Saturday, July 1, 2017

Special report: EB-5 reforms face major hurdles

(Source: In early March, the two elder statesman of the Senate Judiciary Committee ventured across the Capitol to the House of Representatives. They were there testify about the many problems with the EB-5 immigrant investor visa program, which has been exploited by developers from the sunny streets of Beverly Hills to Manhattan and the northern mountains of Vermont.

Sens. Patrick Leahy and Charles Grassley have been fighting to reform the EB-5 program for years now. Leahy, Vermont’s senior senator, and Grassley, the senior Republican from Iowa, have long shared a friendship and a willingness to work together. And in testimony before the House Judiciary Committee in March, the two shared the same message with House members: Change the EB-5 program, or let it die.

The immigrant investor visa program grants permanent residency to foreigners who invest $500,000 in U.S. businesses in economically distressed rural areas (the minimum investment for urban areas is $1 million). Each investment must create 10 jobs. Fraud in the EB-5 program has been rampant, and Leahy has been critical of a lack of federal oversight.

Leahy’s own state is home to the largest fraud in the history of the national program. Last year federal regulators charged the developers of Jay Peak with 52 counts of securities fraud and the misuse of $200 million. More than 800 investors from 74 countries were allegedly defrauded.

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