I saw two articles in the last few days about EB-5 visa by Ian Scott (Is Ian Scott concealing material information from EB-5 visa investors?) & Ismael Fernandez (see Is Ismael Fernandez being entirely candid?).The articles both have something in common, namely the fact that they omitted crucial information that would make any EB-5 visa seeker avoid regional centers & partnerships like the plague. Fact is, when making a decision, EB-5 visa seekers need to be given a full disclosure of material facts, and under US law, those who aid and abet regional centers in committing securities fraud by failure to disclose material information to potential investors can arguably be termed as guilty of securities fraud themselves under the chain conspiracy model. See article at What makes one complicit in a conspiracy? There is no doubt that Mr. Scott and Mr. Hernandez have in the past sought to do business with regional centers and are seeking to do so even today, so those who suffer capital losses or are denied may have grounds to sue these two individuals in the same way they can sue Brian Su or Fred Burgess or Joe Sloboda or Kevin Jeffers or others who aid and abet regional centers in violating securities laws and committing securities fraud.
What is the material information that was omitted by Mr. Scott & Mr. Fernandez:
It is common knowledge that thousands of EB-5 visa investors have lost their green cards due to the fraudulent and / or grossly negligent conduct of regional center promoters. It is also common knowledge that EB-5 visa petitions sponsored by regional centers take about twice as long to get approved compared to Direct Investment Business based businesses. It is also common knowledge that regional centers are under investigation by multiple government agencies for fraud, and that capital loss is quite common in regional centers / partnerships / direct investments in 3rd rate franchises. It is also common knowledge that regional centers & partnerships illegally offer & sell their securities overseas, yet neither Mr. Fernandez or Mr. Scott mentioned these facts either. It is also common knowledge that regional centers have laundered BILLIONS of Dollars, and neither Mr. Scott nor Mr. Fernandez have mentioned this either.
Mr. Fernandez wrongly implies that direct investments are complicated and omits the crucial fact that a business plan isn't needed if 10 jobs are created before filing I-526. He also wrongly implies that Direct Investment Business are riskier compared to regional centers ("Higher rates of return are expected for the larger perceived risk.") This definitely leads me to believe that either he is lying or simply ignorant, and I believe it is the former and not the latter.
Similarly, Mr. Scott also neglects to point out the crucial fact that most active (owners / operators of Direct Investment Business) EB-5 visa investors are actually going Direct as it is safer, easier and faster to get their EB-5 visa when investors go direct, and in cases where the 10 jobs are created BEFORE filing the EB-5 visa, the investor doesn't even need to submit a business plan.
In order to avoid being defrauded by marketers of regional centers or partnerships or even those who peddle 3rd rate franchises, EB-5 visa seekers should keep the following information in mind:
With regional centers & partnerships, it takes longer to get approved, the ROI is low
(or none), capital losses are quite common, the exit strategy is truly shitty and the I-829 approval rate is about 42%. In contrast, our
EB-5 visa clients get approved faster, and in 10 years haven't suffered a
single rejection at either the I-526 or I-829 stage or had capital
losses or operating losses, and have always been able to exit easily.
Unlike B. Hall who peddled 3rd rate Marcos Pizza franchises or Fred Burgess & Joe Sloboda who tried to steer EB-5 visa investors into Voodoo, even though Voodoo doesn't have such a great record or reputation, we always try to place our clients in reputable franchises such as 5 Guys / KFC / Subways etc. or in solid non-franchise businesses such as used car lots, cell phone stores, etc. where it is easy to generate jobs and quite common to earn decent profits.
With
us, our client's money is invested in their own business instead of being
used to procure goods and services at inflated prices (as is common with
our competitors) or hire undeserving related parties at inflated
salaries.
EB-5 visa investors need to ask several important questions of
regional center promoters (CEO / CFO / Vice President / EVP / SVP etc.) and marketers. It is quite common for crooks to refuse to offer the following safeguards to EB-5
visa investors:
1) A written guarantee by the top 5 officers of the regional center / partnership firm AND the marketer, confirming that they will
clearly disclose all material information at the very onset and on an
ongoing basis. In the US, failure to disclose material information by
sellers of securities is classified as SECURITIES FRAUD.
2) A written guarantee that the marketer and regional center / partnership officers will NOT engage in conflict of interest, and procure goods / services in a transparent and competitive manner.
3) A written guarantee that they will fully refund an investor's fees in
case the investor's petition is rejected due to the fault of the
regional center.
4) A full disclosure of what is the amount of capital that the firm's founders and investors have invested and what is the percentage of ownership stake they will get.
EB-5 visa investors need to remember that Direct Investment Businesses
that opt for blue chip franchises (such as BK, 5 Guys, KFC, etc.) wholly
owned and controlled by the EB-5 visa investor usually offer a safer,
faster and very profitable way to get the EB-5 visa, and those who opt
for regional centers or partnerships or third rate franchises will
usually end up with delayed processing, capital lossess and low (or no)
ROI caused due to extensive fraud, nepotism & conflict of interest,
terrible exit strategies and high rate of denial of I-829.
Our EB-5 investor clients who opted to start Direct Investment
Businesses in quality franchises such as 5 guys, KFC, McDonalds, etc. as
opposed to the bottom tier franchises such as Voodoo or Marcos offered
by our unscrupulous competitors, will find that they have the following
advantages:
1) Great annual profits, averaging 22% annually, and usually ranging from 20% to 30% annually.
2) Capital gains: Our recommended businesses usually appreciate while
Marcos pizza locations are usually sold for a massive capital loss. In
10 years, none of my clients have had a capital loss, and most investors
in regional centers have suffered full or partial capital loss.
3) Easy exit strategy: You will find more buyers for 5 guys / KFC
restaurants in comparison to Voodoo BBQ offered by Joe Sloboda or Marcos
Pizza.
4) Easy approval with USCIS and with banks: Bank underwriters are very
picky, and they won't approve Voodoo BBQ locations easily, but will
easily approve premium franchises such as 5 GUys / KFC / etc. because of
their track record and market reputation. USCIS will also easily
approve known and reputed brands with solid track records, while they
won't do so with our competitors.
5) Full disclosure of material facts: Unlike David Tashroudian or the
Voodoo promoters Joe Sloboda & Fred Burgess or Regional Center
promoters, we clearly and fully disclose material facts to our clients,
which is why we confidently offer written guarantees of full and clear
disclosure of material facts.
6) Fee refund guarantee: We know that we do a thorough job, and
therefore confidently guarantee our work, while our competitors refuse
to stand behind their work. This shows EB-5 visa investors who is a
professional and who is not.
If you're interested in getting your EB-5 visa in a quick, safe and usually profitable manner, please call us.
Yours truly
Mohammed Shaikh, MBA, CFE, Licensed Business & RE Broker (CA &FL)
Online: Mohammed Shaikh, MBA, CFE, Licensed RE Broker (CA & FL)
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