo about fraud committed in the EB-5 visa program by regional centers illegally and fraudulently offering securities (see link at )When at least 3 US government agencies themselves are warning about fraud being committed by regional centers in the EB-5 visa program, it is to protect EB-5 visa investors, and EB-5 visa investors should remember that the ONLY safe and quick way to get EB-5 visas are Genuine Direct Investment Businesses.
  3. The fact that those who apply for EB-5 visa through regional centers have to usually wait for 16-22 months, while those who apply for EB-5 visa through Genuine Direct Investment Business have to usually wait for only 4-7 months to get their EB-5 visa.
  4. The fact that the exit strategy in regional centers is terrible while the exit strategy in Genuine Direct Investment Businesses is very easy and straightforward.
  5. Capital gains are common in Genuine Direct Investment Businesses and Capital Losses are very common in regional centers and other Direct Partnerships.
  6. Regional Centers and Direct Partnerships usually illegally offer and sell securities.
  7. Genuine Direct Investment Businesses usually offer decent operating income that is usually sufficient to help an EB-5 visa investor support their spouse and kids quite comfortably. In regional centers and shady partnerships, it is hard to even get a 1% annual return, which is in mst cases inadequate to support an EB-5 visa investor's family.
 EB-5 visa investors need to remember that Regional Centers are the worst choice due to the fact that they usually engage in securities fraud, money laundering, conflict of interest and securities law violations, and even the ICE says (see link ) that all regional centers need to be shut down as NOTHING can be done to eliminate the fraud that pervades through regional centers.

IT IS VERY HARD TO EARN MONEY AND VERY EASY TO BURN MONEY. A Genuine Direct Investment Business is the SAFEST, FASTEST and usually most PROFITABLE way to get an EB-5 visa. 
A Genuine Direct Investment Business has the following characteristics:
It is 100% owned and controlled by the investor. This eliminates conflict of interest and significantly reduces the possibility of fraud. Even ICE, USA's biggest investigative agency says that all Regional centers usually commit fraud, conflict of interest and violations of securities laws (see ICE recommends shutting down ALL regional centers.)
It is in either a premium franchise such as Five Guys / KFC / Hertz etc. or in a solid non-franchise business such as banquet hall, used car lots, etc. If the business is a risky franchise such as Voodoo BBQ, Marcos Pizza, etc., it is unsafe. A franchise is suitable for investment only if it is on a major bank's list of approved franchises AND features in a list of top performing franchises (see ) AND is recommended by an experienced business broker who owes a fiduciary duty to the EB-5 visa investor. Most franchises are unsuitable for EB-5 visa investors due to their inability to PROFITABLY generate 10 jobs. 
It is easily saleable in the open market. For example, it is easy to quickly sell off a Five Guys or KFC Franchise in the open market, while there is no market for partnership or regional center securities, risky franchises such as Marcos Pizza / Voodoo BBQ / Twistee Treat, etc. due to which EB-5 visa investors are stuck for 5-9 years and have to PAY to sell their share. 
What are the advantages of choosing a Genuine Direct Investment Business to get the EB-5 visa?
The EB-5 visa investor gets FULL control and ownership of their business and corporate funds. This helps  eliminate conflict of interest and fraud, and results in higher earnings and capital gains.
The EB-5 visa investor usually earns 20-35% Returns annually, while regional centers offer measly returns of 1% and some partnerships are now known to offer returns of up to 5%, but have capital losses on exit.
The EB-5 visa investor usually earns solid capital gains of over 30% after 3 years, while those who invest in risky franchises, partnerships and regional centers usually end up with capital losses.
The EB-5 visa investor has an easy exit strategy and can sell their business (usually for a profit) as soon as they get their permanent green card (I-829 approval),  while risky franchises, partnerships and regional centers lock in funds for 5-9 years.
It takes about half the time to get the I-526 approval (temporary green card) using a Genuine Direct Investment Business in comparison to regional centers.
Genuine Direct investment Businesses are usually able to help the EB-5 visa investor get their I-829 approved, whereas less than half of the EB-5 visa investors who chose regional centers, partnerships and risky franchises were able to get their I-829 approved.
There is usually no conflict of interest and fraud seen in a Genuine Direct Investment Business, whereas there is usually extensive conflict of interest and fraud to be found in regional centers, partnerships and risky franchises. An excellent example is how Joe Sloboda and Fred Burgess sold Voodoo BBQ franchises to EB-5 visa investors without disclosing the fact that they were the master franchisors and earned money on the back end.
EB-5 visa investors should avoid those who refuse to guarantee the following:
1.    Full and ongoing disclosure of all material information.
2.    Freedom from fraud and conflict of interest.
3.    Full refund of your fees in case you’re rejected by USCIS.
If you're an EB-5 visa investor interested in getting their EB-5 visa quickly, please contact us. You'll be really glad that you did.
Yours truly,
Mohammed Shaikh, Licensed RE and Business Broker (CA & FL)
Phone: +1 407 535 0616 Online:  Skype: Mohammed.Shaikh

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