EB-5 Center Manager Fined $1M For Paying Immigration Attys
A real estate development company specializing in EB-5 investment projects will pay a $1 million civil penalty for its alleged use of immigration attorneys, who were not registered as broker-dealers, to facilitate investments from foreign visa seekers, the U.S. Securities and Exchange Commission said Monday.
American Life Inc. will pay the $1 million civil fine and its President Henry G. Liebman will pay a separate $240,000 fine to remedy violations of the Exchange Act, according to the SEC’s order. The developer allegedly used immigration attorneys, who were representing individuals seeking visas through the EB-5 program, to recommend and facilitate the purchase of securities from American Life, paying them transaction-based compensation for each investment they gathered.
The attorneys were not registered broker-dealers and therefore, they were not supposed to receive the transaction-based compensation or sell securities, the order said.
“While some of the EB-5 Agents’ activities overlapped with legal services, for which they received separate legal fees, for a period of time, certain EB-5 Agents were paid transaction-based compensation for the activities which effectuated the investor’s transactions in EB-5 securities,” the SEC said in its order.
The EB-5 program awards green cards to foreign individuals who invest $1 million in the U.S. and create 10 full-time jobs. Investing $500,000 in a rural area or one with high unemployment also qualifies individuals for the visa.
Representatives for the SEC declined to comment on Monday. American Life representatives did not immediately respond to requests for comment.
Beginning in at least May 2011 and through May 2014, American Life compensated the immigration attorneys for their work recommending investments, acting as a liaison between the company and the investors, and dealing with the transfer and documentation of investment funds to the company, according to the order.
American Life manages regional centers and the centers are investment vehicles in which the company sells limited partnership interests. These interests are considered securities under the Securities Act and therefore, individuals who wish to sell them must register as broker-dealers.
Monday’s order also contained a cease-and-desist provision for present and future violations of the Exchange Act. However, American Life was not required to admit or deny any wrongdoing.
Counsel information was not immediately available.
The case is In the matter of American Life Inc. and Henry G. Liebman, file number 3-17285, before the U.S. Securities and Exchange Commission.
- District Of Columbia
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