Chinese EB-5 Investors Seeking Justice For Cases of Fraud

The Global Times and the Los Angeles Times each ran stories late last week in relation to a large fraud case in Los Angeles involving Chinese investors in the EB-5 Regional Center Pilot Program.   It is nice to see that the victims are beginning to pursue their remedies in court, but disappointing to see that they have to do so.

At Oppenhuizen Law Firm, PLC, we have pioneered a new way of providing counsel to EB-5 Investors.  It has been met with strong challenges from entrenched interests such as migration agents, and many immigration attorneys do not approve.  However, the use of Oppenhuizen’s system could have assisted many of the investors in these stories from investing in the wrong option.  Do not take this the wrong way.  The EB-5 system is a great system and is a reasonably safe (though not without risk) means of investing and obtaining a green card.  However, the EB-5 system as it stands has compartmentalized and systematized the work of all professionals to the point in which the only people who are not protected are the ones who need protection the most, the investors.  You can find the Oppenhuizen way of protecting EB-5 Investors in these recent blog posts of the Fraud on Investors In EB-5 Investments: Caveat Emptor! series:  

These stories show how the system is rigged against the Chinese investor, and makes it easy for bad actors in the U.S. to defraud unsuspecting Chinese investors.  The most telling aspect of the two articles indicates that the investors invested based on marketing promoted by a migration agency in China.  They never had any contact with their immigration attorney in the United States, all of which was apparently dealt with by the migration agents, and the investors did not understand the EB-5 program or its requirements.  Unfortunately, this could describe just about any EB-5 investor.

EB-5 investors are taught to ask the wrong questions when seeking a lawyer in the United States, if they are permitted to ask any questions at all.  Whereas in China, lawyers often are scriveners, as opposed to trusted counsellors.  So, it appears that any lawyer who has handled EB-5 petitions is fine.  Typically, the migration agents tell the Chinese investors that Person X is the “project’s lawyer” and the investors must use him or her.  Usually this is enough for the investors to simply sign the engagement letter, and allow the migration agents to handle it from there.  In the above cited stories, it seems that many investors did not even know what was paid to the immigration lawyer.

While experience can be important, there are far more important issues that should be addressed when choosing a U.S. lawyer.  First, will the investor have direct contact with the lawyer, including access by WeChat, telephone, email and the like.  If so, does the lawyer speak the investor’s native language, or does he or she have assistants or translators to assist with this.  Second, does the lawyer work for the developer or regional center also?  If so, do not engage the lawyer, as he or she is not looking out for the investor.  A recommendation from the regional center, project developer or broker dealer is a good thing, but if the lawyer has been compensated to work on the project by anyone who is not an investor, stay away from hiring that lawyer.  Will the lawyer provide me honest advice in relation to the strengths, weaknesses and risks of the project?  Will the lawyer explain in detail how U.S. law and specific states’ laws impacts the investors.  Will the lawyer explain in a thorough and realistic way what is required for an EB-5 investment to result in successful receipt of a green card?  Does the lawyer have experience outside of immigration, specifically dealing with securities, investment law, business and corporate law, law related to companies that failed; does the lawyer have a background of litigating disputes; can this lawyer help me if the investment goes wrong?

While common practice is for the EB-5 investor to deal only with either his or her lawyer in China, who speaks to the migration agent in China, who in turn contacts the U.S. immigration attorney, or for the investor to speak only with the migration agent, investors should demand direct access to their U.S. Attorneys.  Oppenhuizen is of the opinion that direct contact between the investor and his or her U.S. based attorney is absolutely necessary.  

Oppenhuizen goes further.  We are committed to meeting each and every client in person, in any way possible.  Our goal is to efficiently meet all of our clients in person, either in China, the United States, or anywhere else in the world.  We believe that if we are going to be trusted enough to be an investor’s attorney, we must look that person in the eye and we must work hard to build a meaningful, trust based relationship with each client.  This will involve making trips and meeting multiple clients in one trip, but each meeting will always be one on one.

Oppenhuizen also does not go away after your I-526 is approved or you get your conditional green card.  Oppenhuizen stays with you through the conditional period to follow the investment, and is there if anything goes wrong, to quickly intervene and protect your rights.

We are different.  We offer greater protection.  We believe that the investor deserves better.  We will provide the investor a better option.

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