Below is an announcement from the SEC detailing charges brought against an unregistered EB-5 Brokerage firm.  To learn how you can protect yourself as an EB-5 investor and EB-5 developer, contact Barella Law, P.C. to speak with EB-5 attorney Kyle Barella.

SEC Charges Unregistered Brokers in EB-5 Immigrant Investor Program

FOR IMMEDIATE RELEASE

2015-127
Washington D.C., June 23, 2015 — The Securities and Exchange Commission today charged two firms that illegally brokered more than $79 million of investments by foreigners seeking U.S. residency.  The charges are the first against brokers handling investments in the government’s EB-5 Immigrant Investor Program and follow earlier SEC actions against fraudulent EB-5 offerings.

Ireeco LLC, originally of Boca Raton, Fla., and its successor Ireeco Limited, a Hong Kong-based company operating in the U.S., were charged with acting as unregistered brokers for more than 150 EB-5 investors.  The EB-5 program administered by the U.S. Citizenship and Immigration Services (USCIS) provides a path to legal residency for foreigners who invest directly in a U.S. business or private “regional centers” that promote economic development in specific areas and industries.

According to the SEC’s order, Ireeco LLC and Ireeco Limited used their website to solicit EB-5 investors, some of whom were already in the U.S. on a temporary visa.  While Ireeco LLC and Ireeco Limited promised to help investors choose the right regional center to invest with, they allegedly directed most EB-5 investors to the same handful of regional centers, ones that paid them commissions of about $35,000 per investor once USCIS approved an investor’s petition for conditional residence (“green card”).

“While raising money for EB-5 projects in the U.S., these two firms were not registered to legally operate as securities brokers,” said Eric I. Bustillo, Director of the SEC’s Miami Regional Office.  “The broker-dealer registration requirements are critical safeguards for maintaining the integrity of our securities markets, and the SEC will vigorously enforce compliance with these provisions.”

Without admitting or denying the SEC’s findings, Ireeco LLC and Ireeco Limited agreed to be censured and to cease and desist from committing or causing similar violations in the future.  They also agreed to administrative proceedings to determine whether they should be ordered to return their allegedly ill-gotten gains, pay penalties, or both based on their violations.

The SEC’s investigation was conducted by Brian Theophilus James in the Miami office, and the case was supervised by Assistant Regional Director Chedly C. Dumornay and Associate Regional Director Glenn S. Gordon.  The SEC appreciates the assistance of the USCIS.

A proposed bill was recently released by Senator Patrick Leahy (D-VT) requesting renewal and changes to the EB-5 Visa Program.  While the nearly 80-page bill covers a variety of topics regarding the EB-5 investment, the main changes relate to the investment amount itself.

EB-5 projects located in Targeted Employment Areas (TEAs) and Regional Centers would increase to $800,000.  Direct EB-5 investments not located in a TEA would increase to $1,200,000.

Other changes to the program include variations to counting indirect job and changes to the TEA designation process.

The EB-5 Visa Program is due to sunset in September, and will likely be renewed with these proposed modifications.  If potential EB-5 investors wish to take advantage of the current reduced EB-5 investment of $500,000, they should contact an EB-5 immigration attorney immediately to begin the EB-5 visa process.  Petitions will need to be submitted before September 30, 2015, or investors may face the increased investment of $800,000 for TEA investments and $1,200,000 for non-TEA EB-5 investments.

Contact EB-5 immigration attorney Kyle Barella to receive a free EB-5 consultation from Barella Law, P.C.  Our EB-5 lawyers and professionals can assist potential EB-5 investors throughout the entire investment process.  We are conveniently located in Northern VA, just outside of Washington, DC.

Kyle Barella | kbarella@barellalaw.com | +1 202.621.3198 | www.eb5investmentlaw.com