Monday, March 30, 2015

What was the REAL (and still undisclosed) scandal in the EB-5 visa story involving Harry Reid, Alejandro Mayorkas and the Clintons?

It looks like the media have missed the real scandal. The real scandal is that both the SLS Casino (whose cause was advocated by Harry Reid) and GCFM & GreenTech Automotive (advocated by Tony Rodham, Terry McAuliffe and Bill Clinton) illegally offered and sold securities worth a total of over $300 Million in China and received laundered funds. 

Their investors were statutorily ineligible to receive EB-5 visas as they could not fully document their source of funds, and Mayorkas intervened to illegally help SLS Casino and GCFM (as well as GreenTech Automotive) fraudulently obtain hundreds of EB-5 visas as they would otherwise have had to return the funds upon denial of the petitions. DHS OIG investigators are welcome to team up with IRS CID and ICE HSI investigators to confirm that over 90% of the EB-5 visa recipients in SLS Casinos and GCFM were ineligible as their funds were a) laundered (which in and of itself is a felony in China and USA), b) undocumented, as these funds were the proceeds of crimes such as intellectual property theft, corruption, drug and human trafficking, prostitution, illegal gambling, etc.

Even the fact that SLS Casinos and GCFM failed to disclose to their investors that they were illegally offering and selling securities in China (without the required approval from CSRC) is itself a clear act of securities fraud. The visa fraud was only committed in furtherance of a conspiracy to commit securities fraud, money laundering and securities law violations. Has anyone in the Justice Department heard of RICO?

The money laundering is easily proved because most of the SLS and GCFM investors were Chinese, and Chinese law requires that a Chinese citizen can only remit USD 50,000 abroad each year, and anything in excess of that needs prior governmental approval from SAFE. Instead of obtaining approval from SAFE, their investors laundered funds by having straw men send the funds abroad on their behalf in order to circumvent China's foreign exchange regulations as well as to avoid disclosing their illicit wealth to the government, as doing so would attract criminal charges. Even if DHS ignores the money laundering, there is still the issue that over 300 investors fraudulently obtained EB-5 visas for which they were statutorily ineligible due to the fact that they did not have adequate source of funds documentation.

This is one of the reasons ICE has recommended that regional centers be removed from the EB-5 visa program, and is a great example why H.R. 616 should be opposed by everyone.

Mohammed Shaikh, MBA (Accounting), Certified Fraud Examiner, Licensed Business & RE Broker (CA & FL)
Phone: 407 535 0616

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