Why Some Regional Centers and EB-5 Projects Fail (Part # 3)

Hello and welcome to EB-5 Investment Report, I’m your host Aimee Rios and today we conclude our series on the EB-5 process, pitfalls and problems. In this edition we will discuss the I-829 and look into why some projects fail.

The 829 is the final petition for entrepreneurs to remove conditions on their permanent resident status and must be filed within 90 days prior to the two-year anniversary of the I-485 approval. Failure to file this in a timely matter may result in denial of conditional residence status and initiate removal proceedings.

It is at this stage that investors must demonstrate that the business plan they outlined in their I-526 is in motion. They must show that a new commercial enterprise has been established, that the foreigner is invested, or in the process of investing, that the investment and commercial enterprise have been sustained throughout the two-year conditional residence period, and that the investment created, or is expected to create at least 10 permanent full-time jobs; and this is where many investors run into trouble if they lack the proper professional guidance. Job creation methodology is probably the most important and complicated aspect of the EB-5 process. Currently, USCIS is being sued by a group of investors who are now facing deportation because of tenant occupancy issues. We spoke with Steve Anapoell corporate and securities attorney at a recent EB-5 seminar about the issues of job creation and tenant occupancy. (Steve Anapoell 6 minute mark).

At any point during the petitioning process, USCIS may send a REF, a request for evidence, if they feel an application lacks the proof needed for officers to fully evaluate an application or petition. That’s why the words Due diligence constantly come up when discussing EB-5, and if investors, developers and regional centers do not have the guidance of an expert to help them navigate through the process, they will surely fail. Brian Su of Artisan Business Group spoke with us recently about the main reasons projects and regional centers fail and the biggest challenges investors face. (Brian Su 1:30 minute mark)

For the most part, projects fail due to a lack of understanding the marketplace and not having the guidance of an EB-5 expert. Of course there are examples of project failures due to fraud and embezzlement, such as Mamtec International and the El Monte regional Center-which have tarnished the reputation of the industry, however, if the EB-5 program is properly structured, administered and regulated, and everyone involved does their due diligence, then the program will do exactly what it was intended to do: create jobs for the United States. I’m Aimee Rios and I want to thank you for watching this edition of EB-5 Investment Report.

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