WSJ Reports SEC Investigation of Big EB-5 China Activities

The Wall Street Journal reported this morning that the U.S. Securities and Exchange Commission (i.e., the SEC, the U.S. federal agency responsible for governing how investments are offered by U.S. issuers) is investigating the real-estate company run by the family of President Donald Trump’s senior adviser and son-in-law Jared Kushner for its use of the EB-5 program.

While the specifics of the investigation have not been made public, Washington’s focus on EB-5 enforcement has been increasing steadily this past year, after over a decade of rampant violation by EB-5 Regional Centers who routinely pay illegal “finders fees” to Chinese migration agents.  This past summer I wrote a post about the Congressional inquiry started against the Kushner Companies; it is good to see that the SEC is directly getting involved.

It is a blatant violation of U.S. Securities laws for any EB-5 Regional Center or project to pay a commission or finders fee to ANY individual or company – whether in the U.S. or overseas – for the referral of an EB-5 investor EXCEPT if that referring party is a legally registered securities broker/dealer.   Of course, such broker/dealers are not in a position to deliver EB-5 investors, so EB-5 Regional Centers invariably turn to migration brokers and other unlicensed “finders”, relying on them for virtually 100% of the EB-5 investors they identify and paying said “finders” under the table commissions.

Despite the clear language of the Securities and Exchange Act (which, in this regard, has been around for decades before EB-5 even existed) and SEC enforcement actions against both U.S. parties RECEIVING such finders fees (take a look here for just one example of an SEC round-up of EB-5 securities violators) and, more importantly, against U.S. Regional Centers for PAYING such fees.

For years, American Venture Solutions has been the sole EB-5 industry player who has followed these rules and identified investors the HARD way: one at a time, by referrals from our existing investors and by advisers who are interested in protecting the U.S. futures of their clients…not in a cash-stuffed envelope.  It is gratifying to see the SEC finally begin in earnest to prosecute those members of our industry which flagrantly violate established U.S. securities laws through the use of unlicensed migration agents who invariably lie to and overcharge foreign investors to “close the deal”…while Big EB-5 blithely and conveniently responds by saying that they can’t control what foreign agents promise investors.  Bullfeathers!

It’s a scam, it’s a sham, and it’s about time our industry begins playing be the rules because if one little EB-5 Regional Center can operate successfully while doing so, so can the giants of the EB-5 industry.  Clean ’em up, SEC, and let’s restore the luster to what is without a doubt the single best investment immigration program in the world, and the ONLY one which brings families to our beautiful American shores.

Tags: Current Affairs, EB-5, EB-5 Investor Visas, EB-5 Investors, EB-5 Reform, eb-5 visa, EB5, EB5 News, EB5 Regional Centers, foreign investment, Immigrant Investor, Immigration and Justice, Investment Immigration, regional center, Uncategorized