Friday, April 21, 2017

As deadline nears, EB-5 bills start hitting lobbyists’ inboxes

(Source: The Real Deal) After months of close to no action, senators are finally updating their proposed reforms to the controversial EB-5 investor visa program and circulating draft legislation ahead of an April 28 expiration date. On Tuesday, the offices of Sen. Patrick Leahy (D-VT) and Sen. Chuck Grassley (R-IA), two of the EB-5 investor visas’ loudest voices for reform, began shopping a tweaked draft of a bill they introduced in the previous Congress. Though still far away from where much of the real estate industry stands on EB-5, it does include some provisions that reflect changes that real estate lobbyists have said they could live with. Although the Department of Homeland Security under President Obama set forth a proposal to raise the minimum invest for a visa from $500,000 up to $1.35 million, Grassley and Leahy’s current legislative proposal would would usher in an $800,000 minimum.

That’s likely an acceptable figure for many EB-5 stakeholders: In a March 8 hearing in the House Judiciary Committee, Angelique Brunner, the president of EB5 Capital and EB-5 Investment Coalition’s spokesperson, said she was hoping to see legislation that would result in a minimum much lower than $1.35 million and more in the neighborhood of $1 million. She previously said that the Obama-recommended minimum of $1.35 million would “kill the program.” The bill also includes integrity measures that appear universally well received, such as requiring routine audits of regional investment centers to check for compliance with SEC regulations.        See full report here.

Wednesday, April 19, 2017

New EB-5 Draft Bill potential impact on Chinese Market

Senator Grassley and Senator Leahy introduced a new rough draft of “American Job Creation and Investment Promotion Reform Act” on April 15, 2017. The updated bill would provide incentives to rural communities, priority urban investment areas, infrastructure projects and manufacturing projects. The overall perception of the updated draft is very positive in the Chinese marketplace. The increase of investment capital to $800,000 and $1,000,000 would change the EB-5 investors market especially in China. As China’s middle class continues to struggle to find capital at the current $500,000 level, the new bill would make the new EB-5 Program a true investment program for only high net worth individuals. This would result in a more sophisticated investor market and an overall smaller market size. The smaller market size would mean fewer investors but also a shorter waiting period for the current visa backlog.

The visa set asides for rural areas and priority urban investment areas change the focus of the EB-5 Program back to the intent of the original legislation. An increase in transparency, integrity enhancements and restriction of foreign involvement in the program will create a positive reputation for EB-5 program across the world. The potential impact in the Chinese market would be very positive and would provide certainty for the next 3 years. The proposed draft bill is well received by Chinese migration industry.

We will continue to monitor the new bill as there are only a few more working days in congress until the EB-5 Program expires on April 28th.  

Join us in Chicago on June 6 to discuss the latest trends and regulations on Chinese outbound investment, register at http://2017investusa.eventbrite.com

Tuesday, April 18, 2017

Update on EB-5 legislation

(Source: Greenberg Traurig) As April 28, 2017, approaches we are seeing the release of edits to proposed draft bills from the last session of Congress. Just today, Senator Patrick Leahy (D-VT) and Senator Charles Grassley (R-IA) circulated a staff draft very similar to what was circulated in December 2016. We do expect to see other drafts being circulated from other members of Congress and we will be working with all EB-5 stakeholders on a potential EB-5 compromise. It appears that the April 28 expiration of the program will be extended for a few weeks in the short-term (maybe as long as four weeks) as Congress works on other issues that need to be addressed to keep our government open and funded. As you know, the comment period for the proposed EB-5 regulations has been closed as of April 11.  It is possible that EB-5 legislation will be passed before the regulations are implemented.

Sunday, April 16, 2017

Raymond James Firm to Pay $145.5 Million to Settle Vermont EB-5 Suit

(Source: Seven Days) A $145.5 million settlement with the financial services firm Raymond James & Associates will allow scores of Vermont contractors and foreign investors to be paid for losses related to Northeast Kingdom EB-5 development projects, officials announced Thursday evening.

The announcement came a year after federal and state prosecutors levied fraud charges against Jay Peak developers Ariel Quiros and Bill Stenger, alleging they misappropriated $200 million raised through the federal EB-5 immigrant investment program. See story at http://www.sevendaysvt.com/

Thursday, April 13, 2017

Five Things to Know about Senator Rand Paul’s Proposed New EB-5 Bill (It’s Well Thought out)

(Source: Wolfsdorf Rosenthal) On March 27, 2017, Senator Rand Paul (R-KY) introduced a well-thought out new EB-5 bill in the U.S. Senate, S.727 –  called the “Invest in Our Communities Act”. The bill seeks to increase the worldwide level of employment-based immigrants to the U.S. and to reauthorize the EB-5 Regional Center Program.  The EB-5 bill has been referred to the U.S. Senate Committee on the Judiciary and is one of many pieces of legislation on EB-5 being considered. Senator Rand Paul gets it. This bill will not only reform the program but invigorate it by providing a well-thought out long term solution. With 42,647 I-526 petitions filed since Fiscal Year 2014 and pending, over $21billion has been invested in the U.S. economy creating hundreds of thousands of jobs and allowing hundreds of projects to move forward.(The 3,955 petitions that have been denied or withdrawn have been deducted).

Senator Paul has got it right. This bill fixes the program but doesn’t throw the baby out with the bath water. Because Rand Paul is a powerful senator, hopefully this proposal will be taken seriously, as it offers the best solution to the problem of the visa backlog for Chinese EB-5 investors.  However, it is presently not likely to be the main EB-5 reform bill; that will likely come from Senator Grassley (R-IA), with Senators Cornyn (R-TX) and Schumer (D-NY) as supporters.  Congress appears to want to reform the EB-5 Program prior to expanding its use, so once those other difficult issues are resolved (minimum investment amount, TEA reforms), there may more EB-5 visas in the future.
Here are 5 things to know about the new proposed EB-5 bill.
  1. Permanent Reauthorization of the EB-5 Regional Center Program. The bill would amend section 203(b)(5) of the Immigration and Nationality Act to permanently reauthorize the EB-5 Regional Center Program.  This is an important development, as it shows that members of U.S. Congress continue to support the job creation program, and also provides the needed stability to the EB-5 Regional Center Program that has been lacking in the past 3 years.
  1. Exclusion of EB-5 Visas from Country Caps. The bill would exclude EB-5 visas from counting towards the “per country” numerical limitations of either 7% (in the case of a single foreign state) or 2% (in the case of a dependent area).  This could shorten the amount of time it currently takes Chinese EB-5 applicants to enter the U.S. after their respective Form I-526s are approved.
  1. Preapproval of New Commercial Enterprises. The bill would require USCIS to establish a “preapproval procedure” for new commercial enterprises (“NCEs”) to obtain USCIS approval prior to submission of any Form I-526 petitions by EB-5 immigrant investors. This would be optional for NCEs, not required.  USCIS would then be required to make a determination on the proposal within 180 days after filing, or to issue a request for evidence (“RFE”) within 30 days after filing.
  1. EB-5 Regional Center Restrictions and Compliance.  The bill includes “integrity measures” that would prevent individuals with prior criminal or civil violations related to fraud or deceit from being associated by an EB-5 Regional Center, NCE, or job creating entity.  It would require all principals or administrators of an EB-5 Regional Center to be U.S. nationals or green card holder.  Additionally, no foreign government entity may be directly or indirectly involved with the ownership or administration of an EB-5 Regional Center.
  1. EB-5 Regional Center Termination. The bill would authorize USCIS to suspend or terminate the designation of an EB-5 Regional Center or impose other sanctions against an EB-5 Regional Center if there are securities law-related issues such as fraud, misrepresentation, or deceit associated with the EB-5 investment offering.
This is a solid bill and is exactly what we need to reform and revitalize the EB-5 Program Visa.  We are hopeful that a consensus on these issues can be reached by U.S. Congress and EB-5 stakeholders to continue this job creation program’s positive effects on the U.S. economy.   We also hope that the Trump Administration with its knowledge in this arena will endorse and support this bill.

Chinese executives visit projects in Dallas, Texas

Artisan Business Group arranged business tours for a group of executives visiting from China. The group toured multifamily housing owned by JPI and a hotel project inside the Dallas Greater Area. The main interest of the organized delegation is to explore Private Equity projects in prime US cities.

Tuesday, April 11, 2017

Artisan Business Group hosts US Opportunities Summit

The 2017 US Opportunities Summit was held in Dallas, Texas on April 11th. Over 20 professionals from China attended the conference to explore investment and real estate opportunities in the US. There will be on-site visits, real estate tours and networking events scheduled during the next two days. We would like to thank our sponsors JPI and MacDonald Realty.

Monday, April 10, 2017

Trump to nominate DHS official to lead US Citizenship and Immigration Services

(Source: Washington Examiner) President Trump announced Saturday that he intends to nominate Lee Francis Cissna, an immigration policy director at the Department of Homeland Security, to lead U.S. Citizenship and Immigration Services.

Cissna has served in the foreign service in Haiti and Sweden, and also worked in the Office of the Chief Counsel at USCIS, the White House said in an announcement.

Cissna's nomination comes as Trump continues to fill up high-level positions at federal agencies. The administration had initially been slow to fill many open jobs because of the difficulty Republicans had confirming members of Trump's Cabinet.

Trump has focused heavily on immigration enforcement in the first 11 weeks of his presidency. He has directed DHS Secretary Kelly to step up security at the border and to prioritize the deportation undocumented immigrants who have committed crimes.

Senate and House Ranking Judiciary Members pen letter to Top Congressional Leaders

The Highest Ranking Judiciary Members of Congress joined in writing a letter to top Republican and Democratic Senators and House Representatives to make a statement on EB-5 re-authorization. The EB-5 Regional Center expires April 28, 2017. The letter stated that Judiciary leaders do not approve of a clean extension of the EB-5 Program. They want meaningful reforms with any extension of the EB-5 Program and without reform, the program should expire. 

Friday, April 7, 2017

Mend, Don’t End, the EB-5 Program

(Source: InsideSources) Washington can be a tough place to read. Even so, there’s a policy debate at hand that I find puzzling. We have a new president who has boldly promised to create 25 million jobs over the next decade and a conservative Congress deeply concerned with reducing the tax burden on the American people and addressing the national debt. And yet there is a federal program on the books right now that answers all calls but faces possible expiration on the eve of the Trump administration’s 100-day mark.  

Read the article by Angelique Brunner at http://www.insidesources.com/

EB-5 Fraud CIIF Search Warrant by FBI unsealed April 6, 2017

EB-5 Fraud CIIF Search Warrant by FBI is unsealed April 6, 2017, you can download the PDF copy at https://cbsla.files.wordpress.com/2017/04/eb-5-fraud-ciif-search-warrant.pdf

ABG to host 2017 New Regulations and Trends: China Outbound Investments Seminar

2017 New Regulations and Trends: China Outbound Investments Seminar (中国对外投资的新与新趋势)is taking place on June 6, 2017 in Chicago, Illinois.  The much-anticipated Chinese outbound investment workshop will bring together executives and professionals for a day of high level discussion, peer to peer exchanges and one on one networking sessions. The workshop will focus on reviewing new regulatory changes, restrictions and alternative solutions. We will also cover some of the latest developments and issues of Chinese outbound investment.  

Program Topics:
  •  Xi-Trump Meeting and its impact on Sino-US relationship
  • "One Belt, One Road" initiatives & USA
  • Must-know trends for 2017 and beyond
  • New regulations and restrictions (to be effective July 1) on outbound investments
  • New trends in emerging industry sectors
  • New trends of EB-5 alternative financing under new legislation
  • Challenges and solutions for outbound investments from China

Please register online at https://2017investusa.eventbrite.com 

US busts fraudulent US$50m investor migration scheme for rich Chinese, including fugitives

(Source: South China Morning Post) Federal agents in California on Wednesday raided two homes and a business allegedly connected to a US$50 million visa fraud scheme that benefited up to 100 Chinese nationals.

Authorities said the key suspects in the case helped wealthy Chinese obtain residency visas in the United States in exchange for bogus investments. To read the report please click athttp://www.scmp.com/news

Thursday, April 6, 2017

Feds raid San Gabriel, Arcadia locations over visa-fraud scheme involving criminals on China’s most-wanted list

(Source: San Gabriel Valley Tribune) The FBI and federal immigration agents on Wednesday searched a hotel and two homes in the San Gabriel Valley for evidence related to an alleged $50 million visa fraud scheme that gave green cards to Chinese nationals, including criminals on China’s most wanted list. Agents served search warrants at an office located at the Hilton hotel at 225 West Valley Blvd. in San Gabriel, a house in a gated community in the 700 block of Carriage House Drive in Arcadia and a townhouse on Larry Beard Drive in South El Monte. Read story at http://www.sgvtribune.com/

Los Angeles Raids Target Investor Green Card Fraud

(Source: New York Times) Federal agents on Wednesday executed search warrants at several sites in greater Los Angeles that the authorities say were connected to a $50 million visa fraud operation that enabled Chinese citizens, including fugitives from the law, to secure green cards for permanent residency in the United States. The multiyear investigation, which used Mandarin-speaking agents, is the latest to highlight abuses in the EB-5 program, which offers foreign investors a fast path to a green card. The program is also the target of a crackdown by the Securities and Exchange Commission.

The search warrants include allegations of visa fraud, money laundering and “inducing foreigners to reside in the U.S. in violation of the law.” More than 100 people have been linked to the scheme, according to the Department of Homeland Security, which worked with the F.B.I. on the investigation. See report at New York Times.

Wednesday, April 5, 2017

Federal agents conduct raids in San Gabriel Valley in visa fraud investigation

(Source: KABC7) Federal agents have conducted several raids in the San Gabriel Valley on Wednesday as part of a visa fraud investigation, according to officials.

Agents with the FBI and Homeland Security Investigations executed search warrants at a San Gabriel business and at two homes, one in Arcadia and one in South El Monte, according to a U.S. Immigration and Customs Enforcement spokesperson.

A federal search warrant stated an investigation into California Investment Immigration Fund, which has a business office in the San Gabriel Hilton, was launched in 2013.  See report at http://abc7.com/

FreshDirect secures $85M in EB-5 financing for Bronx distribution center

(Source: The Real Deal) FreshDirect secured $85 million in EB-5 financing for its new Bronx distribution center, according to documents filed with the city this week. The financing for the online grocer’s planned outpost at 2 St Anne’s Avenue in Port Morris comes from the New York Regional Center, which provides EB-5 financing. The loan includes $27.5 million in new money and replaces $57.5 million from Signature Bank, documents show. Read the report at https://therealdeal.com

Congress Moves Closer to EB-5 Reform

(Source: National Real Estate Investor) Reforms to the EB-5 Immigrant Investor program is a can that Congress has been kicking down the road for the past two years. Despite growing optimism that comprehensive changes will be introduced this year, those changes likely won’t come in time for the next big deadline—the program’s April 28th expiration.

Both Republicans and Democrats agree that changes to the nearly 30-year-old program are needed. Yet coming to terms on new rules has proved to be a big stumbling block. Instead of passing a new bill, EB-5 has been receiving short-term, three- and six-month extensions since 2015 just to keep the program running. Read the report at http://nreionline.com/

Tuesday, April 4, 2017

June sentencing set for developer Dargey in EB-5 fraud case

(Source: The Seattle Times) Sentencing for Lobsang Dargey, the local developer who in January pleaded guilty to two felony charges related to raising money from Chinese investors, has been postponed until June. The hearing was originally scheduled for this week. Read the news report at http://www.seattletimes.com/

Monday, April 3, 2017

Stowe Aviation withdraws from Vermont EB-5 Regional Center

(Source: VTdigger.org) An airport operator in Stowe is pulling out of an agreement with the Vermont EB-5 Regional Center. Stowe Aviation had planned to use EB-5 immigrant investor funding, along with other private capital, to support infrastructure improvements, including a new terminal at the state-owned Morrisville-Stowe State Airport. The company signed an agreement with the state regional center in May 2014. See report at https://vtdigger.org/

JPI and MacDonald Realty Group to sponsor 2017 US Opportunities Forum


We thank our sponsors JPI, MacDonald Realty Group for sponsoring the 2017 US Opportunities Forum April 11-13th in Dallas Texas. The 3-day event will host a Chinese delegation to discuss wealth management, tax planning, private equity, real estate development and local residential real estate in Dallas, Texas. Dallas is one of the most popular destinations for Chinese investment in the last 12 months. To learn more about investments from China, contact us at http://www.ArtisanBusinessGroup.com

Sunday, April 2, 2017

Three things Congress should know about reforming the EB-5 program

(Source: The Hill) Amid the strident calls for reform or termination of the EB-5 investor visa program, there are some essential facts about EB-5 investors and the EB-5 investment market that should be considered, but have not been part of the debate.  These are facts that help explain why most EB-5 investors select large projects in big cities over small projects in urban areas, and what kind of reforms might change those incentives.  In addition, there are reforms that can and should be adopted to prevent the types of fraud that have tainted the EB-5 program, that are not included in the pending DHS regulations, but should be included in any EB-5 reform legislation. Read the blog at http://thehill.com/blogs/congress-blog/

Saturday, April 1, 2017

Mostly True: Leahy claim on immigrant investment through EB-5 program

(Source: PolitiFact) Democratic Sen. Patrick Leahy has called out an immigrant investor program as flawed and running counter to its intended purposes.

"The EB-5 program … was designed to bring jobs to underserved rural and urban communities. And for some time it did just that. But the program has strayed from these goals. It's a magnet for fraud. Security violations are common," Leahy said as a witness during a House Judiciary Committee hearing. "And the incentives that Congress created to promote investment in distressed areas had become obsolete due to economic gerrymandering."

Read the article at  http://www.politifact.com/