Qiao Wai immigration agency in China subject to skeptical local report regarding Brooklyn arena project
The artilce--from the online news site of People's Daily, one of the country's largest newspapers--is hardly definitive, but it suggests some willingness in the Chinese press to look skeptically at the burgeoning world of EB-5 investment, in which those seeking green cards for themselves and their families park $500,000 in a purportedly job-creating investment.
The 8/2/11 article, was headlined, according to a translation I commissioned, "Risks involved in Immigrant Investment Programs; Qiao-Wai Group In Question." (Here's the Google Translate version.)
The Qiao Wai Group (also known as the Qiao-Wai Group) was one of the top five EB-5 migration brokers in China last year, according to EB-5 News. (My interpretation is that "top" means volume.)
Relying on Qiao Wai
Via the New York City Regional Center (NYCRC), an investment pool, Forest City Ratner has sought to raise $249 million from 498 investors, all but 40 from China. As I reported 12/14/10, an article in the Chinese press indicated that Qiao Wai "was granted more than half of the total investment application quota."
investor event in Beijing, courtesy of EB News via Come2USA.com.)
The article quoted an informant who passed on NYCRC principal George Olsen's admission to Reuters that, despite the focus on basketball, the funds would not be used to build the new basketball arena in Brooklyn. (Thus the presence of Dawkins, along with that souvenir basketball, was a gaudy distraction.)
The article also suggested that Qiao Wai is telling potential clients that investors are guaranteed the return of their principal, with no risk. That, however, violates the requirement, under federal law, that the money must be put at risk.
I've reported that NYCRC representatives have told
potential investors that they face no "immigration risk"--that green cards would be guaranteed--though federal officials say that's improper.
They have not offered similar assurances regarding "investment risk," and there's no announced plany for repaying the loan.
Qiao-Wai, in a statement to the newspaper, said that clients are informed of the risks involved, and that the Brooklyn project received a pre-approval from the federal agency in charge of the project, the United States Citizenship and Immigration Services (USCIS).
(What exactly that means is unclear, since I've never seen the underlying documents, despite Freedom of Information Act requests.)
The Philadelphia situation
The article also referred to a situation in which 147 applicants to a project involving the Philadelphia Convention Center were turned down.
In a separate report, China Daily, in a 6/8/10 article, blamed "suspicion of illegal immigration," but this new article cited an alleged "commercial fraud," putting the investors' money in limbo. (I can't confirm the details.)
Due diligence possible?
The new article suggested that the EB-5 program works for most people, but that potential investors should look beyond promotional materials and do due diligence on the project and the regional center behind it.
The newspaper also suggested that investors could investigate themselves and also check with U.S. attorneys.
However, I'd argue that, given distance and language, potential investors are completely unequipped to do due diligence. And attorneys come packaged with the promotion, raising questions about conflicts of interest.