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Who’s Looking Out for the Investor? Part 2

Who’s Looking Out for the Investor? Part 2

Empty courtroom ready for the next immigration law case.

The investor holds the money, which means that, although it often does not feel like it, each investor has the power in his or her transactions with regional centers and developers, at least at the onset.  Today, there are far more EB-5 projects than could be financed given the limitation on visas available in the EB-5 program.  That means that each project is fighting for funding from a limited pool of investors.  While that should put the investors in the driver’s seat, often the opposite is true.

Where The Power Lies

The regional centers and developers, through their migration agents, generously offer to provide you with an immigration lawyer (or at least a recommendation), and handle all sorts of matters to make things easier for the investor.  While these offers do make the investment and the transition to the United States easier, they also shift the power in the relationship back to the regional center and developer.  Further, in really egregious cases, the offer of help is really designed to take advantage of cultural differences, and an understandable lack of knowledge on the part of the investor of the United States’ legal system.

Trusting The Attorney

The investor’s attorney should be solely on the investor’s side.  An attorney is an advocate for his or her client and the investor should expect nothing less from his or her attorney.  Further, the attorney should never be in the untenable position of deciding what advice to provide on topics on which his or her two clients are at odds.  By way of example, I recently reviewed a case in which the investor was “assigned” an attorney to handle the investor’s I 526, and advise the investor on immigration matters.  The attorney was in the same building as the regional center and developer, and encouraged investors not to utilize an escrow account, instead suggesting that the investors put their money directly into the NCE.

Thinking that the attorney was looking out for the investors’ interest, most investors did not utilize the escrow account, which came with an additional $1,000 fee.  Not surprisingly, when I 526s started to be denied, despite the project documentation calling for the return of the investors’ money, there was no money available to repay the investors.  Amazingly, any immigration attorney who had bothered to look into the project documents at all should have realized that there was a high likelihood that the I 526s would be denied.  But the immigration attorney had not bothered to look at the documents, or turned a blind eye to the problems, all the while responding to requests for evidence on related I 829 petitions (from earlier traunches of investment) related to use of funds and job creation, in a manner inconsistent with the I 526 petitions he was filing.  

The Change From Within the EB-5 Industry

The EB-5 industry, as a whole, is a good industry and does a lot of good for the country, but small changes in the system or in how investors approach their investments and their immigration would go a long way to root out the fraud that is so painful for the industry and the investors.

Oppenhuizen Law Firm, PLC offers a package of services including a complete due diligence report on the project in which the investor chooses to invest, completion of the I-526, with expert compilation of the source of funds report, an annual review of the project financials (to the extent they are available), and completion of the I-829 petition for removal of conditions.  This package is offered for one flat fee.

Oppenhuizen Law Firm, PLC is dedicated to protecting investors, to partnering with them, and forging a strong relationship with each client.  We offer add on services, such as quarterly financial reviews, physical visits to project sites, meetings with regional center and developer representatives during the investor’s investment period.  Each investor can rest assured that during the time period while Oppenhuizen Law Firm, PLC represents the investor, if it seems that something is wrong with an investment, we will be available to address the problems in accordance with the investor’s will.