Eb-5 Visa Program Fraud Prosecutions
Overview of EB-5 Visa Program Fraud
The EB-5 Visa Program allows foreign investors to obtain a U.S. green card by investing a minimum amount (typically $900,000 or $1.8 million) in projects that create at least 10 full-time jobs for U.S. workers.
Because large sums of money and immigration benefits are involved, fraud has been a recurring problem:
Misuse of investor funds (diversion or embezzlement)
False job creation claims
Fabricated or inflated project valuations
Submission of falsified documents to USCIS (U.S. Citizenship and Immigration Services)
Ponzi schemes using new investor money to pay earlier investors
These acts constitute violations of criminal statutes such as wire fraud, mail fraud, conspiracy, immigration fraud, and sometimes securities fraud.
Detailed Case Studies
1. United States v. Anshoo Sethi (Illinois, 2016)
Summary: Anshoo Sethi raised over $158 million from more than 290 Chinese investors for a hotel project near Chicago’s O’Hare Airport.
Fraudulent Acts:
Falsely claimed affiliation with major hotel chains.
Submitted fraudulent documents to USCIS.
Diverted investor funds for personal expenses.
Charges: Wire fraud, securities fraud, false statements.
Outcome: Pleaded guilty, sentenced to prison, and ordered to pay restitution.
Significance: One of the largest EB-5 fraud cases, highlighting how false claims about project viability and misuse of funds are prosecuted.
2. SEC v. Jay Peak, Inc. and Ariel Quiros (Vermont, 2016)
Summary: Involved $350 million raised for a ski resort and biomedical complex.
Fraudulent Acts:
Misappropriation of over $200 million of investor funds.
Operated a Ponzi-like scheme paying returns with new investor money.
Failed to deliver promised job creation or completed projects.
Charges: Securities fraud, wire fraud, money laundering, conspiracy.
Outcome: Ariel Quiros sentenced to over 5 years in prison; SEC recovered assets and obtained penalties.
Significance: Exposed large-scale systemic abuse and led to calls for EB-5 reform.
3. United States v. Victoria Chan and Tat Chan (California, 2017)
Summary: Father-daughter duo defrauded over 100 Chinese investors by promising investments in non-existent projects.
Fraudulent Acts:
Collected approximately $50 million.
Created fake companies and bank accounts to launder money.
Submitted forged immigration documents.
Charges: Conspiracy to commit visa fraud, wire fraud, money laundering.
Outcome: Pleaded guilty, sentenced to prison, assets seized.
Significance: Highlighted exploitation of investors’ immigration hopes via fraudulent regional centers.
4. United States v. Marco Ramirez (Texas, 2019)
Summary: Ramirez promised EB-5 visas to foreign nationals in exchange for investments in sham projects.
Fraudulent Acts:
Falsely claimed he had USCIS authorization.
Collected over $6 million from investors, used for personal expenses.
Charges: Wire fraud, immigration fraud, conspiracy, identity theft.
Outcome: Convicted, sentenced to 9 years imprisonment, ordered to pay restitution.
Significance: Showed clear fraudulent “phantom project” schemes targeting investors seeking green cards.
5. United States v. Zhang (Illinois, 2020)
Summary: Zhang and co-defendants promised U.S. residency through an EB-5 investment in a commercial project.
Fraudulent Acts:
Investor funds were not used for construction or job creation.
Submitted false filings to USCIS.
Created fraudulent business documents.
Charges: Visa fraud, conspiracy, wire fraud, false statements.
Outcome: Case ongoing; funds frozen.
Significance: Reflects DOJ and USCIS cooperation to combat fraudulent regional centers.
6. United States v. David Hu and Feng Tao (New York, 2018)
Summary: Hu and Tao solicited millions from investors for real estate developments that never materialized.
Fraudulent Acts:
Misled investors about project status.
Diverted funds for personal use.
Submitted falsified documents to immigration authorities.
Charges: Mail fraud, wire fraud, conspiracy, immigration fraud.
Outcome: Convictions secured, prison sentences imposed.
Significance: Emphasizes the vulnerability of immigrant investors and the federal response.
Legal Principles and Enforcement Patterns
Wire and Mail Fraud: Most EB-5 fraud cases involve communications across state lines (emails, phone calls, wire transfers), enabling federal jurisdiction.
Conspiracy Charges: Often co-defendants work together to deceive investors and authorities.
False Statements to USCIS: Submission of fraudulent evidence is a federal crime under 18 U.S.C. § 1001.
Securities Law Intersection: When investment contracts are involved, securities fraud charges apply.
Asset Forfeiture: Courts often order confiscation of ill-gotten gains to compensate victims.
Prison Sentences: Sentences vary but can exceed 5 years depending on scale and damage.
Summary Table
| Case | Charges | Outcome | Key Takeaway |
|---|---|---|---|
| Anshoo Sethi (IL) | Wire fraud, securities fraud | Guilty plea, prison, restitution | Largest hotel-related EB-5 fraud |
| Jay Peak / Ariel Quiros (VT) | Securities fraud, conspiracy | Prison, asset forfeiture | Major Ponzi-like EB-5 fraud |
| Victoria & Tat Chan (CA) | Visa fraud, money laundering | Guilty plea, prison, asset seizure | Fraudulent regional center operations |
| Marco Ramirez (TX) | Wire fraud, immigration fraud | Convicted, 9 years prison | Sham project EB-5 scams |
| Zhang et al. (IL) | Visa fraud, wire fraud | Pending | USCIS document fraud in commercial projects |
| David Hu & Feng Tao (NY) | Mail fraud, conspiracy, immigration fraud | Convictions, prison | Misuse of investor funds in real estate EB-5 |
Conclusion
The EB-5 program fraud prosecutions reveal significant risks for foreign investors seeking U.S. residency through investment. The federal government aggressively pursues such fraud via coordinated investigations involving DOJ, SEC, and USCIS. The cases illustrate:
The complexity of EB-5 fraud, often involving sophisticated schemes.
The range of criminal statutes applied to prosecute perpetrators.
The importance of investor vigilance and due diligence.
Impact on policy reforms to improve transparency and oversight of EB-5 regional centers.
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