Investment Fraud Has Yet to Doom the Controversial EB-5 Visa Program

In 1990 Congress created the EB-5 visa program. Their goal was to stimulate the US economy, and the capital investment from foreign investors was cited as a good way to do that. The program itself gives easy green card access to foreign nationals, and their families, who invest $1,050,000 in US Development projects that meet certain qualifications and create/preserve 10 permanent American jobs. There are typically around 10,000 EB-5 visas available for investors each fiscal year.

Some of the controversies relate to the way the program favors wealthy and politically-connected foreign investors. However, the main issue with the EB-5 visa program is related to millions of dollars worth of investment fraud. The US Securities Exchange Commission took action against fraudsters amounting to hundreds of millions of dollars. A Vermont Ski Resort received a $350 million asset freeze and an unregistered Florida broker-dealer got a $79 million charge. The fraud doesn’t stop there; in 2012 the agency published a report explaining the fraud within the program. It’s now more than ten years later, but there is plenty of fraud that still exists.

The program provides investors with visas almost immediately; they typically can obtain a permanent residency green card two years later. Historically, approximately 85% of EB-5 green cards go to Chinese foreign nationals. Many people point out that this is a huge red flag and want Congress to address it.

There have been several extensions to controversial EB-5 visa program. Last year, President Biden signed a law extending the program through September 30, 2027. Should the program continue beyond that, there are those who would like to see significant changes in the way the program is organized. For example, those updates could include changes like increasing the investment sum from $1,050,000 to $1,500,000 or more. Additionally, it may also encourage more rural investments.

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