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

Men trusted to help rebuild after Katrina indicted on EB-5 fraud

Hurricane Katrina will always be remembered as one of the most devastating storms. In the years since, some communities are still struggling to rebuild through investment programs such as the EB-5 visa. When these types of investments are misused through alleged EB-5 fraud, it can leave foreign investors living in New York and elsewhere with fears of losing their dreams of rebuilding their own lives.

A federal Grand Jury recently issued an indictment against two individuals who were entrusted to oversee several projects in one area hit hard by the 2005 hurricane. According to the indictment, the men, one of whom was a trusted armed forces aid in several presidential administrations, siphoned off millions that had been invested by foreign nationals. The men were contracted by city officials to construct a conference center and hotel as well as aid job growth in other areas.

The men purportedly diverted millions in investments into their own companies for their private use -- including more than $1.82 million that they allegedly used to pay salaries to their spouses and themselves. The more than 30 investors made similar allegations against the men, stating that the $500,000 that they each contributed was not used for the intended project. The investors were also forced to fight to remain in the country after their visas had expired.

Prosecutors stated that the men spent an estimated $6 million on vacation homes and other properties while the site of the promised development project sits abandoned. Whenever developers apply for use of the investment visa, there are certain conditions that must be met, including the provision of providing at least 10 employment opportunities in order for investors to be eligible to apply for a visa. Allegations of EB-5 fraud can mean that foreign nationals could be deported when their temporary visas expire. New York residents who are facing this unsettling scenario can seek the assistance of an experienced attorney.

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