EB-5 Program Reforms on the Horizon: Implications of the Jay Peak Enforcement
The EB-5 Immigrant Investor Program (“EB-5 Program”) is a U.S. immigration program that provides a path to U.S. citizenship for foreign investors who can demonstrate that their capital investment into an existing U.S. business resulted in the creation of at least 10 full-time jobs per foreign investor. The EB-5 Program is sometimes heralded as a successful immigration program since it promotes economic development through job creation.
However, the EB-5 Program has recently become subject to increased scrutiny and enforcement actions by the Securities and Exchange Commission (SEC). In April 2016, the SEC filed a complaint against Jay Peak Ski Resort and its principals, Ariel Quiros and Bill Stenger, alleging violations of the anti-fraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The complaint alleges that funds raised through the EB-5 Program were fraudulently diverted for uses not permitted under the EB-5 Program. More specifically, the SEC complaint alleges that more than $200 million was misappropriated in a Ponzi-like scheme. Among other things, the complaint also claims that Mr. Quiros allegedly stole approximately $50 million from foreign investors and that Mr. Stenger helped facilitate the fraud.
While some argue that the Jay Peak complaint underscores the need for reform to the EB-5 Program, Congress has not yet passed legislation that would reform aspects of the EB-5 Program identified as problematic by EB-5 industry operators. It is therefore crucial for stakeholders, developers, regional centers, and immigration attorneys to advise and help implement key processes and best practices to ensure transparency and compliance for the EB-5 Program. In light of these issues, The Knowledge Group has put together a panel of industry leaders and professionals for a two-hour LIVE Webcast that will provide an in-depth discussion of the EB-5 Program and proposed reform measures, as well as the implications of the SEC enforcement action against Jay Peak.
Some of the major topics that will be covered in this course are:
- EB-5 Immigrant Investor Program: Overview
- Implications of the Jay Peak Enforcement
- EB-5 Violations and Obligations
- Significant Lawsuits
- Due Diligence Considerations
- Compliance Responsibilities
- EB-5 Integrity Act
- Recent Legal Issues and Litigation Risks
- Best Practices in Mitigating Litigation Risks
- Best Risk Mitigation Strategies
Robert V. Cornish, Jr., Special Counsel
Phillips Lytle LLP
- What exactly prompted the action
- What steps did the SEC take to initiate the action
- Understanding the receivership appointment and its effect on potential recovery options
- Characteristics of Jay Peak and other failed entities
- What can Regional Center operators learn from these proceedings and others like it?
Anthony Korda, Attorney
The Korda Law Firm
Protection for the innocent victims of EB-5 Fraud:
- draft legislation: is it sufficient?
- Remedies in the face of an I-829 denial:
- Immigration Court
- Federal Court
- Is Mandamus an Option?
- To sue or not to sue?
- Whom to sue?
- Draft legislation: Integrity Provisions
Osvaldo F. Torres, Shareholder
Torres Law, P.A.
- corporate structure of Jay Peak deals
- would proposed integrity measures have prevented the Jay Peak fraud
- did the Vermont EB-5 Regional Center fail by not properly monitoring the Jay Peak projects
Margo Chernysheva, Founding Partner
MC Law Group
- $600 Million Question – what’s next?
- December 9th is fast approaching and so is the sunset date for the EB5 RC pilot program – depending on who is going to be the president and the majority in Congress and Senate will determine if the program will be extended in the current form or they will just do another short extension to make a real reform on it later or close it (highly unlikely)….
- More regulations and more due diligence by investors and their attorneys should be expected for both individual investors and projects
- What would the 400 defrauded investors need to consider
- Am I going to lose my investment?
- What ways am I going to be able to recover any part of my investment?
- Where to find more information about the case?
- How is this going to affect my family?
- Can I transfer my application and investment elsewhere?
- Will making new investment going to keep my priority date?
- What about aging out children?
- What about current backlog of visas for Chines citizens that did not exist when I filed?
- Am I going to lose my LPR status?
- Am I going to lose my USC status?
- Learning points: How to protect yourself and your clients
- Regional Centers should hire a broker dealer to provide updates and reviews of the projects held in each RC
- More regular CPA reviews of the financials performed and distributed to all EB-5 investors and their attorneys
- Ask questions, do not just believe that you see, read it careful
- Have an economist on staff if you do this regularly or have one as a consultant to read the reports for you when you have a client (build the cost into your price structure)
Who Should Attend:
- Finance Lawyers
- Foreign Investors
- Immigration Officers
- Chief Financial Officers
- Financial Reporting Managers
- Fund Managers
- Investment Advisers
- In-house M&A practitioners
- Other Interested Professionals
Mr. Cornish focuses on litigation, regulatory and compliance matters for broker/dealers, investment managers and family offices in the U.S. and abroad. He regularly represents these clients in both arbitrations and court proceedings. He also represents securities and commodities registrants in enforcement and disciplinary matters before FINRA, NFA, CFTC, SEC and state securities regulators. Having previously held positions of in-house counsel and Chief Legal & Compliance Officer with prominent investment firms, Mr. Cornish also counsels investment management clients on complex business management and marketing matters. He also provides securities compliance counsel to alternative fund managers, including real estate funds and various sponsors of EB-5 eligible investment programs. He is a former Series 24 FINRA registrant, serves as an arbitrator for FINRA, NFA and the London Court of International Arbitration, a member of the CFA Speakers’ Bureau and is licensed to practice in New York and several other jurisdictions. Mr. Cornish has been recognized as one of the top EB-5 securities attorneys by EB-5 Investors Magazine, and also serves as a member of the EB-5 Legislative Roundtable, which is a group of attorneys that seek to harmonize EB-5 legislation with state and federal securities laws.
Mr. Cornish focuses on litigation, regulatory and compliance matters for broker/dealers, investment managers and family offices in the U.S. and …
Anthony Korda was admitted to the Bar of England and Wales in 1988 and prior to moving his practice to the US practiced in the English courts as a Barrister of the Supreme Court of England & Wales for many years.
He is licensed as an Attorney in the State of California and is an active member of the American Immigration Lawyers Association, the Federal Bar Association and the American Bar Association. He now handles all aspects of employment, business and family immigration in the USA.
Anthony is admitted to practice before the US Supreme Court, the California Supreme Court, the 9th and 11th Circuit Court of Appeals and the US District Courts for the Middle District of California and the Northern District of Florida.
Anthony focuses his practice on EB-5 Related matters and has successfully filed hundreds of I-526 Investor Petitions Applications to I-829 Petitions to Remove Conditions of Residence and applied for I-924 Regional Center designation, Exemplar Approval and filed I-924 Annual Returns for many Clients.
Anthony also works successfully with a number of Regional Centers as a reviewing Attorney and provides legal and administrative services to a number of Regional Centers.
As an EB-5 Investor himself (originally from the United Kingdom) Anthony brings a unique perspective to the process.
Fluent in English and German, Anthony practices from his offices in Naples-Florida, Beverly Hills-California and London-England.
Anthony Korda was admitted to the Bar of England and Wales in 1988 and prior to moving his practice to …
Osvaldo F. Torres, Esq. is a 1987 graduate of the University of Pennsylvania Law School. For his entire professional career Mr. Torres has counseled clients on complex transactions, including securities offerings. For the last 6 years, Mr. Torres has been immersed in EB-5 work and has prepared numerous offerings involving hotel development, multi-family residential construction, senior independent living complexes, healthcare companies, restaurants, franchised services and others. Mr. Torres frequently speaks at EB-5 conferences on securities issues and other aspects of the EB-5 practice. He is a member of the EB-5 SEC Roundtable, a group of distinguished securities law practitioners in the EB-5 space. He also serves on IIUSA’s President's Advisory Council and its Compliance, Public Policy and Editorial Committees, on the Steering Committee for the EB-5 Investment Coalition. Mr. Torres is rated AV® Preeminent by Martindale-Hubbell and ranked a Top 15 EB-5 Securities Attorney by EB-5 Investors Magazine. In addition, Torres Law has been selected as a Medallion Partner by NES Financial. Mr. Torres has worked as a corporate and securities attorney at several large and prestigious law firms, including Schulte Roth & Zabel in New York and Greenberg Traurig in Miami, and has served as General Counsel for Telemundo Group and HBO Latin America.
Osvaldo F. Torres, Esq. is a 1987 graduate of the University of Pennsylvania Law School. For his entire professional career …
Margo Chernysheva (email@example.com) Founding Partner of MC Law Group based in Las Vegas, NV since 2009. She concentrates on business and investment-based immigration cases. Mrs. Chernysheva also does removal defense and federal court representation in Nevada. She has over 10 years of corporate contract negotiation experience specializing in pharmaceutical and biotech industry. Mrs. Chernysheva received pro bono award from Legal Aid of Nevada in 2010-2015. She is a mediator for Neighborhood Justice Center of Southern Nevada and has been appointed by the Nevada Supreme Court as FMP mediator. Mrs. Chernysheva serves as arbitrator and mediator for the Nevada State Bar Fee Dispute Committee. She is fluent in three languages. Mrs. Chernysheva volunteers as a chair for Practice Management and Ethics committees for AILA’s Nevada and California Chapters as well as NMD liaison for NV Chapter. She is a graduate of UNLV Boyd School of Law and is licensed to practice in Nevada and California.
Margo Chernysheva (firstname.lastname@example.org) Founding Partner of MC Law Group based in Las Vegas, NV since 2009. She concentrates on business …
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About Phillips Lytle LLP
Phillips Lytle LLP is a premier regional law firm that is recognized nationally for its legal excellence. With offices in New York State, Washington, DC, and Canada, our attorneys serve a multinational client base including FORTUNE 1000 companies, global and regional financial institutions, not-for-profit organizations, middle market companies, startups, entrepreneurs and individuals on important matters affecting their businesses and personal wealth.
About The Korda Law Firm
Anthony Korda at The Korda Law Firm is an Immigration Attorney who focuses his practice on Business and Family Immigration, with a particular emphasis on EB-5 cases. Anthony has successfully filed hundreds of I-526 and I-829 Petitions for EB-5 investors. He regularly advises Clients on the creation of new Regional Centers, amendments to Regional Center designation and works with developers seeking to raise Capital through the EB-5 Visa program.
Originally from the UK where he practiced as a Barrister for many years, Anthony brought his family to the U.S. using the EB-5 visa program, giving him a unique perspective of the process.
About Torres Law, P.A.
Torres Law, P.A., is a boutique South Florida law firm that concentrates on complex corporate and securities law matters. We counsel on a variety of offerings, including multiple EB-5 projects, and on joint ventures, mergers and acquisitions, financings, employment, licensing, distribution, franchising and company formation matters.
About MC Law Group
Founded in 2009, MC Law Group is a boutique woman owned law firm in Las Vegas, Nevada with three attorneys and 12 support staff specializing in immigration law.
Clients from all over the world, many of whom do not speak English, rely on the advice of MC Law Group as they apply for family, work, and investor visas, permanent residency, and U.S. citizenship through naturalization. MC Law Group’s entire legal staff is qualified and ready to serve new clients, both individuals and businesses, wanting skillful legal counsel and advice on various matters of American Immigration Law. With a staff that can communicate with and counsel clients in English, Armenian, Russian, Spanish, and Tagalog, MC Law Group is a unique and capable provider of immigration related legal counsel.
Some of MC Law Group’s most popular practice areas are business immigration, investor visas, immigration court, waivers of inadmissibility, fiancée visas, and family-sponsored immigration. The attorneys of MC Law Group have the skills that clients want and the experience to meet and exceed expectations. Whether they’re foreign students wanting to study in the U.S., investors who want to invest in the U.S. economy, business professionals who want to work in the U.S., or entertainers/performers who want to display their talents for an American audience, MC Law Group’s attorneys and support staff can help foreign nationals reach their American Dream. MC Law Group can also help family members of current visa holders get their own visas so they can visit their loved ones in the U.S.