Investor Alert: Investment Scams Exploit Immigrant Investor Program
The U.S. Securities and Exchange Commission's Office of Investor Education and Advocacy and U.S. Citizenship and Immigration Services are jointly issuing this Investor Alert to warn individual investors about fraudulent investment scams that exploit the Immigrant Investor Program, also known as "EB-
EB5 Regional Centers are not guaranteed.The fact that a business is designated as a regional center by USCIS does not mean that USCIS, the SEC, or any other government agency has approved the investments offered by the business, or has otherwise expressed a view on the quality of the investment. The SEC and USCIS are aware of attempts to misuse the EB-5 program as a means to carry out fraudulent securities offerings.
As with any investment, it is important to research thoroughly any offering that purports to be affiliated with EB-5. Take these steps:Confirm that the regional center has been designated by USCIS, understand that USCIS has not endorsed the regional center or any of the investments it offers. o Obtain copies of documents provided to USCIS.. Ask the regional center for copies of these forms and supporting documentation provided to USCIS. o Request investment information in writing. Examine it carefully and research similar projects in evaluating the proposal. o Ask if promoters are being paid. Be skeptical of information from promoters that is inconsistent with the investment offering memorandum or private placement memorandum from the issuer. o Seek independent verification. Confirm whether claims made about the investment are true. o Examine structural risk. Carefully examine loan documents and offering statements to determine if the loan is secured by any collateral pledged to investors. o Consider the developer's incentives. Recognize that if principals and developers do not make an equity investment in the project, their financial incentives may not be linked to the success of the project.
Look for warning signs of fraud.Beware if you spot any of these hallmarks of fraud: o Promises of a visa or becoming a lawful permanent resident. o Guaranteed investment returns or no investment risk. o Overly consistent high investment returns. o Unregistered investments. o Unlicensed sellers. o Layers of companies run by the same individuals.
ConclusionIf your investment through EB-5 turns out to be in a fraudulent securities offering, you may lose both your money and your path to lawful permanent residency in the United States. Carefully vet any EB-5 offering before investing your money and your hope of becoming a lawful permanent resident of the United States.