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Notice to Investors: Watch Out for Scams That Target Immigrants

Investors should be aware that there are some scams circulating that aim to exploit the Immigrant Investor Program or “EB-5,” a program that helps foreign nationals become permanent residents of the United States. The SEC is taking emergency measures to stop any allegedly fraudulent EB-5 offerings.

The EB-5 program offers a path to permanent, lawful residency in the U.S. to foreign nationals – specifically, investors whose investments create jobs in the U.S. People who own businesses can apply to the U.S. Citizenship and Immigration Services (USCIS) for the status of “regional center.” Each of these regional centers offers opportunities to invest in various commercial enterprises.

It is important for investors to note that just because a business carries the classification of “regional center” does not mean that the USCIS or any other agency has approved that business’ investment offerings. Some businesses are using the Immigrant Investor Program to defraud investors.

In a recent example (SEC v. Marco A. Ramirez, et al.), the SEC claims that a business that goes by the name “USA Now” used its designation as a regional center to defraud investors, allegedly promising 5% return on investment and the ability to get an EB-5 visa.

The SEC also claims that promoters working for USA Now solicited people for investments even before the business was classified as a regional center. Rather than investing their money as promised, claims the SEC, USA Now took some of the money for their own personal use. Another example is SEC v. A Chicago Convention Center, et al., in which the SEC accused Chicago Convention Center of defrauding investors out of $156 million.

How can I check the validity of investments claiming to be associated with EB-5?

If you have been approached about an investment opportunity affiliated with the Immigrant Investor Program, take the following steps before you invest:

  • Visit www.uscis.gov and check the list of regional centers to confirm that the business is listed.
  • Request copies of documentation from the business that would confirm regional center status, such as the Form I-924 or Form I-924A.
  • Ask the regional center to submit the investment offering to you in writing for further examination.
  • Get information about the individuals promoting the investments. Be wary of individuals who get a commission or other benefits from promoting these offerings.
  • Get third party verification that the investment is legitimate.
  • Have you been promised permanent resident status if you invest in the offering? If so, stay away.
  • Stay alert and don’t invest if you notice any other signs of fraud, such as guaranteed returns, unregistered investments, and unregistered/unlicensed brokers and financial advisors.

If you or someone you know has lost money through an alleged investment scheme, we invite you to contact one of our investment fraud lawyers at Meyer Wilson today. We will provide a free case review and inform you of your legal rights and options.

The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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