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After Investigations, Center to Close Over EB-5 Fraud Allegations

Aug. 31, 2017

While there are many avenues for one to apply for a visa, only one program requires a foreign national to make an investment into a project that is geared toward improving both the surrounding geographic location and the lives of other residents. However, this program is also the frequent magnet for criticism and allegations of EB-5 fraud. Many New York developments have been completed through the investments that immigrants have made through this visa.

For the past several months, both the government of one state as well as a federal agency have conducted investigations into that state’s handling of a regional center. Recently, both entities have come to the same conclusion: this center will be closed over the mishandling of the EB-5 visa projects. The owner of several of the projects that were registered with this visa was accused by both the U.S. government and the SEC of misappropriating the funds that were meant to be used in the development projects — most notably the Jay Peak Resort.

The United States Citizenship and Immigration agency issued a notice to Vermont’s governor, Phil Scott, that the agency was moving to close the regional center due to the state’s lack of effective oversight. Gov. Scott also announced that his own investigation arrived at the same conclusion. However, he has requested that the federal agency allow the center to be shut down in stages and that ongoing projects that are fully funded will be allowed to continue to fruition.

The governor is hoping to minimize the harm that the state’s economy may experience once the center is shut down. He has acknowledged that the state is not suited to effectively manage this visa program, though most regional centers are privately managed with minimal oversight from the federal government. The owner of that resort was accused of mishandling an estimated $200 million in investment funds in one of the largest cases of EB-5 fraud. New York residents who have concerns over an investment of their own and are worried as to how this may impact their current visa standing may consult with an experienced attorney regarding their rights and current status.

Source:, “Feds, Vermont agree to shut down EB-5 center“, Neal P. Goswami, Aug. 23, 2017