Earlier this month, the Securities and Exchange Commission (SEC) and United States Citizenship and Immigration Services (USCIS) issued a joint alert to caution investors about a fraudulent EB-5 investment scheme they were investigating. Allegedly, a Texas-based couple raised at least $5 million from investors who were falsely promised conditional visas to the United States. Unfortunately for the investors, the funds were not properly protected under their escrow agreements and were allegedly misappropriated.

Investors should carry out their due diligence and make sure they receive copies of the offering documents, all petitions filed with the USCIS, and the corresponding approvals or denials before investing. As part of their due diligence, investors should also carefully review the escrow terms to ensure that they enhance the security of their investment. The SEC and USCIS have provided a summary of potential warning signs and the steps that can be taken to avoid getting involved with a fraudulent EB-5 investment scheme.

NES Financial, a recognized best practices innovator, has compiled a list of EB-5 best practices for investors to keep in mind before investing in an EB-5 project.

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