WASHINGTON (AP) — Chinese investors seeking green cards to live in America run the risk of being defrauded under a loosely regulated visa program, according to a report Thursday from a federal watchdog.
The US-China Economic and Security Review Commission raises questions about America’s EB-5 visa programme, which grants green cards to foreigners in return for investments of $1 million — or just $500,000 in high-unemployment or rural areas. Local government officials are supposed to vet the investors and their projects before visa applications are approved.
“The program has been flooded by Chinese applicants,” the report found. “Instances of fraud and lax regulation have cast doubt on the ability of local authorities to screen Chinese EB-5 investors properly.”
The commission cites the case of a real estate developer indicted last year on charges of duping 290 Chinese investors into sinking money into a fraudulent $912 million hotel complex outside Chicago. In South Dakota, a state official committed suicide in 2013 after coming under investigation for mismanaging Chinese and South Korean EB-5 investment funds connected to a failed beef-packing plant.
Started 24 years ago, the EB-5 has only recently begun to attract intense interest in China, where investors and business owners are worried about a cooling economy and a crackdown on corruption. Many are also eager to take advantage of a strengthening US economic recovery.
EB-5 investors are issued conditional green cards valid for two years. To gain permanent residency, they must submit proof before the green card expires that they have established a “commercial enterprise,” invested the required amount of money and created jobs.
Many foreign investors seek help from 617 Immigrant Investor Regional Centers nationwide to identify projects that qualify for the visa program. The investors are often under the mistaken impression that the centres are sponsored by the government. In fact, although they need government approval to get the “regional centre” designation, they are private, for-profit operations.
The Securities and Exchange Commission and the US Citizenship and Immigration Services have jointly said they have no “view on the quality” of the investments the centres are promoting.