Thursday, September 29, 2016

EB-5 regional center program extended until Dec. 9

The House gave approval Wednesday to an already Senate-approved continuing budget resolution that would extend the EB-5 regional center program until Dec. 9, and avoid a government shutdown.

Saturday, September 17, 2016

EB-5 bill is a mixed bag but won't become law

Rep. Bob Goodlatte, chairman of the House Judiciary Committee, has introduced a bill that targets the so-called "EB-5 Program" for foreign immigrant investors. It has some good provisions in it, some bad provisions, but is not likely to become law.
Congress has shown the American people over and over again that it will not do anything about immigration -- legal or illegal -- so the bill has little chance of becoming law. I would not be surprised if the chairman gets a favorable vote in the House Judiciary Committee, but in my view it goes no further.
What is likely is a reauthorization of the EB-5 Program for three to five more years in the Continuing Budget Resolution, and that will likely occur in the first week or so in December before this session of Congress adjourns sine die.  You heard it here first.

Tuesday, July 5, 2016

Alleged fraud uncovered in California regional center

Merced (California) County Superior Court Judge David Moranda ruled May 31 that a felony criminal case involving Sierra Academy of Aeronautics and KS Aviation co-owner Daniel B. Yoon, 66, must proceed to trial.
Yoon is facing two counts of fraud (intent to defraud) and two counts of falsification of corporate documents.
Prosecutor Walter Wall said in court that accusing him of falsely using the name of the flight school’s second owner, John Yoon (no relation), while applying for a $3 million loan from the Small Business Association and forging documents diminishing the percentage of ownership in Dan Yoon’s favor. He said the alleged illegal loans where used to purchase a flight simulator from the Boeing Aircraft Corporation, which is a critical component of the flight school’s pilot training program.
Last January, federal agents from the U.S. Treasury Department raided the Atwater flight school as part of a federal investigation.
Daniel Yoon is facing a host of legal problems in civil court.
John Yoon is suing Daniel Yoon in a fight for control over the flight school, which was established in the Bay Area and moved to Castle in 2004.
The civil lawsuit between John Yoon and Daniel Yoon is ongoing.
The Sierra Academy of Aeronautics is a school that trains commercial pilots for several Asian commercial flight companies.  Daniel Yoon owns a regional center called Sierra Air Center Development, LLC, which was established to provide flight training.  His regional center is under investigation by U.S. Citizenship and Immigration Services, and was moved to Castle, CA, several years ago.

Thursday, June 23, 2016

EB-5 is about job creation

The words I am hearing from our politicians make little sense. If I need a job, I am going to where the job is. I don't care if the job is in an "affluent" area or not. A job is a job.

Thursday, June 2, 2016

EB-5 fraud case uncovered in southern California

SEC Halts EB-5 Scheme Stealing Investments in Cancer Center

Washington D.C., June 2, 2016 — 
The Securities and Exchange Commission today announced fraud charges and an asset freeze against a husband and wife accused of misusing two-thirds of the money they raised from investors for the purpose of building and operating a new cancer treatment center that would use proton beam radiation to help oncology patients in Southern California.
According to the SEC’s complaint unsealed today in federal court in Los Angeles, Charles C. Liu and Xin “Lisa” Wang raised $27 million for the proton therapy cancer treatment center from 50 investors in China through the EB-5 immigrant investor program.  They touted in promotional materials that the project would create more than 4,500 new jobs and have a substantial impact on the local economy while giving foreign investors an opportunity for future U.S. residency.  But presently there is no construction at the proposed site after more than 18 months of collecting investments.  Liu meanwhile has transferred $11 million in investor funds to three firms in China and diverted another $7 million to his and his wife’s personal accounts.
In granting the SEC’s request to freeze the assets and accounts of Liu, Wang, and related entities, the court’s order prohibits them from raising further money from investors or spending remaining funds.
“We allege that Liu and Wang are using investor funds as their personal piggy bank and exploiting Chinese residents who were assured they were investing in an innovative project to create jobs and cure cancer patients,” said Michele Layne, Director of the SEC’s Los Angeles Regional Office.
According to the SEC’s complaint, one of the websites Liu and Wang have used to promote investments in the cancer center project includes a section entitled “Government Support” with photos of former president George Herbert Walker Bush and former California governor Arnold Schwarzenegger.  Their photos are accompanied by what appear to be letters they wrote in support of proton therapy in general rather than the depicted EB-5 project, which had not even been initiated at the time the letters were written. 
The SEC’s complaint names Liu and Wang along with the companies behind the EB-5 project: Pacific Proton Therapy Regional Center, Pacific Proton EB-5 Fund, and Beverly Proton Center LLC.  They are charged with violating antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.  The SEC seeks preliminary and permanent injunctions as well as the disgorgement of ill-gotten gains plus interest and penalties. 
The SEC’s investigation was conducted by Tony Regenstreif and Lorraine L. Pearson and supervised by Victoria A. Levin of the Los Angeles office.  The SEC’s litigation will be led by John Berry.  The SEC appreciates the assistance of U.S. Citizenship and Immigration Services.

Thursday, April 21, 2016

Why was nothing done about the South Dakota beef packing plant meltdown?

Source:  Dakota Free Press

Among the unsolved mysteries of South Dakota’s EB-5 scandal is how $167 million in state subsidies and private capital, including $95 million in EB-5 visa investment money, could have disappeared into Northern Beef Packers, a beef plant that took six years to build, ran nine months before going bankrupt, and then sold at auction to a clever investor for a mere $4.8 million—literally, pennies on the dollar.

We may find an answer to that mystery in Vermont, where state officials allege that developers Ariel Quiros and Bill Stenger used EB-5 money for something other than the EB-5 projects with which they lured their foreign investors:

Governor Peter Shumlin, Department of Financial Regulation (DFR) Commissioner Susan Donegan, Attorney General William Sorrell, and Agency of Commerce and Community Development (ACCD) Secretary Patricia Moulton announced on April 14 that the State and U.S. Securities and Exchange Commission (SEC) have filed similar civil actions alleging investor fraud dating back to 2008 at EB-5 development projects run by Florida resident Ariel Quiros and Bill Stenger….

From his very first contact with Jay Peak in 2008, Quiros “improperly” and with Stenger’s assistance, bought Jay Peak Resort with a substantial amount of EB-5 funds. AnC Bio, meanwhile, was to be a $110 million, medical clean-room EB-5 project originally set to open this fall. The SEC alleges that AnC Bio, the last of the approved projects, was a virtual ATM machine for Quiros.

…The complaints allege that Quiros and Stenger misused more than $200 million of investor funds intended for EB-5 development projects in northeastern Vermont. The cases further allege that Quiros misappropriated an additional $50 million of investor funds for his own personal use. According to the allegations, investor funds were unlawfully diverted, or misused, between and among various EB-5 projects over many years.  In addition, Quiros’s alleged misappropriations of investor funds for personal use include: over $2 million to purchase an apartment at Trump Place in New York City; millions of dollars to pay personal income taxes and other personal expenses; and over $20 million to purchase Jay Peak and Q Burke Resorts [Source:  Timothy McQuiston, “State Files Suit Alleging Investor Fraud at Jay Peak, Inc EB-5 Projects,” Vermont Business Magazine, 2016.04.14].

Stenger and Qiros are accused of using a complex web of corporate entities to cover their misappropriations. That sounds much like how Joop Bollen structured his state-approved EB-5 scheme.  Perhaps South Dakota Attorney General A.G. Jackley will trace those intricate money paths back through Northern Beef Packers and all the way to Cyprus and Russia.

Democratic U.S. Senator Patrick Leahy spoke Thursday to demand reform in the EB-5 program. Sen. Patrick Leahy (D-Vermont) has worked with his Republican colleague from Iowa, known EB-5 watchdog Sen. Chuck Grassley (R-Iowa), to bring more accountability to EB-5. The Senate passed an EB-5 amendment in 2013, but the GOP House refused to take the matter up for a vote. Rep. Kristi Noem, what’s that you said about wanting EB-5 reform?

Vermont and South Dakota are the only two states that have run EB-5 Regional Centers themselves rather than leaving it entirely to private companies. Yet these state-run programs seem just as susceptible to fraud and corruption as numerous privately-run EB-5 programs in other states.

Saturday, April 16, 2016

Vermont Regional Center meltdown

I guess I have decided to wait and see what happens, but there have been a deluge of calls and email messages regarding the SEC investigation into Jay Peak Resorts and the Vermont regional center.

Let's just try to do the best we can.

Boyd Campbell