Chinese EB-5 Investors Susceptible to Corruption
Recently, more and more cases of EB-5 regional center projects are coming to light in a negative way. In order to gain a competitive advantage in the Chinese market, some of these regional centers pay substantial commissions to Chinese emigration agents in China without informing Chinese investors of such commissions. For example, in the recent SEC case of the controversial Chicago Convention Center, it has been alleged that some Chinese emigration agents in China received commissions as high as $125,000 per investor to promote the EB-5 offering in China. As a result of these unfortunate realities, it is particularly important to seek out professional and experienced help when choosing an EB-5 investment option. In securing a sound investment, it is the duty of your advisor to analyze possible exposure to criminal and civil liability under the U.S. Foreign Corrupt Practices Act (“FCPA”) and other legislation, as well as China’s anti-bribery legislation arising out the payment of such alleged “kickbacks” to Chinese emigration agents.
Because of China’s licensing regime, which excludes foreigners from engaging in immigration work in China, the Chinese emigration agents enjoy an exclusive, monopolistic position in the Chinese market. The only way to determine the ownership structure of a particular Chinese emigration agency is to inspect its Chinese business license and undertake other appropriate due diligence. Chinese emigration agents must submit to a quasi-governmental immigration agency association. In Guangdong Province, the relevant association is called the Guangdong Entry & Exit Immigration Service Association (“Guangdong Immigration Association”). According to Chinese news reports, the current head of one provincial immigrant agency association in China also runs one of the largest emigration agencies in China. In fact, in China, it is quite common for Chinese government officials to wear two hats; they may be both the regulator, and the party regulated. While not technically illegal, this organizational structure is particularly susceptible to corruption.
Thus, even though Chinese emigration agents are not officially an “instrumentality” of the Chinese government under the FCPA, the fact that Chinese EB-5 investors are not informed that the EB-5 offering “subscription fees” and “administrative fees” are allegedly kicked back to the Chinese emigration agents is worrisome since even ostensibly private bribery may still violate the FCPA’s accounting provisions, the Travel Act, anti-money laundering laws, and other federal or foreign laws.
Buda Law Group has handled many EB-5 cases and screened hundreds of offerings to pick only the most trustworthy and financially stable options. We do our best to ensure that our investors are not only approved, but are making returns on their investments!
If you are interested in seeking an EB-5 visa and/or are looking for a sound investment option, give us a call today for a free consultation. Our experienced team works hard to ensure full transparency of your investment, with the ultimate goal of achieving maximum returns both fiscally and ethically.
John B. Buda, Esq.
www.budalawgroup.net office: 310-452-1872 firstname.lastname@example.org 3301 Ocean Park Blvd. Suite 205 Santa Monica, CA 90405