Thursday, February 9, 2017

Sub-minimum investment amount needed for rural areas

Sens. Chuck Grassley and Patrick Leahy have proposed increasing the EB-5 Program minimum investment amounts to $800,000 (EB-5 projects in TEAs or rural areas) and $1.2 million elsewhere. DHS has proposed increasing these amounts even more to take into account inflation.
Most of the EB-5 investment capital, thus far -- some say as much as 90 percent -- has gone to huge real estate projects in so-called "gateway cities" in California, Florida, and New York. This leaves regional centers and EB-5 projects in rural areas out of the picture.
My regional center -- America's Center for Foreign Investment -- is a southeastern United States regional center. Most of ACFI's EB-5 projects are in rural areas. Trying to find investors for ACFI's projects -- although in growing industries -- is extremely difficult.
ACFI pursues industries I think are likely to be successful.  My regional center is active in affiliating independent- and assisted-living investment projects as well as manufacturers of modular homes and buildings made from hardened materials, such as steel and hardy plank, which resist hurricanes, tornadoes, fire and earthquakes.  These structures are ideal for the Gulf Coast and for tornado-prone areas of the United States.
ACFI would be delighted to entertain other manufacturing projects in rural areas of Alabama, Florida, Georgia, Mississippi and Tennessee (which is ACFI’s geographic area), but the EB-5 investment capital will not arrive because of the preponderance of EB-5 investment capital going to huge real estate projects in the gateway cities in California, Florida and New York.
To address this issue, I propose a minimum investment amount of $650,000 in rural areas, whether or not the location of the EB-5 project is within or outside a Combined Statistical Area or Standard Metropolitan Statistical Area (SMSA).  My rational for the former is that we have many cows and cow pastures in Montgomery County, where a manufacturing plant might be located, but the cow pastures are in an SMSA, so the current lower investment amount of $500,000 is not applicable unless the EB-5 project is within an area of high unemployment, defined as 150 percent of the national average (which fluctuates, of course).  The Office of Management and Budget has repeatedly written to Congress that SMSA’s are created for “statistical purposes only” and were not meant to enable a particular federal program to operate within or outside an SMSA
I feel confident that this lower minimum investment amount of $650,000, exclusively for rural areas, would substantially benefit manufacturing and agricultural industries in the southeastern United States, and create many more good jobs for U.S. workers and others within ACFI’s geographic area than the huge real estate projects in gateway cities.

Tuesday, January 10, 2017

Tuesday, December 27, 2016

Safe harbor: About fairness

As more EB-5 regional centers and projects fail, and as more fraud is uncovered, I reiterate my long-held notion that the EB-5 Program calls for a "safe harbor" for investors.  Consider this:
EB-5 investors have done everything the U.S. government has asked them to do.  They have placed their capital "at risk" in an EB-5 investment project for the purpose of creation of jobs and have filed an I-526 petition with USCIS.
But what if the EB-5 investment project fails?  What if the regional center fails?  What if someone runs off to the Cayman Islands with investors' money?  What if no jobs -- or not enough jobs -- for U.S. workers are created?  What if the investors cannot prove their entire $500,000 was invested "at risk" in the EB-5 project because no accounting records exist?  Most EB-5 investments use limited partnership, which means EB-5 investors have little or no control of the investment project.
A "safe harbor" would protect investors from deportion or removal, a harsh and unfair result currently of not proving the removal of the two "conditions" (1) that the full $500,000 was invested in the EB-5 investment project, and (2) that the project created 10 new jobs for U.S. workers.  In the case of a regional center project, indirect and induced jobs may be counted as well.
But now, when investors are unable to prove that the two conditions were met, USCIS places the investors and their family members in deportation (or removal) proceedings.  A very unfair thing to do to foreign investors who invested the money.
I urge Congress to pass a safe harbor provision to make the EB-5 Program fair and just for foreign investors.

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.