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 | [email protected] | +1 202.621.3198 | www.eb5investmentlaw.com 

By: Kyle Barella

Have you and your family been considering immigration to the United States by way of the EB-5 Visa Program?  EB-5 immigration is a complex area of U.S. law, and you should seek the advice of an experienced EB-5 attorney if you are exploring the possibility of investing in United States.

The EB-5 Visa Program is a path to a U.S. green card through investing $1,000,000 into a U.S. business, in turn creating ten full-time jobs for qualified citizens and permanent residents.  Alternatively, an EB-5 investor can choose to invest $500,000 in a Regional Center project or a direct TEA project.  Both scenarios lead to a green card.

Why now is the time to make your investment.

In just a few short months, in September 2015, the EB-5 Regional Center Program, which allows for the reduced investment of $500,000, is due to sunset.  While it’s more than likely Congress will renew the program, there are serious talks the investment amount will be increased.

As it stands, both a Direct EB-5 investment and a Regional Center investment can be reduced to $500,000 if the EB-5 project is located in a Targeted Employment Area (TEA). 

Washington politicians have discussed plans to increase the TEA investment amount to $800,000.  This nearly doubles the current TEA investment amount of only a half-a-million.

Some politicians, including Republican presidential-nominee hopeful, Jeb Bush, have called for the entire Regional Center / TEA EB-5 option to be eliminated.  As a result, all investors would be required to make a direct $1,000,000 EB-5 investment.

While increasing the investment amount to $800,000 is only speculation at this point, there is strong support among certain members of congress to raise the EB-5 investment threshold.

Potential immigrant investors are encouraged seek out a qualified EB-5 attorney and get started on their investment today.  Though the EB-5 visa is here to stay, the reduced investment has an uncertain future. 

When researching the options for making an EB-5 investment, potential investors frequently hear about the two EB-5 investment paths - direct and indirect.  But are there really three paths?  The answer to this question is yes and no.  This blog will explore the different options a potential investor has when deciding to make their EB-5 Green Card investment.

The most popular option for the EB-5 Visa is the indirect regional center investment.  The indirect regional center investment allows the client to make a completely passive investment in a project that will be the sole responsibility of a developer to maintain.  These investments are often loan based, but in some cases equity based investments.

The EB-5 investor will not have any managerial or day-to-day responsibility.  They simply invest their money and leave it in the hands of the developer to meet the immigration requirements so they can become full-fledged green card holders.  It’s an affordable option because the vast majority of regional center projects are located in targeted employment areas that allow for the reduced investment of only $500,000.

What are the positive attributes of an indirect regional center investment?  The reduced investment amount is what makes the regional center path most appealing to clients.  Some investors also enjoy not having to worry about the day-to-day burden of running the business.  While a client may have created a successful business in their home country, they may be unfamiliar with US business practices and culture and opt to have the project managed for them.  For these investors, the regional center path fits perfectly into their immigration plan.

What are the negatives of an indirect regional center investment?  Regional center investments will offer a low return.  This isn’t to say that the project is bad – it’s just the nature of EB-5.  A typical regional center project will generally yield a 0.5% - 1% return.  This isn’t very high, so investors wishing to obtain a larger return should choose a different path for their EB-5 investment.  Clients should be very wary of regional center projects offering them large returns.  Another potential negative aspect is that the EB-5 investor doesn’t have any decision making power in the business.  This may not be ideal for clients that consider themselves to be savvy investors.

So what are the options for investors not wishing to invest through the indirect regional center path?  Here is where the discussion of three paths to EB-5 comes up.  Many clients (and immigration attorneys) misinterpret the rules regarding a direct (non regional center) investment.  Often they think the investor must be involved in the day-to-day operation and running of the business.  They believe they have to live in the same city and go into the business daily to qualify for EB-5.  That is one option, what I refer to as a “true” direct EB-5 investment, but it’s not the only option for direct EB-5.

So what are the two paths under the direct EB-5 umbrella?  It’s first important to examine the rules regulating the requirement that the EB-5 immigrant investor be engaged in the management of the new commercial enterprise.  The EB-5 Program requires the immigrant investor to be engaged in the management of the new commercial enterprise, either through the exercise of day-to-day managerial responsibility OR through policy formulation.  8 C.F.R. §204.6(j)(5).  

For investors courageous enough to take the plunge and run their own EB-5 business, they can do so through the “true” direct EB-5 path.  They will be responsible for the creation and day-to-day management of the business, as well as meeting all the immigration requirements.  Their investment return will be based solely on their own personal efforts.  This path can prove to be risky and should only be undertaken by clients confident in their ability to meet all requirements under the program.

This may work for some investors, but the majority of EB-5 clients do not want to assume full responsibility for their immigration future.  These clients may benefit from a more “hands off” direct investment.  This “hands off” direct investment path is great for investors wishing to invest in smaller projects that may yield significantly higher returns than the indirect regional center investment.  In conformity with the rules, these investors will have a policy-making role by being a corporate officer or member of the corporate board of directors.  Just like the regional center investment, this EB-5 Visa project can be placed in a targeted employment area and qualify for the $500,000 investment.

These investors get the best of both worlds.  Unlike the regional center path they have some control over the business and typically receive a larger return.  However, there is no requirement for then to run the day-to-day operations and they leave the responsibility of meeting the immigration requirements to the project developer.  The EB-5 investor is free to live and work anywhere in the United States, regardless of the business location.  This path is ideal for all EB-5 investors frustrated with the lack of control and low returns of an indirect regional center investment.

For more information on procuring your U.S. Green Card through the EB-5 Visa Program and which EB-5 path is most suited for your investment needs, contact General Counsel, P.C. EB-5 lawyer Kyle Barella today.  Our EB-5 team serves EB-5 Visa clients in Washington DC, Virginia and around the world.  Our office is located in Northern Virginia in the McLean Business Center.

www.eb5investmentlaw.com | www.generalcounsellaw.com

6849 Old Dominion Dr. Suite 220, McLean, VA 22101 | 703.556.0411 | [email protected]

Washington DC EB-5 Attorney | Virginia EB-5 Attorney

Since the collapse of the Soviet Union in the early 1990s, the United States has welcomed a steady flow of immigrants from Russia – many settling in cities like Miami, New York, Denver, Los Angeles and Baltimore.

Potential Russian EB-5 investors, while prosperous in their home country, choose to leave when government corruption and unpredictability become a factor.  These investors recognize that Russia cannot provide a suitable investment environment to protect their wealth, only economic uncertainty. This is evident with Russia’s recent annexation of Crimea, which has contributed to the Russian ruble and Russian stock market plummeting in March of 2014. The $500,000 EB-5 investment now costs up to 50% more in rubles than it would have just a few years ago. Fortunately, many wealthy Russians who qualify for the EB-5 Visa maintain dollar and/or Euro currency accounts outside of Russia.

With the recent U.S. sanctions in place, can Russian investors expect other uncertainties during the EB-5 investment visa process?

On its face, it appears that unless the EB-5 investor is part of President Vladimir Putin’s “inner circle”, most EB-5 clients will not be directly affected by the sanctions.  However, although the sanctions appear insignificant to most individuals in Russia, recent sanctions against Bank Rossiya for example, prompted Standard & Poor’s (S&P) rating agency to downgrade its outlook for the lender from stable to a negative rating.  As a result, the S&P foresees a deterioration of the bank’s future business and financial profiles. Further, Bank Rossiya can no longer engage in dollar-based transactions, and western banks will not be able to engage in business with them.  This has created immense economic uncertainty in the country. 

The sanctions on Bank Rossiya were meant to directly impact Putin and other top government officials. The actual ramifications to potential investors is beginning to become evident. Economists predicted correctly that the crisis over Crimea would tip the Russian economy into a recession in 2014, which should serve as a push to potential EB-5 Investors to leave Russia sooner.

For more information on obtaining your EB-5 Visa, contact Washington, DC EB-5 lawyer Kyle Barella.  Our office is equipped to handle EB-5 clients in English and Russian.

Kyle Barella - General Counsel, P.C. | +1 (202) 621-3198 | [email protected] | www.eb5investmentlaw.com | www.generalcounsellaw.com


The Information contained in this blog is for information purposes only, and should not be considered legal advice for any individual case or situation.  The information provided is not a substitute for consultation with an attorney.  No attorney/client relationship is created by the information contained herein.

Does the EB-5 program allow potential immigrants to “cut” to the front of the immigration line? The answer is a definitive, no.  Believed by many to be a shortcut to US permanent residency, the EB-5 program is not a line-cutting program.  In fact, the US Government sets aside each year, 10,000 visas for EB-5 investors.  Of the 10,000 visas, 3,000 are set aside for investments made in Target Employment Areas (TEA).  

As the government specifically sets these visas aside, it’s not possible for EB-5 investors to steal visas from other immigrants or jump to the front of the line.  Compared to other countries around the world that utilize a point system for immigration, the United States does not have such a program.  Unless a potential immigrant has a job or family member available to sponsor them, there are limited options for obtaining US Permanent Residency.  

The EB-5 Visa Program allows these immigrants with limited options to legally move to the US.  This misconception that EB-5 investors “buy” their way into the US at the expense of immigrants of lesser means is outdated and simply incorrect.  The government implements visa quotas, which allow each visa category a limited number of spaces.  

The benefits of the EB-5 program provide immigrants with a chance to live, work and study in the US, with the added benefit of their investment contribution leading to the growth of the US economy.  

Barella Law, LLC | + 1 (202) 621-3198 | [email protected] | www.eb5investmentlaw.com
9128 Strada Place | Suite 10115 | Naples, FL 34108

The Information contained in this blog is for information purposes only, and should not be considered legal advice for any individual case or situation.  The information provided is not a substitute for consultation with an attorney.  No attorney/client relationship is created by the information contained herein.

By Anna Barella | CHOICE INVESTMENTS | www.adviseusa.com

Earlier this week the team at Choice Investments attended a business-networking event hosted by the Québec-Florida Chamber of Commerce.  At the event, we met local business owners originally from Québec, Canada now doing business in Florida, and in some cases those who still operate a business back home. The Québec – Florida Chamber of Commerce offers local and Québec businesses a unique ability to grow their business both in Florida and Québec.  

Each year, Florida welcomes over 800,000 snowbirds from Canada, and nearly a quarter of them hail from the Province of Québec. Every winter they typically spend anywhere between one and six months enjoying Florida’s beaches, shopping, dining and great weather.   Many also invest in real estate, both residential and commercial properties. 

Last year alone, Canadians contributed over $4 billion to Florida’s economy. Many choose to legally reside permanently in Florida, either by immigrating or opting for non-immigrant status such as the TN or E-2 visa. Should the US Government pass the Immigration Reform bill, many Canadians will be allowed to stay in the US for up to eight months out of the year. 

The EB-5 Immigrant Investor Visa remains popular among Canadians wishing to permanently immigrate to the United States.  By becoming a US permanent resident, the investor is able to take full advantage of business opportunities in the US and back in their native Canada.  We saw first hand the success of Quebeckers creating a cross-border life for them self.  Ultimately both the Province of Québec and the State of Florida benefit economically from entrepreneurial endeavors of the Québécois.