Father-Daughter Duo Accused of EB-5 Visa Fraud
A father and daughter duo allegedly helped obtain visas for Chinese nationals, including people on that country’s “100 Most Wanted” fugitive list, by defrauding a U.S. program that awards visas to wealthy foreigners who invest in American projects, according to federal court documents unsealed Wednesday.
The allegations of fraud are the latest to hit the EB-5 visa program, which gives green cards to foreigners who invest $500,000 in businesses that are measured to have created 10 jobs per investor.
Lawyer Victoria Chan and her father, Tat Chan, allegedly raised more than $50 million from more than 100 Chinese nationals who wanted these visas, according to a detailed affidavit for a search warrant filed in federal court in the Central District of California unsealed Wednesday.
But instead of investing in U.S. businesses, the duo allegedly pocketed millions and gave the money back to some of these investors.
Ms. Chan didn’t return calls and texts seeking comment. Her father couldn’t be reached for comment.
Agents of the Federal Bureau of Investigation and of Homeland Security Investigations, the investigative arm of the Department of Homeland Security, raided two residences and a business office outside Los Angeles on Wednesday. A spokeswoman said the agencies weren’t seeking to make arrests immediately.
EB-5 fraud cases have popped up in Vermont and South Dakota in recent years.
Changes to the program have been proposed by the Department of Homeland Security that would increase the investment requirement and make sure the money reaches its intended target under the law: poor rural and urban areas.
At a hearing last month on the proposals, House Judiciary Chairman Bob Goodlatte (R., Va.,) said the visa program is in “desperate need of reform.”
“While I support the overall goal of the EB-5 investor visa program, it is currently riddled with fraud and abuse and has strayed away from the program Congress envisioned when it created the program decades ago,” he said.
Past reform measures proposed in Congress have stalled amid a fight between major urban real-estate developers and rural lawmakers.
One issue with the program is investors tend to care far more about getting the green card than the return on their investment, so they tend not to scrutinize investments as closely as would a typical, local investor, EB-5 professionals say.
A spokesman for U.S. Citizenship and Immigration Services, which runs the program, declined to comment on the California investigation, but said the agency has taken steps to “strengthen the integrity” of the program. These include conducting fraud-risk assessments and a new audit program.
California investigators believe that many of the investors were complicit in the fraud, but some may have been duped, believing they were investing in legitimate projects, according to a person familiar with the investigation.
The Chans allegedly claimed that the goal of the venture was to develop hotel and retail real-estate projects. But none of those projects ever came to fruition, according to the affidavit.
Ms. Chan is accused of visa fraud by the FBI for giving investors their money back while the visa petitions were being processed and for sometimes entering the same 10 new jobs for different foreigners. The FBI also says Ms. Chan and her father allegedly used millions to buy homes for themselves and pay for other personal expenses.
As a result of the scheme, the U.S. issued green cards to Chinese fugitives who had been charged with crimes such as bribery and abuse of power, according to the affidavit. The FBI didn’t disclose the names of the fugitives, but the affidavit does describe three fugitives.
Two of them are a married couple, accused separately of accepting bribes and other crimes by the Chinese government. They received temporary green cards in 2010, according to the affidavit.
https://www.wsj.com/articles/father-daughter-duo-accused-of-eb-5-visa-fraud-1491435354
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