Who’s Looking Out for the Investor? Part 3

In the most recent blog, we discussed an example case in which the immigration lawyer was acting in the best interest of the regional center and developer, and many investors lost their immigration benefit and all of their money.  During this case, the developer has continued to spin a story that he will sell the company and recoup money for the investors, but only if they remain quiet.  The migration agents have dutifully passed along this information.  The investors have been sufficiently scared away from protecting their interests, and at the same time they do not know who they can trust to help them.

This is not how the United States’ legal system is supposed to work.

The Investor’s Best Interest

When an individual hires a lawyer, that lawyer should be dedicated to representing that individual, and advising the individual as to his or her best interest.  While there are some circumstances where a conflict of interest or potential conflict of interest can be disclosed and waived, it is never okay for a lawyer to be in the position of giving advice when the advice will inherently be bad for one client and good for another.  It is extremely troubling that the immigration lawyer in the case we discussed previously, advised clients against the use of an escrow account for their funds to be invested in the NCE.

Relying on Immigration Attorneys

It is clear that placing funds in escrow pending adjudication of an I-526 is permissible under USCIS guidelines and regulations, provided that the only condition on the release of funds to the NCE is approval of the I-526.  Further, it is industry standard to utilize escrow accounts in this manner.  The lawyer has no reason, other than to benefit the regional center and NCE to advise his investor clients to forego the use of an escrow account.  If he was asked to do so by the regional center, he was likely required to withdraw from all representation pursuant to the Model Code of Professional Responsibility.

Further, immigration attorneys who handle EB-5 cases typically terminate representation as early as possible.  While this makes sense from the standpoint of specialization, it leaves the immigrant investor with nowhere to turn if something is wrong or if the investor has questions about the investment.  Even if the investor can call his or her immigration attorney for a referral, the investor by the very nature of EB-5, likely has little or no understanding of the American legal system, how it works, or which questions to ask.  This is only complicated by the fact that their attorney may still be working for the regional center also.

The Investor Needs Trust

Immigrant investors deserve more.  They should look at retaining a lawyer to handle their I-526 as more than paying an attorney for a discrete service.  Instead, the immigrant investor should consider entering into a long term relationship, built on trust, with his or her attorney.  This long term relationship should have clear bounds, and provide the investor with continued access, and repeated reviews of the project, the investment and the case status between the date of retention and the approval of the I-829.  The investor should demand an attorney that can provide both legal and business counsel, as well as EB-5 related immigration advice and counsel.  Most importantly, the Immigrant Investor should demand fierce loyalty and independence on the part of his or her lawyer.

Oppenhuizen Protects the Investor

At Oppenhuizen Law Firm, PLC, we take relationships seriously, and we believe that our primary purpose is to protect the immigrant investor’s rights both in the immigration system and in his or her investment.  We believe that the EB-5 program is a great program for the Immigrant Investors, for the United States and for developers and entrepreneurs throughout our country.  However, strengthening investor protections is very important to the integrity of the program.  Clear regulations of the industry including requirements that broker dealers be involved, increased SEC oversight, better anti-money laundering protections are all helpful; but without ensuring that the immigrant investor has a legal advocate protecting his or her interests, all of the regulation in the world does not add up to appropriate protection.

Please review Oppenhuizen Law Firm’s due diligence and immigrant application services brochures and call, email or text message us via WeChat or WhatsApp for more information and to discuss your case.