Last week, our team went to the nation’s capital to attend IIUSA’s 10th Annual EB-5 Advocacy Conference. As a Platinum-level sponsor, NES Financial was well-represented at the EB-5 Advocacy Conference with a booth in the exhibition hall and General Manager Reid Thomas speaking on the “Keep Calm & EB-5 On”: A Macro Perspective on EB-5 panel.
While the long-term extension that the EB-5 industry was hoping for did not happen, more than 350 industry stakeholders shared insight, information, and optimism that a favorable legislative outcome is just around the corner.
Here are 5 takeaways from Washington:
- EB-5 Reform Begins with Integrity Measures: Conference attendees, most of whom have closely followed every EB-5 legislative bill and staff draft, might not agree on everything but are of the same opinion that integrity measures must be given top priority. As one panelist phrased it, enhanced integrity measures are the “gateway to talking legislative extension” with Congress.
- Site Visits v. Regional Center Audits: As part of an ongoing initiative to increase regulatory oversight and deter fraud, USCIS recently launched its EB-5 Regional Center Compliance Audit Program. Although limited clarity was offered to anxious Regional Center stakeholders by USCIS Immigrant Investor Program Deputy Chief Julia Harrison, she carefully distinguished the unannounced, observational or “drive-by” characteristics of a Regional Center project site visit from a Regional Center Compliance Audit. The audit, a more formal proceeding, will provide advanced notice to the Regional Center, include a hands-on compliance audit team collecting case-specific data and verifying regional center applications and certifications.
- The Evolution of the EB-5 Program: The maturation of the EB-5 Regional Center program can be inferred from emerging EB-5 capital structure trends. Specifically, EB-5 funds continue to occupy a sizeable portion of the capital stack but are beginning to share the mezzanine debt space with international private equity funds. Moreover, while the median EB-5 project target raise has stayed relatively consistent over the last 5 years, average project target raises have doubled in that same time.
- Jay Peak’s Fraud Fallout: When the moderator of a panel that included the court appointed receiver for Jay Peak throws on a bright orange prison jumpsuit, conference attendees knew they were in for a treat. The not-so-subtle takeaway was that EB-5 fraud will get not only USCIS and the SEC knocking on your door, but the FBI as well. Michael Goldberg, the federal receiver for Jay Peak, went into detail weaving a narrative that began with first learning about EB-5 on a Vermont-bound plane to agreeing to a $150 million settlement from Raymond James Financial.
- A Platinum Affair: NES Financial’s Medallion Reception at The Hay Adams capped off a manic Thursday after the EB-5 Advocacy Conference. Valued Medallion partners and select EB-5 industry members enjoyed appetizers, drinks, and a 9th story view that rivals any in the District.
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