Friday, January 22, 2016

Will thousands of EB-5 visa investors be affected due to SEC's decision to prioritize investigation of regional centers for due diligence, disclosure, and suitability?

It looks like the SEC's decision (see link to include examination of regional center offered securities may end up causing thousands of securities transactions to be reversed due to fraud and violation of securities laws.

The SEC's Office of Compliance Inspections and Examinations (OCIE) has named EB-5 in its list of Examination Priorities for 2016. The OCIE's goal states that “We will review private placements, including offerings involving Regulation D of the Securities Act of 1933 or the Immigrant Investor Program (“EB-5 Program”) to evaluate whether legal requirements are being met in the areas of due diligence, disclosure, and suitability.”

In plain words, a lot of regional centers may see their transactions voided for failure to comply with securities laws, such as a failure to disclose material facts, failure to lawfully offer and sell securities, etc.
It is a well known fact that there is not even ONE regional center whose CEO and CFO are willing to offer sworn affidavits confirming that they have and will continue to:

1) NEVER Violate securities laws while offering and / or selling securities.
2) Fully and completely disclose of all material facts.
3) NEVER engage in conflict of interest.
4) Offer FEE refunds in case a client is denied due to negligence or incompetence of the regional center's management.

In sharp contrast to regional centers, our firm does offer the above guarantees to our clients, which is why NONE of our clients have suffered. If a Regional center's executives refuse to offer these guarantees, then obviously they are NOT offering a safe investment.

In MOST regional center investments, capital loss is quite common as regional centers usually engage in conflict of interest, due to which the EB-5 visa investors usually suffer operating losses and capital losses.

A VERY high percentage of EB-5 visa investors do NOT get their permanent green cards when applying through regional centers, while Direct Investments offer a significantly better rate.

EB-5 visa investors should remember and understand that Genuine Direct investment businesses are the ONLY safe option for EB-5 visa investors in every single respect as it is extremely rare, if not impossible, to find a regional center that doesn't violate securities laws, commits securities fraud and engages in conflict of interest at the expense of EB-5 visa investors. 

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 and manage their business, usually earn annual ROI of 15% to 40%, while EB-5 visa investors 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 apply for a green card under the EB-1C visa category, because 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) 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 $360,000 investment in EB-1C visa category.

2) 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.

3)  The job creation requirements are a lot more onerous in EB-5 visa, and I've seen that creating even 6 jobs suffices for an EB-1C visa.

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

5) The time to get a permanent green card under EB-1 visa program ranges from 1-2 years, whereas it takes about 5 years or more 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 and a guarantee of freedom from fraud, while our competitors usually don't offer such guarantees.

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

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