EB-5 Regional Center Program will expire in June absent bipartisan integrity reforms
Vermont Business Magazine Today, Senator Patrick Leahy (D-Vermont), a senior member and former chairman of the Judiciary Committee, and Senator Chuck Grassley (R-Iowa), Ranking Member of the Senate Judiciary Committee, introduced the EB-5 Reform and Integrity Act of 2021 to address fraud and national security vulnerabilities in the EB-5 investor visa Regional Center Program, which has been exploited and abused for years.
Their bill includes significant integrity reforms to protect against fraud and national security weaknesses within the program, promote program integrity and improve oversight of the program. It also reauthorizes the EB-5 Regional Center Program, which is currently set to expire at the end of June.
Vermont suffered a $200 million fraud related to the EB-5 immigrant investor program at Jay Peak, Burke Mountain and related developments. Federal authorities raided management offices in April 2016. The civil and criminal cases are still playing out. Resort owner Ariel Quiros has pleaded guilty and will be sentenced this spring. The US Attorney has also charged former Jay Peak President and two other associates. Their court dates are currently scheduled for April. They have pleaded innocent. STORY: Quiros pleads guilty to Jay Peak EB-5-related fraud, faces 8 years
“I have partnered with Senator Grassley for years to clean up the EB-5 program. We successfully worked with both the Obama and Trump administrations to take important administrative steps to promote integrity and curtail abuses that have plagued the program. But the Department of Homeland Security cannot fix all of the EB-5 program’s flaws on its own. Congress must act decisively to comprehensively address the fraud and other vulnerabilities that have come to define the EB-5 program. Our bill would do just that,” Leahy said.
“It’s no secret that the EB-5 Regional Center Program has been a mess for years. Foreign investors exploited the program to get fast-tracked green cards, domestic developers exploited foreign investors to get fast cash for bogus projects and government officials picked winners and losers to score political favor. This has got to change. The Obama and Trump administrations took important steps to restore incentives for investment in rural and truly underserved areas, but Congress must act to fix other flaws that invite fraud and abuse. Our bill corrects the many defects in the current program and improves accountability so that it functions as Congress intended. Absent these fixes, this program should not be allowed to continue,” Grassley said.
Following a 2019 push from Leahy and Grassley, the Trump administration adopted regulations to restore incentives for EB-5 investments in rural and economically depressed regions. However, congressional action is required to rectify documented fraud and national security vulnerabilities within the EB-5 Regional Center Program. The bipartisan EB-5 Reform and Integrity Act of 2021 establishes new disclosure requirements for EB-5 regional centers in order to protect investors and certify regional center compliance with program rules. It also requires the Department of Homeland Security to perform regular audits of and site visits to regional centers.
The EB-5 Reform and Integrity Act of 2021 is supported by Invest In the USA (IIUSA), the national industry trade association for the EB-5 Regional Center Program.
Source: WASHINGTON – Leahy 3.18.2021