Wednesday, November 18, 2015

Should EB-5 visa investors trust self-proclaimed Due Diligence "experts" who fail to properly advise EB-5 visa investors?

It seems that several self-proclaimed due diligence "experts" are deliberately complicit in aiding and abetting the act of defrauding EB-5 visa investors.

In the US, failure to disclose material facts while offering / selling securities to an investor is known as securities fraud. Pretty much every single Regional center has committed securities fraud by failing to disclose some (or all) of the following facts to EB-5 visa investors:

1) Regional Centers, as well as risky (and usually fraudulent) direct offerings such as E3 Investment Group (run by Matthew Gordon AKA Matt Gordon), Twistee Treat, Marcos Pizza offerings by Brian Hall, Voodoo BBQ offered by Fred Burgess & Joe Sloboda, etc., usually have significant conflict of interest built into their offerings. A failure to clearly disclose this material fact constitutes securities fraud.

2) Regional Centers usually violate securities laws by illegally offering and selling securities in the US and / or abroad. As a matter of fact, I have yet to see even ONE regional center that has offered / sold securities in a lawful manner in China, India, Russia and Mexico. A failure to disclose the ILLEGAL offering and sale of securities is clearly an instance of securities fraud in the same way the failure to clearly disclose the conflict of interest constitutes securities fraud.

3) The due diligence "experts" regularly fail to honestly disclose the fraud and conflict of interest committed by regional centers as they get repeat business from regional centers, and won't say or do anything to antagonize regional centers.

4) Regional centers and fraudulent direct investments have truly terrible exit strategies and offer meager ROI.

5) Regional Centers and fraudulent direct investments often have junk fees known as administrative fees, which are used to pay high (and usually ILLEGAL) commissions to visa / immigration agents.

6) Capital loss is commonly experienced by those who invest in regional centers and risky direct investments. As a matter of fact, over 95% of regional centers have a track record of capital losses for EB-5 visa investors.

7) Per the latest USCIS figures, less than 50% of the EB-5 visa investors who choose to invest in regional centers get their permanent green card. See link at and compare the data for I-829 approvals and look at the number of I-526 approvals for years prior to that. i.e. in 2012, over 3600 I-526 petitions were approved, but only 1600 I-829 petitions were approved in 2014, which means that there are about 2000 petitions that still haven't received approvals. Not only that, the percentage of I-829 denials are now in excess of 11%. The so-called due diligence experts also usually don't disclose that due to heightened scrutiny, the number of I-526 denials is now in excess of 12%, and is expected to significantly increase.

8) The so-called due diligence experts usually don't disclose the fact that in 2014 alone, over 60 regional centers have already been shut down.

9) So-called due diligence experts seem to be unwilling to disclose the fact that regional centers are most probably going to be shut out of the EB-5 visa program from after December 2015.

10) Regional centers seem to be unwilling to clearly disclose the fact that their promoters are like drug addicts: They are addicted to OPM (Other People's Money). It is quite simple and easy to ask the promoters just how much money are they actually contributing and how much equity are they keeping. Why is it that the promoters of regional centers invest 1-200,000 of their own money, and want to keep over 80% of the equity, whereas those who invest USD 500,000 of their own money get only 2-3% of the equity?

11) Regional Centers don't seem to be willing to disclose the fact that they not only procure goods and services from related parties at inflated prices, they also engage in rampant nepotism by hiring related individuals at inflated salaries instead of openly hiring managers and staff in a competitive manner.

EB-5 visa investors now know and understand that Genuine Direct investment businesses are the safest option for EB-5 visa investors in every single respect. 

Here are some of the critical reasons that EB-5 visa investors should ALWAYS choose Genuine Direct Investment Businesses and avoid regional centers:

  1. 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 Twistee Treats or Voodoo or Marcos Pizza), while those who opt for Genuine Direct Investment Businesses usually NEVER experience capital loss. 
  2. 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. 
  3. Genuine Direct Investment Businesses offer easy exit strategies to EB-5 visa investors while those who invest in regional centers experience TERRIBLE exit strategies. 
  4. Regional Centers usually commit securities fraud and securities law violations while this is usually unheard of in Genuine Direct Investment Businesses. 
  5. 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. 
  6. 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.  
  7. 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.
The ONLY safe, fast and usually profitable way to get an EB-5 visa is through investment in a GENUINE Direct Investment Business. An even faster and easier way to get a PERMANENT green card is to apply for the L1A visa and then the EB-1C visa.

Many immigration attorneys and so-called due diligence "experts" fail to disclose important facts to investors. One such set of facts is that it takes 3 years to get a temporary green card and an additional 30+ months to get a permanent green card in EB-5 visa category, while investors can get a permanent green card in less than 2 years with EB-1C category visas.
The advantages of EB-1C over EB-5 visas are as follows:

1) Very little chance of fraud, compared to rampant fraud seen in regional centers in the EB-5 visa program.

2) Significantly lower investment amount. In EB-5 visa, a minimum investment of $500,000 is needed, whereas I've had clients get approved with even $350,000 investment in EB-1C visa category.

3) There is total flexibility about location: EB-1C visa investors face no restrictions about location, whereas EB-5 visa investors see significant location based restrictions if they invest only $500,000, and investors have to invest minimum $1 Million to avoid location based restrictions.

4) The EB-5 visa program has onerous proof of fund requirements, whereas the fund documentation requirements are definitely not as stringent in EB-1C visa program.

5) The job creation requirements are a lot more onerous in EB-5 visa, and I've seen that creating even 4 jobs suffices for an EB-1C visa.

6) Unlike the EB-5 visa program, there is no conditional green card in EB-1C visa program.

7) The time to get a permanent green card under EB-1 visa program ranges from 1-2 years, whereas it takes almost 5 years to get a permanent green card under EB-5 visa category. Business owners & executives can immediately move to the US on L1A visa, and get their green card in hand within a matter of months, whereas EB-5 visa holders have to wait for about two years to just get a temporary green card.

Keeping the above factors in mind, most investors are now choosing to go with EB-1C visa as it is a lot cheaper, faster, safer and easier to get compared to the EB-5 visa.

If you are a business owner or high net worth individual interested in migrating to the US, please hire our team. We offer a turnkey solution and have a solid track record of success, as we believe in delivering results and not excuses to our clients. That is why we have a 100% fee refund guarantee while our competitors usually don't offer such a guarantee.

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

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