Reported in Bloomberg Business
The U.S. Securities and Exchange Commission is expanding a crackdown on a little-known program to dole out visas to wealthy foreigners in exchange for investments that generate jobs.
The SEC is preparing sanctions against as many as two dozen immigration lawyers, people familiar with the matter said, for collecting deal fees from foreign investors trying to access the EB-5 visa program, which grants U.S. residency for $500,000 investments that create 10 jobs.
The lawyers were prohibited from earning transaction fees because they weren’t registered as brokers, according to the people, who asked not to be named because the investigations aren’t public.
The EB-5 program has been scrutinized by federal agencies in recent years for potential security risks and investment fraud. The SEC has taken action before. The agency halted an alleged $158 million fraud in 2013 in which a Chicago man duped almost 300 investors into believing that they would win visas by backing his project to build a hotel. The project never came to fruition and the promoter was indicted last year.
USCIS administers the Immigrant Investor Program, also known as “EB-5,” created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign investors. Under a pilot immigration program first enacted in 1992 and regularly reauthorized since, certain EB-5 visas also are set aside for investors in Regional Centers designated by USCIS based on proposals for promoting economic growth.