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Sunday, July 14, 2024 - 8:12 am

SEC to Sanction Two Dozen EB-5 Immigration Lawyers

Bloomberg Business reports that the Securities and Exchange Commission “is preparing sanctions against as many as two dozen immigration lawyers” for accepting EB5 referral fees. If true, this is a long overdue enforcement action – the EB5 field suffers from several industry-wide bad practices, of which accepting referral fees by some immigration attorneys is one. Senator Grassley has been harping on one EB5 immigrant from Iran who apparently has national-security-related clouds hanging over his head – while keeping silent about widespread securities violations that plague the entire EB5 industry. If Senators Grassley, Sessions, et al truly want to spotlight problematic issues that need fixing in the re-authorization process for EB5, they need look no further than securities law compliance by all major EB5 industry actors.

The principal problems originate in systematic, pervasive, across-the-board lies told by Chinese migration agents to Chinese investors as to commissions collected by Chinese migration agents for investments made by Chinese investors. Invariably, Chinese migration agents present themselves as lily-white paragons of virtue and insinuate that greedy American middlemen (including immigration lawyers) are the culprits collecting commissions. The trouble with this wholesale violation of securities disclosure requirements is that Chinese investors are not put on notice that they are being steered into bad projects with shaky finances by interested parties (i.e. Chinese migration agents) – resulting in poor investment quality across almost the entire EB5 investment spectrum, with sorry outcomes for US job creation, and contrary to Congressional statutory mandate. The SEC should be mindful that its upcoming enforcement against US immigration lawyers will be spun in China as yet another example of Yankee perfidy. We encourage SEC to issue press releases highlighting the central and nefarious role played by Chinese migration agents to ensure that the forthcoming enforcement action truly results in cleaning up some of the mess, instead of the field once again falling prey to awful practices forced down US throats by Chinese actors.

Two dozen law firms is a largish number, and we understand that several prominent names are on the SEC list. Taking referral fees is a bad business idea (regardless of any ethical or legal issues) for immigration lawyers, and we urge the bar to refrain from such a crummy business risk. Non-disclosure to clients about referral fees accepted is a clear ethical no-no, and we are shocked to learn that some immigration lawyers are apparently doing just that.

EB5 remains an interesting idea in our immigration system, and its promise is just beginning to be fulfilled. EB5 does not need shoddy business practices – and even a sweeping deluge wiping out most industry players will not alter its destiny – EB5 has caused, continues to create, and will lead to, American jobs. We encourage SEC and USCIS to move forward with enforcement action against bad players.

This article is from Bloomberg Business news, but published on this website by an attorney from Swaray Law Office.  The law office is in Brooklyn Center in Minnesota.  Brooklyn Center is one of the northern cities in the Twin Cities area.  It is surrounded by Brooklyn Park, Crystal, Minneapolis, Robbinsdale, Champlin, Maple Grove and Fridley, among others.

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