The EB-5 investment program, known as the EB-5 visa-for-investment program, is demonstrating a dramatic spike in fraud in EB-5 projects. For example 2016, the Securities and Exchange Commission brought enforcement actions against $1 billion worth of fraudulent EB-5 projects. A majority of the fraud involved Chinese investors, including a $136 million EB-5 real estate project. According to the U.S. Citizenship and Immigration Services (USCIS), the EB-5 program resulted in $8.7 billion in foreign capital into the United States since 2012.
The SEC has a Whistleblower Program, in which private citizens may receive a reward for providing the SEC with original information about securities fraud, including EB-5 fraud. If the SEC uses a whistleblower’s information to bring a successful enforcement action, the whistleblower is eligible to receive 10% to 30% of the monetary sanctions collected as an award. One whistleblower received over $14 million for reporting EB-5 fraud.
Since the enactment of the whistleblower program, the SEC has paid more than $150 million to whistleblowers.
Jeffrey Newman represents whistleblowers.
