As it is, law enforcement officers are opposing regional centers due to fraud and money laundering concerns and even SEC recommended that EB-5 visa investors should avoid regional centers, and with regional centers now poised to be kicked out of the EB-5 visa program, Genuine Direct Investment Businesses are the only route left.
WHY should EB-5 visa investors choose Genuine Direct Investment Businesses?
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 https://www.congress.gov/congressional-record/2013/12/19/senate-section/article/s9001-2
Even the SEC warns EB-5 visa investors to avoid regional centers.
What can EB-5 visa investors learn from these warnings?
As thousands of EB-5 visa investors have already learnt to their misfortune, regional centers usually commit securities fraud, violate securities laws and launder money. What most regional centers don't disclose is that EB-5 visa investors face almost certain capital loss, and more importantly, they don't disclose that most EB-5 visa investors do NOT get a permanent green card.
EB-5 visa investors need to remember that IT IS VERY HARD TO EARN MONEY AND VERY EASY TO BURN MONEY. A Genuine Direct Investment Business is the SAFEST, FASTEST and usually most PROFITABLE way to get an EB-5 visa.
A Genuine Direct Investment Business has the following characteristics:
It is 100% owned and controlled by the investor. This eliminates conflict of interest and significantly reduces the possibility of fraud. Even ICE, USA's biggest investigative agency says that all Regional centers usually commit fraud, conflict of interest and violations of securities laws (see http://www.smartbusinessbroker.com/EB5_ICE_fraud_memo.pdf)
It is in either a premium franchise such as Five Guys / KFC / Hertz etc. or in a solid non-franchise business such as banquet hall, used car lots, etc. If the business is a risky franchise such as Voodoo BBQ, Marcos Pizza, etc., it is unsafe. A franchise is suitable for investment only if it is on a major bank's list of approved franchises AND features in a list of top performing franchises (see http://www.slideshare.net/MohammedShaikh4/2012-top200 ) AND is recommended by an experienced business broker who owes a fiduciary duty to the EB-5 visa investor. Most franchises are unsuitable for EB-5 visa investors due to their inability to PROFITABLY generate 10 jobs, due to which capital losses are common with risky investments such as regional centers or Voodoo BBQ, Twistee Treat, E3 Investment, etc.
Genuine Direct Investment Businesses are easily saleable in the open market. For example, it is easy to quickly sell off a Five Guys or KFC Franchise in the open market, while there is no market for partnership or regional center securities, risky franchises such as Marcos Pizza / Voodoo BBQ / Twistee Treat, etc. due to which EB-5 visa investors are stuck for 5-9 years and have to PAY to sell their share.
What are the advantages of choosing a Genuine Direct Investment Business to get the EB-5 visa?
The EB-5 visa investor has control and ownership of their business and corporate funds. This helps eliminate conflict of interest and fraud, and results in higher earnings and capital gains.
The EB-5 visa investor usually earns 15-25% Returns annually, while regional centers offer measly returns of 1%, but have significant capital losses on exit.
The EB-5 visa investor usually earns solid capital gains of over 30% upon exit, while those who invest in risky franchises, partnerships and regional centers usually end up with capital losses.
The EB-5 visa investor has an easy exit strategy and can sell their business (usually for a profit) as soon as they get their permanent green card (I-829 approval), while risky franchises, partnerships and regional centers lock in funds for 5-9 years.
It is easier get the I-526 approval (temporary green card) using a Genuine Direct Investment Business in comparison to regional centers.
Genuine Direct investment Businesses are usually able to help the EB-5 visa investor get their I-829 approved, whereas less than half of the EB-5 visa investors who chose regional centers, partnerships and risky franchises were able to get their I-829 approved.
There is usually no conflict of interest and fraud seen in a Genuine Direct Investment Business, whereas there is usually extensive conflict of interest and fraud to be found in regional centers, partnerships and risky franchises. An excellent example is how Joe Sloboda and Fred Burgess sold Voodoo BBQ franchises to EB-5 visa investors without disclosing the fact that they were the master franchisors and earned money on the back end.
EB-5 visa investors should avoid those who refuse to guarantee the following:
1. Full disclosure of all material information.
2. Freedom from fraud and conflict of interest.
3. Full refund of Investor's fees in case you’re rejected by USCIS due to the service provider's fault or promoter's fault.
If you're an EB-5 visa investor interested in getting their EB-5 visa quickly, please contact us. You'll be really glad that you did.
Yours truly,
Mohammed Shaikh, Licensed RE and Business Broker (CA & FL)
Phone: +1 407 535 0616
Online: http://www.smartbusinessbroker.com Skype:mohammed.shaikh
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