Thursday, December 23, 2010

Extensive Reuters EB-5 Investigation Quotes Latour and Gibson

Folks, a few weeks ago I was interviewed extensively both on and off camera by Reuters reporters doing a comprehensive investigative piece on the EB-5 Immigrant Investor Visa.  My good friend Michael Gibson, along with a number of other attorneys and principals in the EB-5 sector, were also interviewed.

As happens with investigative journalism, the several hours of interviews they had with me were reduced to a few quotes.  I want to address one quote in particular, lest it is taken out of context.  In extensive Q & A regarding the enforcement roles of the SEC and USCIS, I expressed repeatedly that I believe that USCIS was doing a solid job of adjudication and, after prior INS failures, had established substantial domain expertise on the visa via their EB-5-dedicated unit in Laguna Niguel.  I told them that recent I-829 denials were, IMHO, consistent with the letter and spirit of the EB-5 legislative language; others interviewed in the article characterized some of these decisions as unreasonable, a view which, in the majority of cases I have reviewed, I do not share.

My comment regarding the USCIS doing a good job was, however, tempered by my responses to their questions regarding what role, if any, the SEC is having in enforcing the securities aspects of EB-5 visas.  I again expressed my sincere view: to date, the SEC has not gotten involved in any significant way.  I further stated that in lieu of the many flawed projects being marketed in China (with an increasingly concerned Chinese government watching carefully), the EB-5 sector needed to establish a proprietary code of conduct and ethical standards for industry.  Like existing EB-5 organizations, membership would be voluntary; but it would at least give prospective investors an opportunity to choose between an EB-5 Regional Center that has agreed to be truthful about denials as WELL as approvals and subscribes to enumerated ethical protocals...and one which does not.

Finally, I stated that if the EB-5 sector does NOT establish this form of self-policing, it is only a question of time, in lieu of the recent BMW decision cited in the article, before the SEC comes looking at the sector from a securities law enforcement angle.  That eventuality would only result in sanctions for those Regional Centers violating securities laws, but it would have a chilling effect on the overall EB-5 Investor Visa program during a time where EB-5 capital is one of the few growing investment income streams in our still-faltering economy.

Enough said: here's is a VERY THOROUGH look at important EB-5 issues and concerns...

Reuters Article Quoting Jose and Mike Gibson


Monday, December 13, 2010

Senators Kerry and Lugar's Proposed New EB-5: Fundamental Problems

Greetings...and my apologies for my recent silence!  Since returning from Dubai last month things have been quite hectic: lots of clients coming and going, my annual monastic retreat to Massachusetts (heaven sent and much needed this year) and, sadly, my 88 year old mother had a bad fall earlier this week.  (She didn't break anything and is recovering well, thankfully.)

As a result of all this, the newspaper clippings and online snippets I collect continuously to share with you have been accumulating!  Other commentators long ago have discussed the Wall Street Journal editorial from - gads - October 12, but it is important enough for me to tell you about it.  The piece, entitled "A Visa for Job Creators", borders on the simplistic for those of us who live and breathe the topic of immigration.  However, given the Journal's broad readership in centers of power, the opinion piece was well crafted to draw distinctions that need distinguishing.

For many Americans, even fairly educated ones, the word "immigrant" conjures up border-fence-jumpers and, possible, African cabbies in the Northeast.  Few of us see the full spectrum of that word today, which encompasses the preceding but also speaks to the thousands of degreed professionals who come to America to fill health care and technology jobs which American graduates simply don't want.  And, most relevant to our area of discussion in this blog, it applies to foreign investors who come to the U.S. to build a business, build jobs...while building their dream of a safe and prosperous life in America.

The editorial opinion offered some important stats:

  • Start-up business are responsible for the bulk of new jobs created in the U.S.

  • Immigrants are almost 30% more likely to start a business than are people who are NOT immigrants.

  • The average U.S. start up company begins with about $31,000, making the "low", TEA-dependent EB-5 threshold of $500,000 about 16 times higher than said average (!)

  • Less than 3700 people -- including dependents -- obtained EB-5 visas in 2009.

If you've read my thoughts about the subject of reducing EB-5 thresholds in the past, you know I've been against it.  Why?  Because prior discussions of dropping the figure to $250,000 still required the creation of 10 new U.S. jobs.  As someone who is a bit, uh, IMMERSED on the subject of bona fide job creation, I can tell you that it is VERY difficult to create provable 10 direct, indirect, or induced jobs with a $500,000, now matter how optimistic the developer's projections and how pretty the econometrics report; the notion that 10 jobs can be provably created with a $250,000 investment is non-sense, unless we seek to build an economy of minimum wage positions...and we don't, trust me.  The gap between the wealthy and the poor in the U.S. is beginning to look more and more like the norm in South America and Indian subcontinent.

But now Senators John Kerry (he of the presidential candidacy and ketchup in-laws) and the highly-regarded Richard Lugar have introduced legislation which drops the figure to $250,000 as previously contemplated...but creates two different options for job-creation compliance:

  1. The creation of five new full time jobs OR

  2. Reaching $1 million in revenues by the end of year one.

Obviously, the first option addresses my concerns; realistically, the creation of 5 direct jobs via an individual $250,000 investment would create five fast-food/hair-net/"would you like fries with that?" jobs, but they would be created.  The second option, as intriguing as it sounds, concerns me.  I've been dealing with high net worth individuals both in and out of the U.S. long enough to know that maneuvering -often LEGAL maneuvering -- which can be used to calculate gross revenues.  It would be pretty easy for a powerful business to create a U.S. affiliate showing $1M in gross revenues and getting the "investor" his or her green card...without the creation of a single U.S. job, particularly in today's digital world.

The WSJ editorial quotes Stuart Anderson, "a former INS official", who now is with the National Foundation for American Policy.  Mr. Anderson proposes a much more pragmatic and realistic approach to investment-based immigration: discard arbitrary capital requirements, have the investor submit a business plan to the SBA (which, presumably, could develop the same internal domain expertise that USCIS Laguna Niguel has done with the EB-5), and see if it flies.  If so, X number of jobs would need to be created with a set period of time...but the rigid numerical standards which ignore the way start ups REALLY happen in America would be eliminated.

As the editorial concludes, "a visa for job creators is a political and economic winner all around". 

Wednesday, December 1, 2010

A Little Escape from the Matrix

Folks, I'm doing my annual retreat and will be "radio silent" for the next few days.  Take a look:


Tuesday, November 23, 2010

Flashback: Port of Entry 2002 Thanksgiving Blog

Joey, friend of mine from many years past emailed yesterday.  He wanted to see if we could find a blog I'd written Thanksgiving week 2002 in my prior "before the word 'blog'" existed online daily posting, Port of Entry.  Well, I've been meaning to get the old POE blog archives online at for quite awhile now, but I didn't have it handy.  Gardhy, of course, did.

I'm reposting this article because, in various ways, it is timely: not only is it Thanksgiving week, but at the time I wrote the article, things were pretty lean for those in the IT things are pretty lean across the board, although apparently getting better.  (Check out my was black once! (-:)

Here's the link, stay tuned for the old Port of Entry archives, coming soon to a web site near you!

Download Jose Latour's Port of Entry TG 2002

Monday, November 22, 2010

New EB-5 RC Filing Fee, I-526/I-529 Increases Beg Many Questions

Although I've only discussed the upcoming Regional Center filing fee in recent blogs, I should have mentioned the new increases affecting EB-5 Investors filing I-526s and I-829.  D-Day is here tomorrow and effective Nov. 23, 2010, these are the new fees:

  • I-924, the new "Application for Regional Center under the Immigrant Investor Pilot Program", will require a $6230 filing fee; Regional Centers previously did not have to pay a filing fee.

  • I-526,  "Immigrant Petition for Alien Entrepreneur" goes from $1435 to $1500

  • I-829, "Petition by Entrepreneur to Remove Conditions" goes from $2850 to $3750

The modest raise in the I-526 fee is negligible; the $900 increase in the I-829 is a little more intriguing to me.  It's just my speculation, but I suspect that has a lot to do with the impetus behind Neufeld's December 2009 memo.  In that memo, which you can find HERE, USCIS' top EB-5 person went into great detail - 23 pages of it, in fact -- discussing the removal of conditions, satisfaction of job creation requirements, and the concept of "material change".  While many in AILA reacted with dismay to the level of detail Mr. Neufeld provided in the memo, it was no surprise to this former adjudicator.  It was a big, clear reminder of what we've known all along, delivered with some very specific guidance.

I suspect that the $900 fee increase comes to bear on the historical amount of time USCIS' adjudicators are having to spend on I-829 petitions, primarily due to their increasing expertise on the subject of this most complex of visas.  Having in house economists is the surest way to dspense with baloney job projections, and Mr. Neufeld's repeated reminders about the need to communicate material changes in project activity were no doubt triggered by the preponderance of cases they are seeing where the RC was in the business of "ABC" at the I-526 level and are now in the business of "XYZ" at the I-829 level.  Seems a lot of these RCs forgot about the annual requirement to update USCIS of how things are progressing.  (Note: that annual reporting requirement, in the law since the Regional Center concept was first launched, will also come via a new form, the I-924A; that form does NOT appear on the new fee list and is still being tweaked.)  My only thought is that it is a shame this fee increase is being passed on to the actual investors...when the whole reason for the complex I-829 adjudication is the fault of Regional Center!

Regarding the new Regional Center filing fee:  for the past few months, since this fee was proposed, you would not believe the number of prospective Regional Center clients who have been scrambling to beat tomorrow's deadline.  I mean, I know $6000 is a lot of money but given the investment required to create an RC (read on) and the level of adjudication analysis involved, it's hardly a deal-breaker when deciding whether or not to form an RC.  Look, it's no secret that the great big new RC filing fee is intended to dissuade those who are less-than-serious from continuing the barrage of RC filings currently faced by USCIS' EB-5 adjudication team in Laguna Niguel, CA.  As I've commented previously, the prevalence of new EB-5 Centers which are essentially "shelf" RCs - similar to the shelf corporations created in offshore jurisdiction for the purpose of having "vintage" entities at hand when expedient for tax planning -- is what is keeping USCIS Cali as busy as they are. 

Regional Centers are just that..."centers" which, if approved, can get into the business of defining projects in which to participate and steer EB-5 investor funds into those projects.  In certain cases, the Regional Center is the conduit to its own pre-defined projects; in others, the RCs get approved for a certain geographic area and for a number of industry sectors, but only provide an exemplar project.  The underlying legitimacy is ultimately defined by the quality of the project selected by the Regional Center but, to paraphrase a cliche, "show me your project and I'll tell you all about your Regional Center".  Put simply, strong Regional Centers don't pick wacky projects.

That last point is why many of these "shelf" Regional Centers are effectively being offered "for sale" by the attorneys or individuals who created them.  You see, depending on a number of variables, the creation of a new Regional Center involves anywhere from $25,000 to $200,000+ in legal, business planning, and econometrics costs...and takes 6 months to a year.  Given more-than-doubling of the number of approved Regional Centers in the past year -- it took almost 17 years to approve the first 40 or so and one year to double the amount -- and the reality that all but a small percentage of these are not actively marketing viable investment projects, this new market for "dealer demo" Regional Centers is hardly a surprise.

I'm approached often by developers and project managers struggling between the selection of an established Regional Center as a conduit for their project versus the option of forming their own Regional Center. "It depends", I tell them, and I point out these variables:

  • if your project is a one shot deal, the expense of a new RC probably doesn't make sense; on the other hand, it if will involve multiple tranches, it might.

  • if you go with an established RC, you will be able to market your project very quickly, as soon as USCIS confirms the activity of it involves a "material change" in what they've been approved to do. However, it is my experience that in these cases the COST to the project will ultimately be higher in terms of dollars; the fees which go to the RC generally exceed the cost of structuring your own RC.

  • if you go with an established RC, you are getting into bed with all their prior projects, so do your due diligence.  For example, let's say your project cuts a deal with RC X, a long-standing RC with a good record of success in past projects.  You need to thoroughly examine their historical timelines as well as identify any particular projects which are in or near I-829 adjudication.  Remember my blog a few weeks ago when I was complaining about certain RCs being very vocal about their approval record while flatly omitting their record of denials?  The reality is that even if yours is a superb project with great investor protections, it will be impossible to successfully market it if RC X has a failed or failing project under its umbrella.

Once again, as the Knight of the Templar told Indiana Jones when he was trying to identify the Holy Grail: "Choose Wisely."



EB-5 Gone Wrong? Tell, Your Story.

Folks, as you know, I keep my big mouth shut when it comes to naming names associated with EB-5 disasters.  Recently, I have had requests from several media friends who are eager to speak with individuals who have been subjected to adjudication problems, denials, or other issues in connection with an EB-5 process gone wrong.  Please email me in confidence and I will give you their contact information so you can speak directly with those interested in your story.

Friday, November 19, 2010

Dubai Wrap Up- EB-5 Alive and Well

In three hours I'm on British Airways to London but what a week it's been: it is difficult to relay the energy, ethnic diversity, and raw brainpower behind this urban testimony to architecture.  The seminar went beautifully, Dubai is talking EB-5 for the first time, and mix of ex-pats and regional prospective investors is absolutely the most intriguing melange of people with which I have ever interacted as an immigration attorney.

As usual, it's the folks from India who are the most informed on U.S. immigration laws, and there were people I met this week who know more about EB-5 issues than half the immigration bar!  Others knew less and a few knew nothing.  NOW they know. (-:

One always questions the wisdom of traveling so far when the need for the service one is offering is so close to home; Mexico and Venezuela have kept me busy and will continue to do so.  But just as I headed to Hong Kong in the mid-90s, I believe that this is the decade where Dubai will cement its role as the international business hub of what is a rather turbulent region, much as Miami has become the de facto "Capital of the Americas".  What better logistical point is there to begin our reach into EB-5 markets in India, Pakistan, and the Middle East?

My gracious thanks to Jud Laird, Namjoo Hashemi, and our seminar attendees for making this week a smashing success...I look forward to Round 2!

Me...and my big mouth



Tuesday, November 16, 2010

Last Minute Dubai Seminar Seats....

I know it's late, folks,  but we have been able to accomodate all of the Waiting List folks and I have had 5 last-minute cancellations.  If anyone wants to crash the party tomorrow morning, or if any of your registered wants to bring someone who is interested in attending, please email me at with your name and mobile number and I'll text you a confirmation.  Jose

Dubai: Day One

Jud's secret jet-lag recipe (a/k/a Tylenol PM) worked wonders and I was raring to go this morning when Namjoo came to get me at the hotel.  (Namjoo, for those of you who may not recognize the name, is my West Coast representative, a Certified Canadian Immigration Consultant and -- most relevent to this particular trip -- our Farsi voice.)  After double checking that we were ready for the big day tomorrow, I got a whirlwind tour of Dubai. Report card so far:

Food- 5 Stars

Service- 5 Stars

Shopping- a Terrifying 10 Stars

Conducive to Weight Loss Program- 0 Stars

The food, seriously, makes the latter essentially impossible.  In one sitting I had the best baba ghanoush, best (and only FRESH) pomegranate juice, and best hookah flavor (mint) of my life. Now...back to stuffing presentation packages for tomorrow!

As soon as I figure out if/how to post an album on my blog software, I'll do so but in the meantime, here's one short Cuban in front of on tall - and I do mean TALLLLLLL - building.  Check out the Burj Khalifa Web Site




Dubai Simply ROCKS!

Got in via London late last night and went to sleep on the 34th floor of the hotel with beautiful city lights...woke up this morning to realize I was staring at the Arabian Sea!

I was awakened this morning by chanted prayers blasted from loudspeakers in the minaret of a mosque 34 stories down and a few blocks over.  Prayer reminders are done five times a day.  I'd never thought about it before but this structured prayer rhythm of their day is very much like the rhythm of the monasteries I visit.  We ALL need to be reminded to pray and -- no disrespect to our important American separation of church and state -- it's kind of cool to be reminded to talk to God five times a day.  I'm checking in myself with every reminder!

I am STOKED about the seminar tomorrow but if ONE more person asks me if I'm nervous about the side of the group...I still won't get nervous.   That's because in an EB-5 environment, it's a privilege and responsibility to spend my time dispelling myths.

This place has the energy of Hong Kong, the beachside cafe/yacht vibe of Marbella, the architecture of the next century, the cleanliness of Singapore, all thrown together with the diverity of the bar in Star Wars.  Can't wait to see what tomorrow will bring!

Sunday, November 14, 2010

Okay, Email Sign Up is Finally Fixed!!

The inimitable Tom Mahoney has fixed the blog subscription issue by moving us to Feedburner.  If you want to subscribe to Immigration Insider via email, just put type your email address in the box right under my ugly mug and click subscribe.  You'll get taken to a new page where you will confirm and that's it!

Hats off to Mr. Mahoney, jet pilot and all around good guy. (-;

Dubai-bound in a Few Hours!

Well, in just a few hours I'll be leaving Miami for Dubai via London and I have to tell you guys...this is pretty exciting!  I've done seminars on investment based immigration for a loooooong time now: since the early 1990's, when I had my office in Hong Kong, I've been talking about the EB-5, L-1, and alternative immigration strategies.  But never have I gotten as warm a reception as the one I've gotten for Dubai.  Listen to this:

-over 100 prequalfied prospective EB-5 investors will be attending (our original room only sat 70 so we had to get a bigger one!)

-folks are flying in from 12 different countries to attend the seminar!

Honestly, I feel like I'm opening for Paul McCartney or something. (-;

I've never been to Dubai so this is a particularly exciting trip for me.  I will be accompanied by Jud Laird, one of the principals of BC Properties, the U.S. development and investment company who does the deal-structuring for custom immigrant investment properties as well as by Canadian immigration consultant Namjoo Hashemi, who is Private Placement Partner's West Coast representative and who will be there for our Farsi-speaking attendees.

2011 is going to be a busy year: Private Placement Partners will be presenting our seminar,“An American Future: Strategic Immigration Planning for U.S. EB-5 Investors©in a number of cities worldwide, starting with El Paso, Texas, on February 1, 2011.  After that, events are planned for Mexico, Venezuela, Pakistan and Lebanon, and a possible return trip to Dubai same time next year.

Safe travels to everyone en route to Wednesday's event, I promise to make it a very worthwhile educational experience regarding your U.S. investment immigration options!

Best, Jose

Tuesday, November 9, 2010

Thursday, November 4, 2010

Several Clarifications Regarding Yesterday's Post

I have received a number of panicked emails this morning in response to my grumpy about certain EB-5 Regional Centers concealing petition denials.  Please note that it is not possible for me to publicly identify any of these entities.  Not only would it be irresponsible to do so (given that I have not given those centers an opportunity to explain their specific situations to me), but the information has come to me via is privileged information which I cannot disseminate, no matter how much I'd love to "out" dishonest marketers, I cannot name names.

However, I CAN tell you who I was NOT referring to: because of my long-established respect for CMB Regional Center, several writers have inquired as to whether that Regional Center is among those to which I referred yesterday.  I am happy to report that I have never received any negative information from anyone regarding CMB and that the sterling reputation of my friends in Moline remains untarnished.

Folks, this isn't rocket science: basic due dilgence will get you the answers you need!  Try Google! (-;

Wednesday, November 3, 2010

Okay, EB-5 Regional Centers, Time to Fess Up...

For the third time in a month, I have been made aware of I-829 denials issued to some of the self-described "top" EB-5 Regional Centers.  Now, while an EB-5 Regional Center is not required to discuss these denials, deliberately concealing them is another matter.

A number of EB-5 Regional Center sites are expressly detailing their records of approval...while conveniently failing to disclose their I-829 denials.  Folks, this isn't eBay feedback on your online used CD store...this is the record of your Regional Center's ability to obtain the permanent residency you promised your investor years ago.  You have an ethical DUTY to state such record truthfully.

It is deceptive and false advertising to enumerate your victories while failing to mention your losses. I would encourage the Regional Centers who are making this tactic part of their online marketing to either start telling the truth or, if that's not palatable, to eliminate altogether the publication of their respective win/loss records. 

If you don't, you are fair game and expect to be called on it.

Wednesday, October 27, 2010


Based on the emails that I’m getting, I think it’s time for us to step back and take a fresh look at the big picture of EB-5 Regional Center visas. With over 100 Regional Centers approved by USCIS and almost as many in the pipeline, I’m finding that the quality of the marketing teams does not bear any direct relationship to the quality of the underlying projects.

Investors who have the resources to invest in an EB-5 visa and secure their permanent residency come in two basic flavors: entrepreneurs and limited partners.  The former are the folks who want to start their own business in the U.S., want to be “hands on”, and believe they can create 10 direct jobs through their investment.  These are the candidates of the Individual EB-5 Investor visa category.  The second “flavor” is made up of the folks who see an EB-5 investment as a pragmatic tool through which they can achieve their U.S. permanent residency.  Sometimes they are coming to America to retire; other times they DO want to start their own business once they immigrate but don’t want the arbitrary constrictions of a conventional investment visa category.  For these folks, putting their money to work and creating American jobs via an EB-5 Regional Center Investor visa makes the most sense.

Today, many immigration attorneys are so busy promoting one EB5 Regional Center or another that they miss the forest…because of all the trees.  I’ve had at least two clients who had received hard-sell EB-5 Regional Center visas.  In both cases, they had existing U.S. businesses and strong foreign affiliates.  They were, unbeknownst to them “Closet L-1As” and readily immediately qualified and eligible for EB-1 Multinational Executive permanent residency…without a half million dollar investment!  (You should see the face of a client who has been led to believe that his only path to the coveted green card is via a jumbo investment when you tell him that’s hogwash: priceless!)

But even for those for whom the straight-shot to an EB-1 isn’t possible, the notion of EB-5 suitability needs to be explored by the attorney.  There are simply too many investors who are not aware that if they open their enterprise in a TEA and create 10 jobs, they CAN get a green card with a $500,000 investment.  Why is this news to almost every investor I speak with?

I’ll tell you why: because the EB-5 Regional Center visa is what the press is eating up and what people are spending millions to promote.  But not all that glitters is gold…just ask the Chinese government, which is taking a good look at some of the more questionable programs being marketed in the Far East, which generates over 85% of all EB-5 investments.

So, first things first: assuming you already know that an EB-5 investment is the best course, first rule out an individual EB-5.  Why?  Because the wisest decision is the best-informed.  Candidly, given that there ARE at least several solid EB-5 programs (IMHO), the argument for an individual EB-5 is suddenly a lot less compelling that it used to be.  Before –again, IMHO – you had a dozen flavors of garbage from which to choose; an individual EB-5 was a no-brainer.  Today, you have a virtual smorgasbord of lame projects from which to choose…and a handful of cherry-picked good Regional Centers.  Given those few good ones…do you really want Uncle Sam looking over your shoulder and making you create 10 jobs when, in reality, your business is doing great with 7?  Not me.

So then, when you amble down the road of true analysis and end at the door of EB-5 Regional Centers…how do you choose?  I suggest to my clients that they begin by separating immigration objectives from investment objectives.  Today, I can show you a handful of EB-5 RC Programs which are proven and successful green card vehicles but terrible investments; I can also show you some pretty smart investment structures in terms of ROI and protection of the EB-5 Limited Partner's investment…but with questionable job creation logic and projections which are heavily academic (i.e., pretty unrealistic.)

How many EB-5 Regional Centers deliver on both fronts?  Very few.  More on this soon!

Monday, October 11, 2010

EB-5 Denials: Inglorious Projections

If there's been a recurring theme with EB-5 I-829 adjudications in 2010, it most certainly has to do with job creation numbers and deviations from planned business activity. While the USCIS has been historically liberal in excepting generous job rejections at the initial I-526 stage (i.e., the initial approval of conditional residency as an EB-5 regional center investor), 2010 has been characterized by challenges to such projections, considerable scrutiny of both direct and indirect job creation, and a close look at deviations from the original business plan.

Some of these problems have been made public but the majority remain invisible to those contemplating an EB5 Regional Center investment. One of the benefits of being a part of the very small EB-5 Regional Center community is that folks tend to send newsworthy items in my direction. Most often, it's a disgruntled investor who's been left high and dry by a denial; oftentimes it is a cryptic article published in a local newspaper and found by my search spiders. Occasionally, the bad news comes to me via another Regional Center hoping that I will write a blog about another RC's  notable problem.

One of the problems of being a part of the very small EB-5 Regional Center community is that it is, well... very small. In my view, it is irresponsible journalism to use a blog to broadcast unsubstantiated rumors. On the other hand, when a specific issue is burning up the Internet -- say Victorville -- it is irresponsible to not communicate this to my readers. Because so many of these unfavorable adjudications pertaining to job creation/business plan deviation issues arrive via private sources, and oftentimes involve outstanding attorneys whose RC client derailed the original pan, I will not publish specifics.  Bad things are happening to some very good EB-5 attorneys through no fault of their own, and that's not something I'm interested in relaying.

One thing I can tell you is this: it is evident yet again that the decision to consolidate EB-5 processing at Laguna Niguel was a wise decision for the USCIS. These new denials are clearly distinguishable from the denials of the late 90s and early 2000s in that they demonstrate considerable domain expertise by the USCIS EB-5 adjudication team. The addition of professional economists to the team and growing sophistication of the part of the adjudicators is making for some pretty incisive adjudications… and that’s usually bad news for the regional centers involved. There are a lot of investors in the pipeline between an easy I-526 approval and ad upcoming I-829 filings. For those who invested with masters of consistency – such as the inimitable CMB – there have been no changes in business plans or activity. For many others, especially in the construction and development sector, an erratic economy has triggered VERY "material changes" in the original business plan, meaning that things at the 829 level look pretty different than they did 2 years ago.

If that sounds like your Regional Center, your proactive involvement in insuring that changes have been communicated to and approved by the USCIS before you file your I-829 is absolutely critical if it's permanent residency you seek.

Wednesday, October 6, 2010

35 of 70 SEATS BOOKED: Jose's Dubai EB-5 Seminar Nov 17, 2010

Folks, I just wanted to update you on the Dubai seminar...with just an ad here and there and a lot of word of mouth, we have filled 35 of the 70 seets for our November 17 EB-5 Seminar at the Shangri-La Hotel in Dubai.  My colleague, Namjoo Hashemi, a Canadian immigration consultant who has helped hundreds immigrate to Canada from the Middle East, will be joining me and Jud Laird, owner of BC Properties and the pending Lake Point EcoVentures Regional Center, in presenting a dynamic, fact-filled, myth-dispelling morning discussing the real truths behind the EB-5 visa and the things you need to know to determine which Regional Center is right for you.  In fact, one area we will explore in depth is the phenomenon of attorneys steering clients toward EB-5 visas....when better alternatives exist for the client!

I am going to be firing out the first press release on the event in the next day or two; based on what we are seeing and the fact that this first Dubai event is free, I think we'll book up shortly after that goes out.  I wanted to let me readers have a chance to sign up before that, so the link is below.

To clarify; the event will not be the usual "here's why our Regional Center is best" deal you are used to seeing.  It really is an informational seminar discussing everything from taxation issues  to timing strategies to other migratory options...including the often overlooked INDIVIDUAL EB-5 visa.  As I state, the Lake Point EcoVentures Regional Center EB-5 project is still pending USCIS approval at this point.  If we have that approval, we'll be sharing what we believe to be the smartest EB-5 program available when we are in Dubai; if it is still pending approval, we will have to limit our discussions to a general explanation of that program as permitted by SEC and USCIS guidance, and this will only make up a brief portion of the seminar.  Either way, it's going to be a great event and is filling up fast, so sign up today if you are an accredited investor exploring U.S. permanent residency!

[Please note: attendees registering will be electronically vetted and have to attest to their meeting the specific U.S. SEC definitions of "accredited investors".  This event is ONLY for such investors.  If you are interested in a consultaition with Jose but are NOT an accredited investor as described in the registration process, PLEASE DO NOT REGISTER FOR THE SEMINAR.  Instead, please email him directly at and he will be happy to arrange a private appointment with you during his stay in Dubai.]

Register Now for Jose's Dubai EB-5 Event

Monday, October 4, 2010

Pizza for Passport, Anyone?

Lately, all I've been blogging about is EB-5 this and EB-5 much so that for the second time this week, a prospective client looking for H-1B and PERM assistance asked if we could refer them to an attorney who did this work!  I guess it's time to remind everyone that although EB-5 is no doubt the squeaky wheel these days, we - I should really say, "Melissa" - are/is STILL providing comprehensive family and business immigration services.

As you have no doubt gathered, my time these days is pretty much spent on EB-5 Regional Center structuring, consulting with existing Regional Centers, and helping folks find the right EB-5 program for them.  Between that and my primary corporate clients, for whom I handle a diverse number of investment-related matters, my plate is more than full.   Melissa, on the other hand, is busier than ever with our non EB-5 business immigration work, which involves mostly L-1A, E-2, E-2, PERM and complex EB-1 permanent residency.  She's handling not only her corporate clients but has assumed the role of primary counsel for a lot of the work I used to do myself, such as entertainer visas and the like.  Mel also handles the less frequent family immigration cases we take on, as well as naturalization and complex waiver filings. In addition to her busy case schedule, Mel continues to volunteer at the University of Miami's College of Law, most recently by presenting a training session called ""Immigration Options for Your Undocumented Clients". 

With our respective families and obligations, it is, of course, always a challenge to maintain balance.  I know I've been struggling with that a lot lately.  (At this stage in my life, my body is less than subtle in reminding me when I'm pushing myself too hard; a vague sense of being tired turns rapidly into sniffles and/or a sore throat; if I don't cool my jets and get one or two good, long nights of sleep, a cold is invariably next.)  As I hear about school meetings and Halloween costumes and soccer practice, I vividly remember my own life when the boys were young, and I marvel at Melissa's ability to balance all that and still manage her workload.  But, then again, she isn't a year away from AARP membership eligibility, is she? (-;

Like me, Melissa thinks that the best part of our job is in being able to help others.  Recently, Mel was working in Ft. Lauderdale and went in for a quick slice of pizza. Not having any cash in hand, she pulled out her debit card when the owner told her that they didn't take plastic.  Running late, she thanked him and explained she didn't have time to find an ATM.  As she turned around to leave, the owner said "WAIT, my treat."  And so Melissa got a free slice of pizza.

Although we spend a great deal of time giving free advice and guidance to people needing immigration help, the ubercoolness of someone giving us a free slice of pizza was not lost on her.  (Exactly the same thing happened to me buying an iced tea at an airport earlier this year, except it was the lady in front of me who paid).  As she ate her pizza and thanked him, they got to talking and as it turned out, Mr. Pizza was getting ready to file his N-400 application for U.S. citizenship...something Melissa knows a little something about.

Cool story, huh?  As Mel and I have often discussed, all this business about helping others really is karma-related.  It wasn't about Melissa getting a free lunch or about Mr. Pizza getting some valuable legal advice he otherwise couldn't was about one person deciding to do something nice for another with no expectation of anything in return, and the universe conspiring to see his good deed generously rewarded.



Monday, September 27, 2010

Bigger EB-5 RC = Better EB-5 RC? You Decide.

The EB-5 frenzy is really starting to get out of hand: a just-approved EB-5 Regional Center's first press release predicts that it will create 18,000 jobs in the next five years in one portion of one state. Let's see, that means that if it is in a TEA, that's, what...1800 EB-5 investors each plunking down $500,000.  That's potentially $900 million dollars worth of EB-5 funding.

 Holy COW.

Meanwhile, the three projects I work with -- existing, operational and recognized ventures owned and managed by proven veterans with clear histories of success -- speak of 8-10 investors, 90-280 jobs.

The catastrophic failures of the first decade of the EB-5 Regional Centers involved optimistic predictions; historically speaking, those predictions paled in comparison to the intergalactic projections being irresponsibly thrown around in the midst of an economy where not even the U.S. government can make a dent on job creation.  Meanwhile, the Victorville fiasco continues, with a second USCIS Notice to Terminate making it look pretty grim for those investors.  See Michael Gibson's excellent piece on this HERE.

Guys, please make sure you speak with an objective, educated advisor before investing in any EB-5 Regional Center.  New Regional Centers are getting approved daily; for the most part, it is simply making a clear divide between the handful of excellent programs and the rest of them.  As Yogi Berra would have said if he'd been an immigration lawyer, "It's like 1990's EB-5 deja vous all over again..."


EB-5 Finder Fees and the Big BMW Flap: Jose's Take

As many of my attorney readers are aware, a recent SEC decision has the EB-5 bar all abuzz and stressed out.  The BMW involved is not the car company but, rather, a law firm seeking to establish a referral relationship relating to a security.  Here's the lowdown followed by my opinion on how this affects EB-5 practitioners. 

Under the arrangement they proposed to the SEC, the Brumberg, Mackey & Wall, P.L.C. (“BMW”) firm would not:

(1) engage in any negotiations with investors,

(2) provide potential investors any information about the energy company that could be used as the basis for funding-related negotiations,

(3) be responsible for, or make any recommendation regarding, the terms, conditions or provisions of any agreement for an investment or

(4) provide any assistance to any potential investor with respect to any transaction involving the financing of the energy company

The reason for this language was BMW's attempt to distinguish the earnings they would get from their activities as "finder's fees" vs. "commissions".  Why? Because the SEC's cryptic regulatory language makes this distinction and a "finder's fee" does not require registration as a broker. 

If you look at the enumerated "don'ts" above, it is clear that these would apply to an EB-5 referring attorney, but it goes beyond that: with an EB-5 Regional Center, there is no negotiating the terms of a Regional Center EB-5 visa opportunity; price, terms and conditions are defined in the PPM by the Regional Center.   In the BMW decision,the SEC took issue that BMW did NOT state that they wouldn't have contact with potential investors as part of the proposed arrangement.  In other words, despite the above enumerated list of what they would NOT do, the SEC took the absence of that latter statement as meaning that BMW COULD, conceivably, be involved in the investment process.   

All of this begs the question: was, if any, other role was BMW playing in the contemplated transactions?  This is the opening sentence on Martindale-Hubble describing BMW's main areas of practice:

Brumberg, Mackey & Wall, P.L.C. specializes in representing businesses and individuals in commercial, tax, estate, banking matters and real estate.

Based on what the firm does -- primarily transactional and commercial matters (although MH goes on to mention PI and other secondary areas of practice)-- , I believe the SEC reasonably expressed concern that BMW was likely to get involved with negotiations or other aspects of the contemplated transactions, which, unlike EB-5 RC offerings, are not carved in stone.  Furthermore -- and I am speculating -- it is highly unlikely that fees earned via BMW's contemplated transactions were subject to outside conditions beyond BMW's control (e.g., USCIS petition adjudication).  That element of the fulfillment of "conditions precedent" being satisfied before fees are disbursed, while not expressed in SEC regulatory language, goes a long way in making the common sense decision as to whether something is a "commission" vs. a finder's fee/bonus.

In their ruling, the SEC reasoned that the transaction-based compensation BMW sought to receive would give BMW a strong incentive to engage "pre-selling" or other sales activities such that BMW would need to register as a broker-dealer if it proceeded with the proposed arrangement…but I believe that this is because, in contrast to immigration counsel and EB-5 RC projects, BMW had no possible alternative role in the transaction except to broker it...the exact opposite of an immigration attorney working to secure an EB-5 RC based green card for his or her client.

Let’s draw some distinctions:

AN INDEPENDENT IMMIGRATION PROCUREMENT OBJECTIVE: Clients invest in EB-5 Regional Centers for the primary purpose of getting U.S. residency for themselves and their family.  NO ONE invests in an EB-5 RC for yield, capital preservation, etc...all that are very secondary and tertiary considerations.  An immigration attorney is involved in the EB-5 Regional Center visa process with one client and one purpose: to secure the U.S. permanent residency that client seeks through investment.  In contrast to BMW, who is expressly there to identify prospective investors, the immigration attorney is putting the “cart before the horse”, as he or she SHOULD be, when he or she considers the underlying construction and elements of RC candidates identified by a client.  Put simply, as I have long argued, the immigration attorney has, IMHO, an affirmative duty to conduct basic due diligence on any EB-5 Regional Center project he or she is prepared to present to any client.  Instead, what we have seen is the proverbial ostrich game, where larger firms are so concerned about liability that they protect themselves by pretending that there is an artificial line between the immigration and investment objectives of an EB-5 visa; “Client, pick whatever RC you want, I’m just the visa guy”.  TOTAL irresponsibility as I see it.  Each immigration attorney who sends a client to a Regional Center in which he or she would never personally invest because they believe the I-526 will be approved but the investment is a bad one is every bit in violation of their ethical duties as an attorney who only cares about the referral fee and sends a client to a Regional Center where visa denial is likely.  Yes, we are not investment advisers, but as immigration counsel we are bound to reasonable care, and it doesn’t take Gordon Gekko to see the obvious scams and failures which characterize the majority of the Regional Center projects being shopped overseas.

2-   FEES ARE PAID AS A FINDER'S FEE/BONUS, NOT A COMMISSION:  EB-5 Regional Centers – at least the vast majority – escrow both the capital investment and the syndication fee (from which the referral fees are paid) until the I-526 Investor Petition  is approved by the USCIS.  Accordingly, in contrast to a structure such as that advanced by BMWs argument, in the case of EB-5 visas, no approval…no immigration attorney referral fee.  Now, most state bars prohibit contingency fees on family law and criminal law cases; I am unaware of any state bar which prohibits results-based bonuses relating to success in complex immigration filings.

2-     EB-5 FINDERS FEES ARE NON-EXCLUSIVE AND WILL BE PAID BY WHICHEVER REGIONAL CENTER THE CLIENT ULTIMATELY CHOOSES: This may well be the simplest and most clear distinction to contrast BMW to our EB-5 situation. The referring attorney, unlike BMW, is not tied to any one project nor to any one Regional Center.  If my client shows up and suggests RC's A, B, and C and I can look her in the eye and tell her that I see no fundamental flaws in any of them, I will get my finder's fee whether she picks A, B, or C.  I am not BOUND to one client, hence the "hard sell" implicitly feared by the SEC in a client-specific situation such as BMW's does not apply.  (That being said, as the immigration attorney, I DO have ethical violations to disclose the finder's fee I'll be receiving, to insure that I do not favor one RC over another based on a higher finder's fee offered and, most critical, to UNDERSTAND the immigration infrastructure and job creation methodologies, as well as all aspects of the project, so that I can protect a client from a fundamentally flawed EB-5 investment. )

 ESCROWING ATTORNEYS FEES: THE ONLY WAY TO INSURE BOTH BAR AND SEC COMPLIANCE:  As many of my readers know, I absolutely refused to filed I-526 Regional Center petitions for the last 16 years based upon my belief that one cannot serve both the Regional Center AND someone investing in them.  After many clients complained that I was sending them to another attorney they didn't want and that they didn’t care if I got a referral fee provided their I-526 was approved, I finally figured out what I need to do to address my issues with this only this past June:  just like the RC puts 100% of funds in trust until I-526 approval, I would put 100% of my I-526 attorneys fees in trust until I-526 approval.  My clients pay the filing fees, costs, etc. when we file the I-526 but in the event of a denial, just as they would get their $500,000+ syndication fee back from the Regional Center’s escrow account, they would get 100% of the attorneys fees back from my trust account, which is completely permissible under bar rules as a immigration fee contingent upon approval and held in a Bar-sanctioned attorney funds account.  (Obviously – and we are back to the Ostrich Syndrome – I’m only going to take cases from Regional Centers which I understand fully and believe to be valid permanent residency mechanisms for my clients…not any old Regional Center.  That's why I only work with 3 RCs right now.) 

I’m not a securities lawyers so I won’t get deeper into the 4 prong test, the Paul Anka decision (which required there to be zero contact between the finder and investor if a fee was permissible for someone not registered as a broker-agent, so it’s irrelevant since all immigration attorneys referring EB-5 prospective investors obviously know them), etc.   But here's why I, for one, am not stressed out about the BMW decision:

  • A performance-based incentive or bonus triggered by a favorable adjudication of an I-526 is not – and will never be – a brokerage commission.  It is a finders fee contingent upon approval via a federal adjudication.

  • I am authorized as an immigration attorney to receive a performance-based bonus as long as my client is aware of that bonus and agrees to it, and there is nothing regulatory of which I am aware which defines WHO may pay that bonus.

  • Unlike the BMW firm, I am not obligated to a particular client nor selling an "investment"; I am advising the client on WHICH Regional Center is most likely to meet their immigration goals.  Whether the client chooses A, B, or C, I am obligated to no Regional Center and - assuming I subscribe to the ethical self-checks described above -- will receive my finder's fee regardless of which center the client chooses.

It’s all about that one thing missing from so many in our profession, folks: good faith.   The day I get into the “business” of headhunting for EB-5 investors, I’ll sit for my SEC license.  Till then, I’m just an immigration attorney putting his money where his mouth is and, at least for now, the government is okay with that.

If you want more on this, see this excellent article by commercial transaction firm Faegre and Benson:

Friday, September 24, 2010

November Dubai EB-5 Event Filling Up Quickly

Folks, we opened registration for the EB-5 Seminar in Dubai after Labor Day and registrations for the free November 17th event, which will take place at the Shangri-La Dubai, are pouring in.  We have only made folks aware of this through Immigration Insider and few online mentions here and there and already have filled about 30% of the 70 available seats.

There are a lot of EB-5 events going on all over the world, but our presentation is unlike anything you've seen or heard.  Instead of being "sold" anything, I will cut through all the baloney -- and that's putting it politely -- being pumped out by the vast majority or U.S. EB-5 Regional Centers and developers looking for YOUR investor dollars.  Attendees will hear:

  • why, as a former U.S. visa officer and EB-5 cynic, I did a 180 degree turnaround on the subject several years ago and now believe that a handful of select Regional Centers ARE smart green card AND financial investments;

  • why I am the ONLY U.S. attorney who is willing to hold attorneys fees in trust until your I-526 Investor Visa petition is approved...I don't get paid until you get approved;

  • the differences, pros, and cons of an individual EB-5 investment vs. an EB-5 Regional Center investment and how we can custom tailor an individual plan for you which stays within the $500,000 investment cap;

  • Pre-immigration tax planning and why it is IMPERATIVE, and why other laws sweep the issue under the rug

  • how so many EB5 Regional Centers hide their fundamental flaws in terms of protecting your investment, securing the 10-jobs-per-investor, and general partner "omnipotence"

  • the importance of an exit strategy which is REAL

  • the online LIES perpetuated by a number of "leading" Regional Centers

  • why most immigration attorneys don't examine the fundamental structure of the EB-5 Regional Center they are recommending

  • why the due diligence conducted on the underlying owners and general partners is far more critical than the DD you do on the particular investment project

  • the dangers of certain "Umbrella" Regional Centers

  • How most equity-based EB-5 Regional Center projects wind up losing hundreds of thousands of dollars

  • WHICH are the "handful" of Regional Centers which meet my exacting criteria and why I am willing to make your visa approval a pre-requisite to my getting paid for the immigration work.

So far, only a small percentage of the folks coming to the Dubai seminar are resident in the UAE...most are coming in from other countries for the event, including Kazakhstan, Lebanon, Iran, Iraq, Kuwait, Jordan, and Saudi Arabia.  I am presenting the seminar for free because this is the first visit I make to your part of the world and I am looking to forge bona fide, lasting relationships with Middle Eastern investors who are qualified to invest for U.S. permanent residency and who are planning a future in America.  I invite you to join us at this debut event since it may not be repeated for another year or so, and since there will be a seminar fee in future events.

If you are in the position to invest $500,000 to secure permanent U.S. residency for you and your family and want to learn more, please join us at the beautiful Shangri-La Dubai on November 17, 2010, for what promises to be a dynamic presentation, a lively Q & A session, both followed by several days of private client assessments to help you in building your migration plan to the U.S.

Here's the link:   Latour's EB-5 Investor Seminar-DUBAI 

See you in November!!

Tuesday, September 14, 2010

As Cuba Admits Failure, Venezuela Continues Its Economic Death Spiral

The pain in the eyes of the Venezuelans I see these days is more palpable and more real than the concern across their faces as early as last fall, when I began visiting clients in Caracas and discussing the EB-5 immigrant investor "just in case" Plan B option.  While there has been a steady and growing concern that Mr. Chavez' continued mismanagement of this resource-rich paradise would lead to ruin, the reality of being the world's 8th largest petroleum producer seemed to provide some sort of invisible credibility forcefield.  If I heard it once, I heard it a thousand times: "If it wasn't for the oil revenues, [fill in the catastrophe of your choice]"...

Well, the shields are down, my friends, and it is heartbreaking to see the cold statistics.  For a great detailed article on just how ugly things have gotten, click HERE, but here's the nitty gritty:

-the Economist's most recent report
forecasts that gross domestic product in Venezuela will decline by 5.5 percent in 2010. Next worst
is Greece, with a 3.9 percent decline. Analysts at Morgan
Stanley worry th
at Venezuela is moving toward debt Greece.

-GDP is expected to fall by 6.2 percent in 2010.

-Inflation, where Venezuela sets the current international standard: consumer prices are already up 31 percent for 2010 and
are expected to rise more by year-end. Only two of the remaining 56
nations monitored by the Economist are suffering double-digit inflation: India and Egypt, both with 11 percent price increases.

-Crime: Caracas now has
nine times the homicides per 100,000 people as Bogota and 15 times the
rate of Sao Paulo. Overall, according to Newsweek,
Venezuela has “the worst murder rate in the hemisphere”

-Retail sales were
down 12 percent in the first half of the year; sales of food,
beverages, and tobacco in specialty stores were off 30 percent.

I still remember visiting Venezuela as a little boy and seeing the splendor and comfort with which my uncle, a middle manager for Owens-Illinois (the U.S. packaging company), lived in Valencia.  Like so many Cubans who saw their lives, their properties, and their culture disemboweled via expropriation by a dictator, today's Venezuelans are witnessing the very same process...courtesy of their democratically elected president.

Let's hope that on Sept. 26 Venezuelans seize the opportunity to tell Mr. Chavez that they've had enough of his leadership.

Friday, September 10, 2010

Venezuela's Land Redistribution is Taking a Very Human Toll

As Chavez continues to eviscerate the Venezuelan economy through corruption and mismanagement, the expropriation of private lands has remained somewhat on the back burner in terms of topics of discussion between my clients and me.  While I have had more than one client whose farms have been stolen by the government, no one I have personally met has lost his or her livelihood as a result.

Unlike the rapid-fire expropriation of all private property in Cuba undertaken by Mr. Chavez' puppet master Fidel shortly after lying his way into power through flat out denials of his communist agenda, Mr. Chavez' expropriations have been very much in his own personal style:  haphazard, inconsistent, and driven by little visible strategy.  Instead of the immediate redesignation of private property as state property, the Venezuelan government seems to be parceling out private property as a means of ensuring continued support by the poorest Venezuelans.

To me, from my point of view as an attorney focused on investment based immigration, the human elements of my job tend to deal more with families: the threat of kidnapping, the random violence, the constant governmental meddling which impacts the lives of entrepreneurial Venezuelans.  To date it hasn't been about the impact of these expropriations.

That's changing, and it is visible via the increasing number of still-affluent Venezuelans with still-prospering business quietly making their way to my office to begin the complex process of planning the big move.  They've had it and they are reluctantly coming to terms with the fact that they cannot continue to build their empires, large and small, on the slippery, muddy foundation of Chavizmo. Being one of the very few immigration attorneys who will NOT initiate an investor petition until my client has addressed pre-immigration tax planning via an expert like the brilliant Steven Cantor, these are busy days full of big decisions for my Venezuelan clients as we discuss everything from schools to housing to business transition plans.  They don't want to leave their beautiful country, but just like my father reluctantly left Cuba as it slipped toward catastrophe, they are leaving their beautiful country, in what looks an awful lot like a slow-motion sequel.

Perhaps Mr. Castro's admission to The Atlantic that the Cuban economy is a failure would have tempered Mr. Chavez' emulation of the Cuban Revolution had it been made years ago, but it's too late now.  Despite his mentor's eating crow pie, for Mr. Chavez this is now completely about one thing: Mr. Chavez.  Megalomania is never pretty, but fueled with petrodollars and protected by a military regime, it's particularly ugly in Venezuela.

Today it's farms and banks, tomorrow it will be grocery stores and pharmacies...we know the drill.  One can only hope that like in The Emperor's New Clothes, all Venezuelans, rich and poor, will call Mr. Chavez on his smoke and mirrors and reveal him as he really is.  Now THAT is a terrifying image...(-:

For a great Herald Editorial discussing this subject, click: HERE

Wednesday, September 8, 2010

Imagine What a BIG EB-5 Regional Center Would Look Like...

favorite dumb EB-5 marketing quote of the week:

are a small regional center…our center can only accommodate up to 320 clients.”

like a cozy little venture, eh? (-:  I’ll
tell you guys, in this colorful world of EB-5 Regional Centers, there is never
a dull moment. But sometimes the hyperbole associated with the marketing of
EB-5 RC projects goes totally overboard and kind of makes the whole sector look
ridiculous.  In fact, I've had more than one savvy investor who really WAS
interested in the EB-5 but concluded it was all shady business after wading through
the muck of several bombastic RCs promising the world.

misconception further perpetuated by both Regional Centers and those who market
them is that "bigger is better".  While one cannot quarrel with
historical facts such as the number of approved I-526s or I-829s, there is
often a tendency for prospective investors to come through the door asking
"who has the most approvals?"  It's a good question; but it is
only part of the picture.  The other part: “how likely are the investors
to recoup their investment.”  In reality,
Congress crafted the EB-5 visa way back in 1990 (or thereabouts) so that
investors who took a legitimate risk
with their investment could not only get their permanent U.S. residency…but
maybe even make a buck.  Revolutionary!

as history shows, some of the largest and most successful equity-based programs
got those impressive approval numbers without addressing that second part of
the question…and only now is the real downside coming to light.

 What downside?  I'll answer that by
asking you a question:

“Where is the market for private equity
investment limited partnership shares?

tell you where: Nowheresville!  When you're finished with permanent
residency and it's time to cash out, what is the exit strategy for an
equity-based EB-5 Regional Center?  Well, in the vast majority of cases
involving non-branded equities (as opposed to recognized franchises showing a
profit) there is only one interested buyer: the General Partner who got you in
the Regional Center in the first place. 
In fact, the GP isn't interested at all in letting you out;  they’d just as soon you keep those hyper-inflated
condos in the money-losing rental pool and just go away.  But if you make enough noise, some will give
you a fraction of your $500,000 to make you quietly go away.

have changed in these past years since CMB invented their brilliant loan-based
model, now emulated (less brilliantly, I should add) by an increasing number of
RCs, and more recently, when folks like Queensfort have compartmentalized
single-store Sonic franchises for small groups of 8-10 investors, providing the
kind of LP protections never before offered to EB-5 investors in an
equity-based project.  With those kind of options, does it really make
sense to go "old school equity"?  I mean, do you really want to own three condos with
maintenance fees for the foreseeable future? Not me.

client the other day said something that made me smile: "Jose, anyone who
goes into EB-5 expecting their $500,000 investment back in full is
dreaming".  I had to disagree! 
I told him that “the better mousetraps”, in both equity and loan
incarnations, have been built, and no longer is it necessary to think of the
EB-5 investment as the “purchase price” for your green card.  For some
very smart investors, the green card is coming with a tidy return and, someday,
maybe a profit.
Hey, it can happen!

fact, however, is that risk is the non-negotiable, quintessential element which
everyone avoided in the 90s and which drove this wonderful visa category into
the ground faster than you could say "creative financing". 
Anybody besides me remember Golden Rainbow?  
As so eloquently state by the 9th Circuit U.S. Court of Appeals:

long and short of it is that they lost their gamble that Golden Rainbow's
creative financing approach would manage to get through the whole process. The
INS finally acted to prevent a perversion of the program contemplated in the
statutes and the regulations. The mischief that was avoided far outweighed any
detriment to Golden Rainbow or anyone else."

don't get fooled by stats, and do not let your immigration attorney
weenie out of opining on the EB-5 project you are considering; we may not be
investment advisers, and we may make you sign 50 pages of disclaimers saying as
much, but we have a duty to view all elements of the investment vehicle you choose,
be it an EB-5 or an L-1, since that is the basis upon which your immigration objective will be judged.  Educate
yourself before investing and dispense with the notion that “bigger is better”;
times are a changin’…talk to me if you have questions! J

Monday, August 30, 2010

SIGN UP OPEN: Dubai EB-5 Seminar Wednesday, Nov 17, 2010 @ Shangri La

Better late than never: I've been telling a number of our readers in the Middle East that the sign up for the Dubai EB-5 Investor Seminar would be up soon....and it finally is.  We'll have a Farsi version up ASAP.

Sign up here for: Latour's Dubai Investor Visa Seminar Nov. 17

My international marketing partner, Namjoo Hashemi, will be joining me in presenting a comprehensive EB-5 seminar which will address a lot of the questions and concerns most of my, ahem, brethren, fail to mention when they are speaking of the wonders of EB-5 investor visas.  There are a LOT of really, REALLY bad EB-5 programs...and but a handful of good ones.  Attend and I'll tell you exactly why.

The event - free to pre-qualified investors - is going to be a provocative 2+ hour barrage of nitty gritty truth about which EB5s make sense, including the USCIS-pending Lake Point EcoVentures Regional Center, the first EB5RC lovingly crafted from the ground up by yours truly, and a variety of individual EB-5 properties and operations we've pre-vetted for EB-5 compliance purposes.  After the seminar, we'll open the floor up to a comprehensive Q and A where we can hopefully clarify a lot of the mumbo jumbo being marketed to prospective EB-5 investors.  I'll be sticking around for several days at the Shangri La for one-on-ones for those folks ready to move forward.

I know many of you will be in holiday that week, and that's why Namjoo picked the dates; it's a great excuse to write off that Dubai weekend you were thinking about planning anyway!  So far we have folks coming from Iran, Kazakhstan, and Kuwait.  We've got 70 seats and they are going fast, so register before I change my mind and decide to charge you guys for all this high quality intel...(-;

Cheers! Jose

Saturday, August 21, 2010

Mexico's Drug Wars Making My Phone Ring

When I was a  young Vice Consul in Ciudad Juarez, Mexico, it was hardly paradise.  Juarez was a big, booming desert town characterized by endless maquiladora factories, blistering heat, and a vast income gap between the very rich who lived behind guard entrances in plush mansions and the vast majority who didn't.  The neighborhood in which we lived, San Marcos, was home to several U.S. diplomats and another crowd; the nickname for the neighborhood was "San Narcos".

Still, you didn't know if the smiling guy across the street with the new bulletproof Benz was a drug dealer, a corrupt politician, or just one of the successful maquila owners.  No shoot outs, nothing external - save the lavish mansions and the fact that no one seemed to have a work schedule --to suggest that the drug trade was behind all the money.  Most of these folks -- including a number of my friends who were very legitimate businessmen with successful enterprises -- had a place up in the mountains of Ruidoso, New Mexico, two hours and light years away.  We weekended there often, leaving the dusty, garbage strewn, scorching summers of Juarez, stopping for brunch at Mesilla's Double Eagle Inn (possibly the best brunch on earth at the time), then winding up through apple and cherry farms, and generally ending up in Cloudcroft, a cool mountain haven in the summer and an alpine winter wonderland in that season.  I would estimate that a quarter of the folks you'd meet there were Mexican nationals with a mountain weekend getaway, all hailing from Juarez.

This was, of course, long before September 11th changed the world, and all these Mexicans had "micas", the border crossing card issued by then-INS.  No I-94s were issued and just as the those without visas would hop the fence to go shopping in downtown El Paso and hop the fence back to Juarez later that afternoon, laden with purchases (occasionally hailing a Border Patrol van for a free lift back to the Bridge of the Americas), so would the wealthy Mexicans flash their micas and head up the mountains for a weekend in New Mexico.  Sunday, it was back to Juarez. 

Things have changed.  In fact, based upon the information I am getting from my friends and contacts in Northern Mexico, there are an awful lot of folks who are NOT heading back to Juarez on Sunday.  Hundreds - maybe THOUSANDS -- of affluent Mexicans from Juarez are instead staying in the U.S., and many have bought homes in El Paso.  Put simply, there is a growing population of wealthy Mexicans living illegally in the U.S. because the situation on the other side of the border has deteriorated to the point where they fear for the lives of their loved ones.  Now, it's dad who heads back from Ruidoso to Juarez on Sunday night, or who commutes daily to Juarez from El Paso.  Now, I'm getting calls from folks who would have never considered immigrating to the U.S. and they are saying the same thing: "Jose, get us out of here."  And no, they will NOT let me visit them in's El Paso where we'll meet, and I can't even say where because they are afraid of what could happen, even on the U.S. side, if the wrong folks learned of our meetings.  Scary stuff.

As I described when I wrote of my very intense visit to Juarez last December, the violence behind the drug wars has permeated all levels of Mexican society:  this morning's Wall Street Journal  has a front page cover shot of the alleged murderers of a Mexican mayor...six police officers.  The nation was shocked with the brazen and brutal murder; now it ponders what the identity of the perpetrators means to the nation.

One of my best Mexican friends use to have a saying: "Poor Mexico: so far from God yet so close to the United States."  For the privileged Mexican families who are able to invest their way out of a spectacular, beautiful, and rich nation which has deteriorated into chaos, the latter part of that saying may not be such a  bad thing.

Wednesday, August 18, 2010

Obama Socks it to U.S. H-1B and L Visa Employers

when I think I’m starting to figure out this very bright man for whom I voted
as President, another dumb move from the Obama White House.  Last week, he signed into law a so-called “border
enforcement” bill which I had assumed was part and parcel of the ongoing
response to what Arizona started.  But as
so often happens with legislation (and sausage-making), it’s the stuff that isn’t
listed on the box that they sneak past you.

out that Public Law 111-230 doesn’t just address the border…it hammers American
companies which were already paying huge fees for the
foreign workers they have to hire because they can’t find U.S. workers for the
job.  Now, if more than half of the
employers’ workers are on L or H-1B visa status and the company has more than
50 employees at their U.S. operation, the so-called "filing fee and fraud
prevention and detection fee" jumps by $2250.  If a company with 50 or more employees has a U.S.
workforce which is more than 50% L visas, that company will pay an extra $2000
for that fee.

Tata’s online buzz has folks posting
that this law is specifically anti-India, and I’m afraid I agree.  The big IT consulting companies will be hit
hardest with the new rule, and the same thing will happen.  Just as Bill Gates said “the heck with it”
and moved a large plant from Washington to Canada when Washington clobbered his
ability to hire H-1Bs, and just as hundreds of REAL U.S. jobs vanished in the
blink of an eye, expect the big Indian firms to head out of the U.S., and more
unemployed Americans.


Capitol Hill and White House: India is not on the U.S. border, but we sure are
reliant on their professionals for our technology.

Thursday, August 12, 2010

The Dynamics of U.S. Birthright

Immigration is the topic du jour yet again today and I wanted to share some thoughts.  This morning's Miami Herald blasts several Republicans who are proposing the elimination of the 14th Amendment to the U.S. Constitution, which grants U.S. citizenship to anyone born in the U.S.  Meanwhile, on the front page of today's Wall Street Journal, is an equally volatile headline: "Illegal Immigrants Estimated to Account for 1 in 12 U.S. Births".

Both articles make good points about each issue: the Herald points out that such a change would be radical departure from the American concept of inclusiveness.  The WSJ, in turn, tells us that undocumented immigrants make up slightly more than 4% of the U.S. adult
population. However, their babies represented twice that share, or 8%,
of all births on U.S. soil. Of these, 85% of births are to Hispanic parents illegally in the U.S.

As an immigration attorney, I am always wary of "reforms" which target specific groups within our population.  That being said, as a former U.S. consular officer who served in Ciudad Juarez when it was the busiest immigrant visa post in the world, I also have a difficult time ignoring realities I have experienced first hand.  Take me comments for what they are - one person's experienced-based observations - and no more:

  • The Herald editorial state "The immigrants who have babies here do not come to give birth. They come for jobs."  I just had a lively discussion on this very subject with Melissa, who agrees with that assertion.  Well, I disagree.  When I worked as both a visa officer and U.S. citizen services officer in Mexico, I personally interviewed thousands of Mexican nationals and their U.S. born children.  Virtually all of them volunteered, as I registered the child's U.S. birth or, more often, issued IR-5 immediate relative visas for the parents of a U.S. citizen, that the consular event in which they were participating was a planned event designed for the dual purposes of establishing a migration path for the family and to give the child the privileges associated with U.S. citizenship.  Except for a tiny percentage of affluent Mexicans working legally in the U.S., the vast majority of the births occurred in U.S. hospitals and the uninsured parents did not bear the costs associated with the delivery and aftercare.  So, no, they don't just "come for jobs", and if you think I'm wrong, go take a look at the Mexican wait times in the family preference categories and explain THAT to me.

  • The 14th Amendment and a U.S. birthright is and was another noble fine tuning of the best Constitution on earth and its purpose was laudable.  However, this notion that removing such birthright reverts the U.S. to the Dark Ages is historically wrong: many modern countries still have laws which convey the citizenship of the PARENTS to the child born in country; such has and is the case with persons in diplomatic status. Jus Sanguinis vs. Jus Soli is too complex for here but, basically, the notion that a child acquires the citizenship of her parents wherever she is born is very old and pragmatic.  (If you want to see more on this, go Wiki's Explanation of Jus Sanguinis and Jus Soli ).

So, you see, things aren't as simple as they seem.  When the child of foreign parents is born in the U.S., he or she acquires not one but TWO nationalities: U.S. (by virtue of the 14th amendment) and their parents' (by virtue of jus sanguinis, in every nationality I have ever encountered.  The implications of the Herald editorial is that the child would somehow be "stateless" if he or she is denied U.S. citizenship at birth.  In reality, he or she acquires the nationality of the parents...just not BOTH. And I can tell you from my deep love of the Constitution and the years I've poured over it, the 14th Amendment was not enacted for the purpose of insuring dual nationality.

One thing is for sure: the WSJ article and underlying study is going to create a huge public backlash, and I understand that.  In 1991, when my younger son Danny was born at Baptist Hospital right here in Miami, I nearly fainted when I was charged $20 for an extra box of Kleenex for Leah.  Unable to keep my big mouth shut, I complained loudly, and that in turn led to an extraordinary meeting with Baptist's financial folks. Back then, they explained to me that about half of the births at this beautiful maternity ward were the births of children of illegal aliens.  HOW? I asked.  The answer: the parents knew about Baptist's private maternity suites and top notch care and they would sit outside the emergency room until the baby's head was crowning.  When that happened, the ER HAD to admit the mother and the childbirth and aftercare was funded totally by Baptist, since neither federal nor state funds reimbursed them.

I'm not sure it's time to change the 14th Amendment but, unlike Melissa, I don't think the building of an impenetrable, Berlin-Wall-type southern border is even possible.  And from what I've seen in the last two and a half decades of this immigration business, I disagree with the Herald: people come to America for a LOT more reasons than to get a job.  Ellis Island wasn't a staffing agency, nor is our southern border.

And I'm STILL mad about the $20 box of Kleenex...(-;

Wall Street Journal Today on Illegal Immigrant Births in U.S.

Miami Herald Op Ed re 14th Amendment

Wednesday, August 11, 2010

Heads Up, EB-5 Regional Centers: "Accredited Investor" Redefined Under Dodd-Frank

First off, serious kudos to Akerman for their on-point memo (see bottom of blog for link to their site) on this subject; it was totally under the radar till I saw it there and incredibly important from an SEC compliance standpoint, as much for Regional Centers qualifying investors as for immigration attorneys representing clients.

As it has been defined until the new law, he term “accredited investor” included any natural person whose net
worth, either individually or jointly with his or her spouse, exceeded
one million dollars ($1,000,000), including the value of the investor’s
primary residence, or whose individual or joint income exceeded certain thresholds...AND the person didn't expect things to change dramatically anytime soon.  This has been somewhat glossed over by many in our business and I can't tell you how many prospective EB-5 investors have been sent my way...only to have my basic inquiry reveal that they did NOT meet the requirements.  Moreover, in countries where things are getting scary (i.e., Mexico, Venezuela, South Korea, etc.), there are a LOT of folks exploring the EB-5...many of them folks who, but for their homestead, do NOT meet the definition.

Here's what just changed and what matters:  on July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank” or the “Act”).  Since the EB5 was created, it has operated under this so-called "Reg D" exemption.  Regulation D provides a safe harbor exemption from registration under the Securities Actfor the private placement of securities to accredited investors.  The big news: the new definition of the term “accredited investor” under Rule 501 of Regulation D and Rule 215 of the Securities Act of 1933 excludes the value of a primary residence for purposes of calculating a natural person’s net worth.

The bottom line: stop glossing over the threshold, guys.  The SEC is sniffing us out as a sector and EB-5 compliance will not be exclusively USCIS business forever.

Akerman's Article

Et tu, Bill? Florida's Politicking Attorney General McCollum Switch Hits on Immigration

Apparently there is an epidemic of constitutional amnesia/shameless pandering affecting state Attorneys General throughout the country.  As I told you last week, first it was Virginia State Attorney Cuccinelli opining that local law enforcement officers
can arrest those they suspect of committing criminal violations of
immigration laws -- crossing the border -- but not those they think have
violated civil immigration statutes -- overstaying visas
. Rather paradoxically, he added that that it is generally
"inadvisable" to arrest those suspected of committing civil violations.
"The ability to arrest lies clearly when there is a criminal offense and
it is decidedly unclear where there is a civil offense," he said.  In other words..."HUH??"  As if a police officer is trained to distinguish a civil immigration infraction from one which is criminal.  And never mind the part about immigration being constitutionally reserved as a federal power, something affirmed instantly the minute the Arizona law was challenged in federal court.

Now it's Florida State Attorney Bill McCollum's turn at the podium of politicians pandering for votes: first he opposed the Arizona legislation; next he liked it.  This past Monday he hinted that something like it would be revealed in several weeks...and unveiled it two days later.  Detecting a pattern here?  The truth is that the frustration with illegal immigration is an emotional hot button and like so many politicians who both understand the fundamental legal reasons why states are inherently unauthorized to enforce immigration and realize the arresting and deporting the core blue collar workforce of the economy is just plain stupid, Mr. McCollum has cashed in his karma and cranked out a really silly piece of legislation literally overnight.

The Miami Herald reported today that McCollum's proposal differs from the Arizona law in that it would
allow judges to consider immigration status when setting a bond. Illegal
immigrants would also face stiffer criminal sentences than legal
residents who committed the same crime. But here's one for the guys in the Home Depot parking lot: soliciting employment as an illegal
immigrant would also become a crime

Something tells me all those unemployed law and architecture grads won't be lining up to install your sod. (-:

And finally, in the grandiose tradition of double talk nonsense with no plausible consistent way of enforcement, leaving Florida police as confused as those in Virginia, my favorite McCollum quote:

``It's not how you look, it's not what you say."

No, Mr. McCollum, it's how THEY VOTE, and you should be even more ashamed than the Virgina State Attorney given your experience with the reality of Florida's unique immigration issues.