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The EB-5 visa for Immigrant Investors is a United States (US) visa created by the Immigration Act of 1990. This visa provides a method of obtaining a green card for foreign nationals who invest money in the United States. To obtain the visa, individuals must invest $1,000,000 (or at least $500,000 in a "Targeted Employment Area" - high unemployment or rural area), creating or preserving at least 10 jobs for U.S. workers excluding the investor and their immediate family.
In the past two years alone, more than Rs. 240 crores have raised from India under the EB-5 visa program, most of which were raised by what is known as Regional Centers.A Regional Center is defined by the United States Citizenship and Immigration Services (USCIS) as any economic entity, public or private, which is involved with the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment. In other words, akin to a closed end mutual fund, Regional Center is an entity that facilitates the pooling of capital from multiple EB-5 investors into various multimillion-dollar projects.
As more Regional Centers approach India to market their projects and raise funds, it is important for the Indian investor to exercise extreme caution and perform the necessary due diligence.
In addition to the technical issues associated with job creation in Regional Centers, there have been multiple cases of outright fraud and misconduct by the project principals. Here is a brief list of some of the cases filed against Regional Centers:
* The Intercontinental Regional Center Trust of Chicago: The investors were made to believe that by investing with the Regional Center they would be financing construction of a hotel. The Regional Center falsely conveyed the investors that all the necessary licenses were obtained and Hyatt hotel had signed for the project. They also falsified documents to the USCIS to obtain preliminary permissions and investor’s provisional visas. More than $145 million of securities had been sold and $11 million had been collected in the form of administrative fees from more than 250 investors, mainly from China. Such fraud has not only lowered chances of investors getting back their money but also shattered the dreams of hundreds of applicants of obtaining the Green Card.
* Noble Outreach: An ongoing lawsuit against a Regional Center in New Orleans is another example of the unscrupulous activities by the Regional Center. The contract of New Orleans EB-5 program