A lawsuit claims an EB-5 center defrauded investors of $57 million. The center, located in New York, states investors know and understand the related risk of these investments. Further, the center states the investors successfully applied for U.S. green cards through the program, achieving that goal.

The New York City Regional Center rebuffed claims that dishonesty played a role at any time during the project. The funds were used to upgrade an existing facility, which was completed, and the investors either have a green card or have an application submitted for the green card. Therefore, the investors’ funds were used for the purpose specified, and green cards are received or in process, showing no validity to the claim of fraud.

The investors filed the lawsuit in August 2022, claiming the regional center did not accurately present the safety of the investment nor the total funds needed to complete the project. As such, the investors claim the center did not protect their interests as loans were defaulting as the center received $20 million in administrative fees.

The EB-5 program allows foreign investors who fund qualifying projects to apply for a green card or permanent resident status. Each project must be approved, and the overall program is managed by regional centers. The centers regularly receive compensation, or administrative fees, for managing the projects. As the investors successfully received or are in the application process for their green card, the program was fulfilled, per the center. Therefore, there is no basis for the lawsuit. They further point out that the lawsuit missed the statutory deadline. For New York, there is a six-year limitation for claims of fraud or two years from when a reasonable person could discover or suspect fraudulent acts. The investment at the basis of the lawsuit began in 2014 with no investors identifying any issues at the time of signing. Finally, the EB-5 center states the investors are sophisticated with a minimum of $5 million in funds for other investments.

If you have questions about the EB-5 program or any other immigration-related issue, contact us at ILBSG.

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