A 1/10/18 Real Deal article A cautionary tale? EB-5 investors sue over Battery Maritime woes describes lawsuits on behalf of 150 Chinese nationals who put some $77 million in EB-5 funds into the Battery Maritime Building in Lower Manhattan, a project that defaulted.
The investors got green cards for themselves and their families, but they didn't get their money back. The defendant, the New York City Regional Center (NYCRC)--the most prolific regional center, the middleman for the first $228 million in Atlantic Yards EB-5 funds--allegedly misled the investors about progress.
I can't judge that at this point, but here's the key point about EB-5. According to the Real Deal, the suit describes the investors as “unsophisticated Chinese nationals, most of whom neither speak nor read English.”
However, the NYCRC, in its defense, states, "“Plaintiffs claim they were ‘unsophisticated’ when in fact they expressly represented and were required by law to be sophisticated investors and to have their investments be ‘at risk’ in order to qualify for permanent residency in the United States."
I don't doubt that. But I suspect that that's treated as boilerplate rather than taken seriously. After all, EB-5 fundraising is more pageant than sober financial analysis, the kind of entertaining event that might sweep up, yes, unsophisticated investors.
Anyone remember my 2010 coverage of Forest City Ratner's first fundraising trip, coinciding with a visit by the New Jersey Nets (above right) or autograph-signing by Darryl (Chocolate Thunder) Dawkins (left)?
Or as Peter Elkind (and Marty Jones) wrote in Fortune in 2014:
The investors got green cards for themselves and their families, but they didn't get their money back. The defendant, the New York City Regional Center (NYCRC)--the most prolific regional center, the middleman for the first $228 million in Atlantic Yards EB-5 funds--allegedly misled the investors about progress.
I can't judge that at this point, but here's the key point about EB-5. According to the Real Deal, the suit describes the investors as “unsophisticated Chinese nationals, most of whom neither speak nor read English.”However, the NYCRC, in its defense, states, "“Plaintiffs claim they were ‘unsophisticated’ when in fact they expressly represented and were required by law to be sophisticated investors and to have their investments be ‘at risk’ in order to qualify for permanent residency in the United States."
Anyone remember my 2010 coverage of Forest City Ratner's first fundraising trip, coinciding with a visit by the New Jersey Nets (above right) or autograph-signing by Darryl (Chocolate Thunder) Dawkins (left)?
Or as Peter Elkind (and Marty Jones) wrote in Fortune in 2014:
EB-5 fundraising is a messy process, more like pitching vacation timeshares than any normal form of deal finance. Developers embark on road shows to big cities across China. With help from local “migration agents,” they use spam messages, slick websites, and telemarketing to round up potential investors for free dinner seminars featuring raffles for iPhones and lofty promises of a brighter future.
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