Khan & Yau, PC Reliable & Responsive New York City Attorneys

Investors, mall owners in legal fight over alleged EB-5 fraud

Foreign nationals who dream of starting over in America have a variety of visa options, though with the current quotas and restrictions, it may take years of waiting before those dreams are realized. However, one visa program allows investors who can meet the monetary requirements to begin the process of obtaining those coveted green cards. Unfortunately, this program is not without its problems and there may be investors in New York who are concerned that they have become victims of EB-5 fraud.

More than a decade ago, a shopping mall in another state fell upon hard economic times. It has been sold several times over the past years with the ownership change in 2010 heralding plans that promised to revitalize the prime commercial property through foreign investments. The owners, through their property management investment firm, courted foreign nationals with the hoped for end result that they would qualify for their visas once the project was completed.

However, though an estimated 16 investors from Taiwan and China made the stipulated $500,000 investment, the mall owners did not begin the agreed upon renovations. Instead, the owners of record, REO Property Group LLC, transferred ownership of the property to REO Group Properties, LLC, for approximately $14.7 million -- the majority of which was paid for through investment funds. Those investors have now filed a lawsuit against the property owners and their companies over fraud allegations.

The investors claimed that their hoped for visas were denied since the project was never completed nor did they receive a refund of those investments. The property owners denied any attempts to create confusion by the ownership changes and the property management did not comment on the allegations of defrauding their investors. The case was filed earlier this year and no further information on its progress was available. New York residents who have made investments into projects that are suspected of being part of EB-5 fraud may now be concerned about their immigration status. They are entitled to seek information from an experienced immigration attorney concerning their legal rights.

Source: desertsun.com, "Indio Fashion Mall 'lies fallow' while owners battle with investors", Rosalie Murphy, Oct. 9, 2017

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