Another Fraud Trick Attempted in the EB-5 Program

This article was last updated on April 16, 2022

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As we have noted previously, there are many of different kinds of opportunities for fraud in the EB-5 program.

Earlier this month another shady maneuver emerged, this time caught by the Department of Homeland Security. The EB-5 program is designed to give overseas investors a set of green cards when they put $500,000 of their own money into a project approved by, but not guaranteed by, DHS. That investment, in turn, is supposed to be at risk, and should lead to the creation of 10 U.S. jobs.

A May 11 decision by the DHS Administrative Appeals Office, this time against a would-be alien "investor," revealed that the alien had tried to qualify by borrowing $545,000 from the regional center involved. Both DHS officials and then AAO (on appeal) ruled that the proposed investment was not an investment at all and that no green cards would be forthcoming.

The AAO has bizarre privacy standards, so we cannot tell you the name of the alien, his or her lawyer, the regional center, or even the administrative judge handing down the decision, but here it is. It is entitled "Matter of E-L-".

The alien investor had sought to use the borrowed funds, saying that they were backed by a joint savings account with a balance of $207.18 (unless this is a typo), and the assets of the proposed EB-5 investment, a wispy asset at best. The $45,000 was for a fee to be paid to the regional center and the $500,000 was to be invested in the EB-5 project.

It would be a public service for DHS to permit the naming of at least the regional center in this case, so others would be warned about its activities, but AAO prefers to keep such information to itself.

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