Misuse of Investor Funds in EB-5 Cases


Many wealthy people from other countries are investing large sums of money in the EB-5 investor program as way to immigrate to the U.S. with green cards. Unfortunately, some investors are discovering that their investment funds are being moved outside of the EB-5 program, leading to a loss of funds and a denial of their green card applications.

In some instances the immigrant investors later learn that their money has been spent on the company owners’ personal bills instead of the actual company in the E-B5 investor program. The SEC recently froze the funds of a Vermont ski resort to prevent further misuse of investor funds which had been allegedly spent on non-business related luxury purchases.
Not too long ago, I received a phone call from someone whose E-B 5 immigration application had been denied because the immigration service had concerns about the company he had invested in, and he wanted to know whether to appeal the USCIS denial.

My opinion is that in such cases it is better to file a new EB-5 application with a reputable company instead of spending more money on a bad case that has already been denied because of alleged mismanagement of the investor funds.

If you have invested in the EB-5 program and discover that you have been the victim of fraud, it is a good idea to contact the U.S. Securities and Exchange Commission (SEC) to file a complaint or to find out if a complaint has been lodged already. This way if the SEC is able to get a refund of the money or assets, you may get some of your money back. You may want to find out if there is a class action lawsuit against the company too.

Should you choose to file another E-B5 application, do conduct the necessary due diligence before you invest in a company. With proper screening of companies and their agents, and by asking the right questions, the EB-5 investor program can still be a good way for certain individuals to immigrate to the U.S.

  • By Doreen Emenike
  • August 8, 2016
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