EM Capital Global Advisors, based in San Francisco, led by Seth Richard Freeman, CIRA, Senior Managing Director, has established an international practice group focused on assisting the full range of EB-5 stakeholders in troubled, fraud-related and underperforming EB-5 investments and litigation. Our Shenzhen based multilingual Senior Managing Director, Michael Changyao Chen, is available to assist Chinese investors and agents on protecting their investment and green card applications.
U.S. Senator Chuck Grassley's recent statement denouncing inaction on reforming the EB-5 Investment program highlights the urgent need for investors, their agents and immigration attorneys, as well as regional centers, project sponsors and their professionals and counter-parties, such as securities attorneys, broker dealers and senior lenders to adopt and implement a significantly higher level of investment management industry "best practices" and compliance policies and procedures.
We expect senior secured lenders that have financed EB-5 projects to abruptly realize their loans and the bank's reputation in relation to news about having lent on high-profile EB-5 projects that under-perform or fail due to fraud, require professional financial advisory services, including due diligence, forensic accounting, workouts, restructuring and interim fiduciaries, such as receivers. We imagine that many EB-5 senior lenders are not aware of the complexities of having 10, 50, 100 or more foreign investors, most of whom are Chinese with little understanding of the U.S. legal system individually and as a class, making claims against banks. Resolving such lawsuits and claims requires cross-cultural negotiation expertise and cross-border business experience.
Likewise, U.S. immigration lawyers, EB-5 regional centers and EB-5 project sponsors are also targets for suits and enforcement action brought by EB-investors and regulators. Securities attorneys that drafted private placement offering documents are equally exposed in claims related to investment fraud by anxious EB-5 investors seeking to protect their green card applications and investments.
While we believe that many of Senator Grassley's proposed EB-5 program reforms will be implemented, current and prospective EB-5 investors and their immigration attorneys and senior lenders should consider engaging professional firms such as EM Capital Global Advisors to provide financial advisory services intended to perform on-going monitoring and due diligence, and insist upon significantly higher frequency of project reporting and accounting and financial detail from regional centers and project sponsors. Investors and their advisors that suspect or have evidence of problems should not delay in seeking professional assistance. In general, investors and management wait too long to seek professional advice that only increases the challenges of mitigating and resolving complex situations and fraud-related problems. Feel free to contact me at firstname.lastname@example.org.
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