Chinese Americans, Again, Fleece Mainland Chinese in $50M EB-5 Scam

With the main part of the EB-5 (immigrant investor) program about to sunset on April 28, its defenders are facing yet another scam, at the $50 million level, in which Chinese-Americans fleeced Mainland China investors.

Yesterday federal agents raided the offices of the California Investment Immigration Fund in San Gabriel, an EB-5 regional center, according to the Associated Press.

The timing could not have been better for those seeking either the reform of, or (less likely) the termination of the program.

With two exceptions, this scandal followed the recipe of so many others: It happened in California; the 100 or so victims were people from Mainland China, presumably both nervous and careless businessmen who wanted a set of green cards for their families; the fraudsters were a China-born operator, Tat Chan, and his daughter, Victoria (a lawyer whose immigration status is not immediately clear); the Chans said that they were creating a business/residential complex (but no construction had started); and the Chans used much of the money to pay off an earlier round of investors, and to buy presumably attractive mansions for themselves.

That much is par for the course. What was different this time is that instead of the Securities and Exchange Commission playing cop on the beat, with the Department of Homeland Security watching the action, the lead in this one appears to be the Federal Bureau of Investigation with DHS playing a supporting role.

Another difference is that this time something often suspected came into the open: Three of the defrauded investors were wanted in China for their own criminal activities. There were no details available about this in early press coverage.

And, for the cognoscenti of governmental writing about immigration crime, there is this sentence in a statement by FBI agent Gary Chen:

As a result of the fraudulent scheme, many foreign nationals were able to improperly obtain U.S. green cards through the EB-5 program, even though those foreigners did not in fact truly invest in U.S. businesses, nor were new American jobs created. 

This is in contrast with the usual Joe Friday approach in which a criminal violation is described in legalistic terms, without any attempt to describe the societal impact of the crime.

http://www.oyetimes.com/lifestyle/immigration/166426-chinese-americans-again-fleece-mainland-chinese-in-50m-eb-5-scam

Mentions

• California Investment Immigration Fund (CIIF)
• UNITED STATES SECURITIES AND EXCHANGE COMMISSION

States

• California