SEC Charges Brokers with EB-5 Immigrant Investor Fraud

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The SEC has charged a Florida-based brokerage company and its international successor with investment fraud in the first enforcement action related to the EB-5 Immigrant Investor Program. The brokers were not registered to solicit the investments.

The EB-5 program allows foreign nationals investing $1 million or $500,000 in a designated area to obtain a green card. This immigrant visa indicates the holder is a lawful permanent resident that can reside and be employed in the United States. An individual that holds a green card for at least 5 years and meets the other criteria for naturalization can apply and be granted U.S. citizenship.

The Immigrant Investor Program was created by Congress in 1990 to stimulate economic growth in the US through capital investment and job creation by foreign investors. The 1992 pilot program, subsequently reauthorized, allows investors in USCIC Regional Centers to get one of the visas set aside under the program. The investment must be in a new commercial enterprise, established after Nov. 29, 1990 or if on or before that date, restructured and reorganized to create a new enterprise or the investment expands 40% the net worth or number of employees.

This investment fraud reminds me of the allegations in the SEC whistleblower case that paid out $14 million. In that case, the owner of the company soliciting international investments for a real estate company was misleading the investors about the status of the development and the possibility of immigration as a result of their investment. It was the largest reward under the Dodd-Frank program until a September 2014 award to a whistleblower for $30 million.

If you have evidence of investment fraud against international investors seeking immigration status such as the EB-5 program, contact one of our SEC whistleblower attorneys for assistance. They can be reached by our contact form or calling 1-800-590-4116.

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