IMMIG INVESTORS’ PRICE OF FREEDOM
Path-to-citizenship program under fire
The American dream cost Chinese immigrant Lance Lee $500,000.
The native of Guangzhou had his family mortgage their home so he could invest in the development of the University of Miami’s campus. Months later, Lee, who had interned for 18 months at an ad agency in New York City, had his green card.
“Without EB-5 [visa program] . . . I would be counting days, counting years ’til my US green card,” said Lee, 32, who recently got his citizenship.
He’s now based in San Francisco and working to help other Chinese citizens gain green cards through the federal government’s EB-5 program.
Investors like Lee connect with US lawyers and “regional centers” that specialize in finding projects ripe for foreign cash. Thanks to the program, an investment of $500,000 to $1 million makes them eligible for a green card and, ultizenship. Feds promote the program as a job-creation engine; each investment is supposed to create 10 jobs.
But the program, which Congress recently extended through Dec. 7, has been plagued with corruption.
In New York City, where realestate developments have gotten more EB-5 cash than perhaps anywhere else in the country, one of the most prolific businesses overseeing such investments is fighting a lawsuit from 100 Chinese investors who claim they were victims of fraud in a $77 million deal to develop the Battery Maritim Maritime Building in downtown Manhattan.
“While the th defendants reaped millions in interest . . . and other payments,” the lawsuit contends, the proj
ect “turned into a catas- The bbusiness, called the New York City Regional Center, denies the allegation. “There was no fraud committed by our client, and the litigation has no merit,” attorney David Lender said in an e-mail. CCustoms and Im- migration empowers 866 regional centers around the country to oversee EB-5 investments.
Recent years have seen numerous high-profile scandals at the centers.
One in Vermont was shut down this summer over allegations that its principals misused more than $200 million in a Ponzi-like scheme.
The Securities and Exchange Commission charged that a Florida center blew a large chunk of $43.9 million in EB-5 investments. And last year in California, two fraudsters pleaded guilty to stealing millions from EB-5 investors and trying to sell visas to people on China’s “100 Most Wanted List.”
Among those sounding the alarm is Sen. Charles Grassley (R-Iowa, left).
“There are no required background checks on anyone associated with a regional center,” he said in March. “There’s no prohibition against foreign governments owning or operating regional centers or projects. That’s right, foreign governments can own businesses that sell our citizenship. Think about that.”
Nevertheless, EB-5 continues to draw vast foreign investment — $16.5 billion from 2010 to 2015, according to Invest In the USA, a national trade association for regional centers. About $4.5 billion of that sum went to New York state alone, the group claims.
The lion’s share went to New York City, according to data from the NYCRC and NYU’s Stern School of Business, including loans for these highly visible projects:
At least $600 million for Hudson Yards.
$258 million for luxury condos at 76 11th Ave.
$228 million for the Barclays Center and related projects.
$200 million for Downtown Brooklyn redevelopment.
$175 million for Empire Outlets on Staten Island.
These investments and others led to an estimated 4,297 green cards for foreign entrepreneurs.
The program was critical to building the deck over the train yard of Hudson Yards, which is Manhattan’s largest real-estate development in decades.
“This capital, which comes at no cost to the American taxpayers, was the catalyst for the Hudson Yards project and allowed us to immediately create thousands of jobs all over the city,” said a spokeswoman for Related Cos., the developer of the sprawling Midtown project.
But EB-5 critic David North of the nonprofit Center for Immigration Studies in Washington, DC, says investing in New York City’s booming real-estate market defeats the purpose of the program, which was intended to create jobs in areas that need them.
“It’s a ridiculous form of subsidy to some urban rich people,” North said of EB-5.
While North calls for EB-5 to be shut down completely, other critics say the program can be saved — including Stern researcher Gary Friedland, who urged Congress to create a monitor to prevent fraud.
“The program lacks integrity,” he told The Post.