Wednesday, April 1, 2015

Upcoming media coverage about massive securities law violations and securities fraud committed by regional centers is expected to sink HR 616 (resulting in removal of regional centers from the EB-5 visa program).

It is common knowledge that regional centers usually violate securities laws overseas in countries such as China, India, Russia, Ukraine, UAE, etc. AND commit securities fraud by failing to disclose material facts to investors.

It is believed that as a follow up to the corruption scandals about Alejandro Mayorkas helping the Clintons, Terry McAuliffe and Harry Reid fraudulently obtain EB-5 visas, we may soon see several news reports that instead of mere cronyism, Mr. Mayorkas actually aided and abetted visa fraud by helping his friends fraudulently obtain EB-5 visas for investors who were statutorily ineligible to obtain EB-5 visas. It is also believed that we may soon end up reading news reports detailing how regional centers and firms such as SLS Casino and GreenTech Automotive violated securities laws in China by illegally offering and selling hundreds of millions of dollars worth of securities without first obtaining permission from CSRC to do so. There is also the matter of regional centers making illegal commission payments, but that is a minor issue compared to the securities fraud, visa fraud and securities law violations committed by regional centers, and that is a massive scandal that will sink the political career of Hillary Clinton in the same way it has already damaged the careers of Harry Reid, Alejandro Mayorkas, Terry McAuliffe, Hailey Barbour etc.

The other issue that will further end up causing more damage to the regional center industry is the fact that the GAO audit is expected to release highly damaging information that will make it harder for politicians to support the regional center renewal bill this year than it was last year.

The final and biggest reason why regional centers are expected to be kicked out of the EB-5 visa program is the fact that not only was ICE-HSI actively recommending that regional centers be removed from the EB-5 visa program (see memo at ), but now even investigators from other agencies such as DHS - OIG, USCIS - FDNS, SEC, DoS, IRS - CID and FBI are recommending that regional centers be shut down.

As a matter of fact, I can state with confidence that till today, not even one single regional center has legally offered or sold securities in China, India, Korea, Taiwan, Singapore, Russia, Mexico and UAE, and the reason I can do so is because I checked with their regulators that a) American companies including regional centers need approval before marketing or selling securities there, b) they do not have any records indicating that any regional center has sought or obtained approval to market and sell securities in their jurisdictions.

The legislative impact of this scandal is that the bill to extend the regional center program is dead in the water as it has become a political hot potato, and IIUSA + Greenberg Traurig will again fail to get it passed this year as they failed to get it passed last year. (see the independent bill tracker

The full DHS OIG report is available for review at OIG EB-5 Report March 2015.pdf and EB-5 visa investors can read it to understand that due to the fact that all USCIS employees are actively opposing the extension of the regional center program, and are joined by ICE - HSI, DHS OIG, SEC, IRS - CID, etc., the practical chances for the extension of the regional center program are zero percent and the theoretical chances for the extension of the regional center program are 1%

You can read the DHS OIG report on regional centers at

SEC has also advised EB-5 visa investors to avoid regional centers due to the fact that securities fraud is quite common in the regional center program. See the SEC memo at

In practical terms, this means that those EB-5 visa investors whose petitions were not approved by September 2015 may probably have to re-apply under the Direct Investment Program, and this will significantly help boost the EB-5 visa program by eliminating the fraud and conflict of interest seen in the regional center program. It would also help increase actual employment in the US as opposed to the hypothetical numbers seen in the "indirect employment" model given to regional centers.

The upcoming EB-5 visa stakeholder's conference is expected to show a continuing trend of growing backlog of petitions, very long approval times and increased denial rates for regional center affiliated EB-5 visa petitions as DHS, IRS, ICE, SEC and FBI continue to crack down.
Since 2012, ICE has officially recommended banning regional centers from the EB-5 visa program and actually said "there can be no safeguards that can be put in place that will ensure the integrity of the regional center model." See link at

EB-5 visa investors need to remember that the ONLY safe way to get approved is through Genuine Direct Investment Businesses.

Here are some of the critical reasons that EB-5 visa investors should ALWAYS choose Genuine Direct Investment Businesses and avoid regional centers:
·         In a Genuine Direct Investment Business, it is quite unusual to encounter fraud or conflict of interest. This alone is THE biggest reason why EB-5 visa investors usually experience capital loss if they opt for regional centers or unsafe Direct Investments (such as Voodoo or Marcos Pizza), while those who opt for Genuine Direct Investment Businesses usually NEVER experience capital loss.
·         EB-5 visa investors who choose Genuine Direct Investment Businesses usually earn annual ROI of 15% to 40%, while those who select regional centers usually earn 0-2% annual ROI.
Genuine Direct Investment Businesses offer easy exit strategies to EB-5 visa investors while those who invest in regional centers experience TERRIBLE exit strategies. 
·         Regional Centers usually commit securities fraud and securities law violations while this is usually unheard of in Genuine Direct Investment Businesses. 
·         EB-5 visa investors usually get capital gains if they invest in a Genuine Direct Investment Business and almost NEVER get capital gains if they invest in a regional center. 
·         EB-5 visa investors in Genuine Direct Investment Businesses usually see faster processing and approval of their petitions, while it takes much longer for EB-5 visa investors to get their immigrant visa through regional centers. 
·         EB-5 visa investors in Genuine Direct Investment Businesses have a higher chance of getting their permanent green card, while those who opt for regional centers have a lower chance of getting their green card. 

If you are a business owner or high net worth individual interested in migrating to the US using EB-5 visa or L1A + EB-1C visa, please contact us for a free consultation. We offer a turnkey solution and have a 100% fee refund guarantee if a client is denied due to our fault.

Mohammed Shaikh, MBA (Accounting), CFE, Licensed Business & RE Broker (CA & FL)
Online Phone: +1 407 535 0616

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