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New Website Documents Fraud & Corruption from EB-5 Immigration Program

WASHINGTON, D.C. – Aug. 2, 2018 – Today, Cause of Action Institute (“CoA Institute”) launched a new website www.EndEB5.org, documenting  questionable investments and investigations relating to the EB-5 Immigrant Investor Program (“EB-5”) and the Regional Center Program. As the Cause of Action’s website reveals, the EB-5 program is ripe for fraud, corruption, can pose a national security threat, and provide questionable value to taxpayers and the U.S. economy. The website launched with more than a dozen examples of questionable investment. The organization has identified more than 50 examples and will release more troubling investments over the next two weeks.


CoA Institute created the website in response to Sen. Diane Feinstein asking the director of the program for a list of “shady programs.” The director didn’t have a list of “shady programs,” so CoA Institute put one together. As Congress weighs whether to extend or allow the Regional Center Program component of the EB-5 program to expire, CoA Institute urges Congress to review this website and recognize the severe flaws in the EB-5 program and let it expire on Sept. 30.


John J. Vecchione, president and CEO of CoA Institute, issued the following statement:


“The EB-5 Program faces legitimate scrutiny due to allegations that it’s become ripe for fraud and corruption and become a pay-to-play scheme. As our research illustrates, EB-5 and the Regional Center Program amounts to a pay-to-play scheme that enriches questionable actors who defraud investors and visa seekers and poses a threat to national security. We urge Congress to review the cases we have identified and allow this program to expire.”


BACKGROUND & HOW IT WORKS:

  • The Immigration Act of 1990 created EB-5 and permits foreign nationals to apply for a conditional visa by making a $1,000,000 investment in an American business that creates at least 10 jobs.

  • Alternatively, a visa-seeker can invest $500,000 in a “targeted employment area” (rural or area of high unemployment) to satisfy the visa requirement.

  • In 1992, the “Regional Center Program” was created to allow pre-approved third parties to pool EB-5 investments from foreign nationals toward American development projects.

  • The Regional Center Program is a source of much of the fraud in EB-5 Immigrant Investor program.

  • CoA Institute has found numerous cases where individuals who controlled a pre-approved Regional Center Program, use the program to collect huge sums in “investments” and fees from individuals seeking a visa, only to use the funds not to create jobs in the U.S. but to fund their lavish lifestyle.

On June 19, 2018, the U.S. Senate Committee on the Judiciary held a hearing on EB-5 with Lee Francis Cissna, Director of the U.S. Citizenship and Immigration Services (“USCIS”), the agency responsible for the program. In this hearing, when Senator Feinstein asked Director Cissna for a list of “shady investments” the agency has found while investigating fraud in this program, Cissna stated he was unable to produce one.


In response, CoA has begun tracking and identifying examples of fraud or other questionable investments made through the EB-5 program. The website includes 13 examples and CoA Institute expects to release as many as 50 examples of questionable investments under the EB-5 project files page, detailing projects that have been proven to be fraudulent and failed to provide the proposed economic benefit.


The countless documented instances of fraud and corruption developed through this program have pushed the EB-5 program far beyond the point of corrective legislative reform. CoA Institute will continue to publish findings on this website as Congress decides whether to allow the program to expire on September 30.


About Cause of Action Institute

Cause of Action Institute is a 501(c)(3) nonprofit, dedicated to providing government oversight, transparency and advocating for economic freedom and individual opportunity advanced by honest, accountable, and limited government.


Media Contact:


Matt Frendewey matt.frendewey@causeofaction.org 202-499-4231