An investigation is underway into whether an immigration professional has stolen millions of dollars from his British clients. On 21st December the Sunday Mirror reported that “the US Secret Service is hunting for a British conman who masterminded a massive fraud.”
Derick Coles and his company, the New Horizons Group, are believed to be under investigation by the FBI and US Secret Service. New Horizon’s clients believed they were investing in American projects to obtain US permanent resident (green) cards. Instead, their money has gone missing, and so has Coles.
David Farrow MBE, managing director of D&D Rail, and his wife, met with Coles and decided to use the New Horizons Group to handle their family’s EB-5 visa applications. The EB-5 visa category allows Brits to invest either $500,000 or $1,000,000 in certain US Citizenship and Immigration Service (USCIS)-designated ‘regional centres’, and subsequently earns permanent residency (or ‘green card’) for the investor and their dependent family members.
In good faith the Farrows stumped up $500,000 in investment capital, and paid $37,000 in fees.
Over a period of three months Farrow received updates from Coles stating that everything was going very well with the applications, but he became aware something was amiss last November.
“I was shocked to receive a phone call from an attorney (stating) that he had only two days to put the application into the immigration services,” Farrow explains.
This set alarm bells ringing and Farrow went to confront Coles at his office in Sarasota, Florida.
Farrow, who is a part-time police officer in the UK, tells us Coles said he was “sorry for spending my money and could he have two to three weeks to try to get my money back for me.”
The Farrows had believed their money was secure in a US bank account, but unfortunately they were mistaken. Their emigration plans collapsed and they are yet to see a penny of their money back.
“I have found many other victims who have lost jointly in excess of $2 million dollars,” Farrow says, understandably upset, and concerned that nobody else should suffer the same fate. “I only wish I had done my homework better before my wife and I handed over our life savings; our
dreams are ruined.”
The FBI agent we contacted was only able to say he could “neither confirm nor deny” that an investigation was underway into Coles and New Horizons. However, a website set up by Brit Terry Dunne to track the story says “victims are strongly advised to personally contact… the US Secret Service: (001) 813 227 2370; or the Sarasota FBI: (001) 941 955 3325.” Dunne himself claims to be one of Coles’ victims, to the tune of £150,000.
“I met Coles at one of his immigration forums in the UK,” Dunne explains. “I could not find anything negative about him at that time and decided to let him handle my E-2 application.”
The E-2 is another investment visa, which typically requires a smaller investment than the EB-5 but does not lead to permanent residency. Dunne’s visa application ended similarly to the Farrow’s though: with the loss of money that was supposedly secure.
“At no time was I alerted to the fact that New Horizon Group’s so-called escrow account [a trust account held in the investor’s name to pay obligations – see box-out on the next page] was not secured and was in fact a normal business account,” he tells us.
Sadly, this is not the first time would-be expats’ dreams have been exploited either.
Douglas K Hall is currently serving a custodial sentence in Bartow Work Release Centre, Florida for grand theft and forgery. In 2007, the BBC reported 25 Brits paid over $4.5 million to Hall’s company, Central Florida Visa Group, to help them obtain E-2 visas. The investors were then contacted by Hall, who claimed their money had been stolen by an employee. However, investigators suspected Hall of having stolen the money, and he was subsequently sent to prison.
There are, of course, bad apples in every industry, and unfortunately immigration is no different – with people preying on others’ ambitions. These instances should not put people off emigrating through investment visa categories, though, as there are many reputable immigration firms and individuals.
To avoid suffering the same fate as the Farrows it is advisable to research the credentials of those you plan to entrust visa applications and life savings to. Seek advice from those who have gone through the process before you and ask ‘regional centre’ projects to recommend reputable immigration professionals.
As well as the website set up by Dunne (www.derickcoles.com), others who say they have lost money to Coles have come forward on websites www.ripoffreport.com and www.expatsvoice.org.
Immigration professionals Elliot Greene and Bill Cowie offer advice on protecting your EB-5 investment fund
What should EB-5 investors consider when choosing a ‘Regional Centre’?
Elliot Greene (EG): Immigration attorneys should not try and lead you towards one particular Regional Centre. It is up to the applicant to carry out the necessary research prior to committing funds.
Bill Cowie (BC): Ideally one should personally visit Regional Centre(s) for a first-hand inspection and meeting with the business’ principals.
How do you decide who to trust to get you through the process?
EG: As with all investments, the individual should always seek to use an experienced, licensed practitioner. While past performance is not a guarantee of future performance, it is an excellent indicator of how you can expect to be treated. Testimonials from satisfied clients are important – good reputations take years to build, and seconds to destroy. Research Regional Centres and the practitioner that will be assisting you, ask for references and check licenses.
BC: To be designated an EB-5 Regional Centre the business has been subject to quite rigorous US Government inspection. It is nonetheless prudent to conduct your own “due diligence” review with advisors acting solely on your behalf.
How can people protect themselves in the EB-5 visa category?
BC: By assembling a team of independent, experienced legal, business and visa advisors and selecting the Regional Centre that best meets their personal situation and budget.
Potential investors should, however, check ALL immigration options before committing to the EB-5 route – always speak to a reputable immigration attorney first.
■ Immigration attorney Elliot Greene: www.legalimmigrationservices.net
■ Business Consultant Bill Cowie: www.eb5investmentvisas.com