The North American Securities Administrators Association ("NASAA") provided immigrant investors seeking EB-5 visas with information to help protect themselves from fraud.
Under the EB-5 program, foreign investors who meet certain eligibility requirements can apply for conditional resident alien status (i.e., a conditional "green card") in the United States by investing in the American economy. The EB-5 program has increased in popularity in recent years and with it has come increased allegations of fraud.
The NASAA provided the following tips for the immigrant investors to avoid fraud: (i) investigate the investment promoter and regional center, (ii) review and analyze any documentation, (iii) understand how the sponsors/developers are paid, (iv) investigate claims and independently verify information, and (v) know your risk tolerance and look for classic warning signs.
Commentary
EB-5 investments seem to attract fraud at an unduly high rate. This is an issue worth attention because the victims of such fraud are not only the defrauded investors, but also the United States, which essentially is offering an opportunity to reside in the United States for immigrants who are able to provide investments that strengthen our economy. If those investments themselves are fraudulent, the country loses the benefit for which it has traded residency. See other news items on EB-5 programs.
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