Friday, December 16, 2011

CONGRATS Queensfort Sonic: First Investor is Their First I-526 Approval!

Congratulations out to Arthur, Carolina, and all the folks at Queensfort/Sonic for their first I-526 approval!   The EB-5 investor, who wanted an equity-based EB-5 project, contacted me via Immigration Insider.   He was the first to invest in QS and LatourLaw filed his I-526 - their first.  Fittingly, the first of many QS I-526s now in the pipeline was the first to be approved by USCIS.


As my readers know, I have been pretty critical of the equity-based EB-5 structures I've seen;  the structure put together by Queensfort, however, is an entirely different animal.  Instead of putting the EB-5 investor's interests last (as virtually all I've reviewed do), an innovative series of protections are in place for EB-5 Limited Partners.  It took Carolina hammering me over the head for a few weeks before I understood, but I finally got it.   Their brilliant "Floridizing" of the venerable Sonic brand into "Sonic Beach" is the right product at the right time, as evidenced by the 3 block long line of cars at the drive through I witnessed at their first Grand Opening.  Just as the mighty CMB redefined EB-5 investor protection through their meticulous structuring of the first successful loan-based EB-5 program, Queensfort proved to me that not ALL equity models are bad, and that it IS possible to create equity-based EB-5 structures which are fair to the EB-5 investor. 


Sharon and I will continue to bring you the very best EB-5 projects we find, whether loan-based or equity-based.  The lesson repeats itself daily: an EB-5 opportunity is only as sound as the integrity of its General Partner...period.


Miss Carolina, I believe you now owe me at least three martinis...(-;


See Sonic Beach's Site



Tuesday, December 13, 2011

Important Tax Update for Expats

Steve Cantor and Hal Webb are among the best private client tax practioners in the U.S. and, fortunately for me and many of my clients, located right here in Miami.  Today the firm sent out an email advising of recent IRS guidance for U.S. Citizens or Dual Citizens Residing Outside the U.S.  Because many of our clients remain overseas while having business activities and investments in the U.S., and because many are dual nationals, I wanted to share this with you.

On a side note: we have worked with Steve and Hal for years in assisting our foreign private clients and we do so on a "no referral fee" basis.  Our "payoff" is in knowing that our immigration clients are in the best possible tax-planning hands.  Please contact them directly if you need sophisticated tax planning support and tell them Jose sent you! J

In answer to the tax reporting concerns of many United States citizens and dual citizens who live outside the United States, the Internal Revenue Service just announced additional guidance.  Please visit the following link to view a full copy of the IRS Fact Sheet 2011-13


Should you have any questions or if we can be of assistance to you, please contact us at your earliest convenience.


Best regards,


Cantor & Webb P.A.


1001 Brickell Bay Drive, Suite 3112, Miami, FL 33131 - USA


Telephone (305) 374-3886 - Fax (305) 371-4564






Monday, December 5, 2011

HELP! Miami Office Needs Admin Assistant: Fluent Mandarin Required

Folks, I posted an ad earlier and got several attorneys applying...I apologize for the confusion.  I am actually looking for an Administrative Assistant who is fully fluent in Mandarin.  This person will be serving as my primary "vocal chord" in Miami so poor Sharon doesn't have to spend her valuable time translating and interacting on my behalf with our partners and investors in China.  I'm looking for one VERY sharp cookie who wants to come along for what appears to be a pretty exciting EB-5 ride next year, so if you know that person, PLEASE pass this along!  Thx, J


P.S. below is the Craigslist job posting FYI


Midtown-area (Miami) law firm seeking full time Administrative Assistant with the following minimum qualifications:



  •  NATIVE fluency in written and spoken Mandarin Chinese

  • AA or BS/BA in any field

  • Advanced skills in Excel, Quickbooks, Word, and PowerPoint, and the ability to write, edit, and publish basic HTML. 


SEO experience would be excellent; we are seeking candidates already in South Florida and the position is available immediately.  F-1 with EAD okay, would consider H-1B/PERM sponsorship for the right candidate who proves his/her abilities.  Please send your c.v. and cover letter to jlatour@latourlaw.com.



Sunday, December 4, 2011

Sinophobia Rears its Ugly Head: Mamtek's Forgotten EB-5 Investors

Remember October 13th's Immigration Insider, On Trust and EB-5 Marketing in China, where I mentioned Missouri's Mamtek EB-5 mess, where a number of EB-5 investors from China got taken for a ride, along with the State of Missouri?  Well, it's finally making the mainstream media in the U.S...and it sounds like the whole mess is the FAULT of the Chinese!


In a rather comprehensive Associated Press Article on Failed Job Creation Plans, the writer opens by describing Mamtek as "A global company with Chinese ownership"...leaving the reader with the impression that the only victims were in Missouri, and that the perpetrators were from China.  Nothing could be further from the truth: the former Chairman and President of Mamtek was California Attorney Bruce Cole .  Mr. Cole's very distinguished resume, as you can see in that link, suggests a long-standing involvement in business in China and Hong Kong.  After the company imploded -- maybe before or during, it isn't clear -Mamtek at some point named a new president,  another California attorney, this one a bankruptcy lawyer named Peter Kravitz.  (Mamtek's former attorney, Steven Peden, had said to the press a few months ago that he believed Mamtek plans to work out a payment plan to avoid bankruptcy court...sure isn't looking that way.)


Doesn't sound very "Chinese owned" to me.


The AP article not only mischaracterizes the underlying ownership of Mamtek, but totally omits the fact that 15 Chinese investors lost both their $500,000 (plus whatever other fees) AND their shot at U.S. permanent residency.  That stings a lot more than Missouri's loss of their $39 million of taxpayer dollars.  The latter is the bumbling of public funds, hardly a novelty in America (or, for that matter, anywhere);  the former is a half a million hard-earned bucks out of an individuals pocket.  Ouch!  The greatest irony in all of this is that the Chinese players who WERE involved were innocent investors -- and a top-tier Chinese migration agency with an otherwise-sterling reputation.  Sharon and I know the folks at this particular agency (whose name I won't mention because they've gotten enough misleading press already) and we know for a fact they will be, when all is said and done and they've squared with their investors, the biggest victim of all.


This whole business of blaming China for American EB-5 disasters is quite tiresome.  There are hundreds of registered Chinese migration agencies in China and the vast majority know as much about EB-5 as I know about molecular biology.  Most are purely commission driven and their lousy reputations are hardly a secret.  A small number of them - such as the agency which marketed Mamtek in China -- are stellar organizations owned and managed by individuals with impeccable credentials and a history of fair dealing and aggressively protecting the interests of their migrating clients. 


The reasons the "Mamteks" of the EB-5 world happen has nothing to do with folks on the other side of the Pacific.  They happen because of the Gordon-Gecko-esque "greed is good" mentality which is pervasive in too large a portion of the U.S. EB-5 sector. 


 


 


 


 



Friday, December 2, 2011

Absolutely Miami...About Time!

A vodka named Miami? Absolutely - Art Basel - MiamiHerald.com.

EB-5 Won't Be the Only Chinese Money Creating U.S. Jobs

With Sinophobia now officially hitting the Republican primary debates (astonishingly triggered by no less than the former U.S. Ambassador to China Jon Huntsman -- excellent Christian Science Monitor article HERE ), the Chinese government's announcement that it wants to bankroll U.S. infrastructure is a game-changer...and a reality check for those who continue to view U.S./China relations with a lingering Cold War attitude.


While it isn't a startling revelation to my particular readership, the American public in general would be dismayed to learn that China has over $1 trillion invested in U.S. bonds.  That kind of economic might is precisely what feeds the xenophobia that seems to make for such good political posturing in this climate of a stalled U.S. economy.  Historically -- and the examples are many -- the combination of our blessed North American bounty and the buffering of two large oceans on our left and our right -- we've reacted in times like these by further closing our economic doors to those economically stronger than us.


If you read the CSM article linked above between the lines, Ambassador Huntsman's comments are as pragmatic as they are optimistic: in a global economy, America's continued economic cooperation with China is not only prudent...it is necessary.  It blows my Libertarian mind (at least that's what my label-loving cousin says I am) that the former U.S. Ambassador to China himself has to pussyfoot lest he sounds too "Pro-China".


Well, since I'm not running for anything (expect perhaps a proper post-Art-Basel martini at some point this evening) I'll say what Ambassador Huntsman CAN'T say publically:  the Chinese government - with all its dents, blemishes, and problems - is making a grand diplomatic gesture by announcing that its currently passive U.S. investments should be instead channeled toward improving U.S. infrastructure and creating American jobs.  The Chinese KNOW that without an economically strong America, they will never return to those wonderful days of three-production-shifts and triple digit expansion...and languish, the poor dears, in those double digits of economic gain which are causing such stress back home.


A good weekend to all. JEL


Minister: China wants to invest in US roads, rails - National Business - MiamiHerald.com.



Wednesday, November 23, 2011

Art Lexing About to Rock Art Basel

UPDATE:  Art Lexing will be at Booth A5 of Art Asia...come see us!!


The extraordinarily talented Lexing Zhang is back in Miami as part of her ever-churning cycle of life as an art troubadour.  Lexing, my client and good friend, is a Chinese contemporary art broker based in Shanghai and Paris, and she's back for next week's Art Asia (during Art Basel) at Midtown Miami, right around the corner from our Biscayne office.


With half as many featured Chinese artists in four times the booth space she had last year, this year's collection by Art Lexing offers three very different contemporary Chinese artists using different media and creating a compelling contrast with each other, mirroring the traditional elements of today's uber-urbanized China.  Take a look at the attached press release and come see us at Art Asia, I'll be manning the booth with Lexing for much of next week! Download ART LEXING presents Quentin Shih at Art Asia Miami 2011_November 2011



JOB OPENING IN MIAMI: Fluent Written and Spoken Mandarin Required

F-1 with EAD okay, will sponsor H-1B for the right person. Qualifications:



  • Must be TRULY fluent in business Chinese, as in native-level fluency

  • Prefer AA or BS in business, English, or IT but open to all educational BGs

  • Must be fully competent in Excel, Word, PowerPoint, and possess the ability to write, edit, and publish basic HTML

  • SEO experience would be very relevant

  • Candidates already in South Florida are preferred, position is available immediately


Please send your c.v. and cover letter to jlatour@latourlaw.com.



Tuesday, November 15, 2011

The China Real Estate Market and Its Effect on EB-5 Investment

I’ve been trying for a few months now to explain to my Regional Center and EB-5 Project clients the nature of “hot money” in China, and why I believe we in America have a unique opportunity right now to drive EB-5 capital to our shores.  In the past three weeks with Sharon, traipsing through a half dozen Chinese cities, presenting dozens of seminars for Lake Point EcoVentures, and speaking with hundreds of investors, I’ve been able to go a little deeper into this subject.  This blog entry will attempt to convey what I have learned but I will begin by warning you: this will only be of interest to those of you contemplating EB-5 financing for your project. 


“Hot money” isn’t bad like it sounds. The Federation of American Scientists (FAS) has a great article on "hot money" in China here.  Originally referring to the massive foreign investment entering China from abroad, within the context of current Chinese economic reality, “hot money” refers to perfectly legal, properly earned capital which is “hot” only because it has nowhere to be invested.  Whether foreign or domestic in origin, China is overflowing with investment capital, and it's getting worse. 


Consider the real estate market in China as an example of the problem: when the Chinese real estate market started to become a speculative mine field racing out of control, the government stepped in and did a number of things which we in America would consider, well, un-American.  Things like mandating strict policies to prohibit real estate speculation and forcibly cooling sales to drop housing prices.   A notable policy differentiation from our own on Wall Street, i.e., fabricating catastrophic, interest-only mortgage structures, inviting buyers to fabricate income levels, creating a mythology of infinite appreciation, marketing directly to greed (“get in now before prices go UPUPUP!”), and fueling rampant speculation by the uber un-savvy… ultimately leading to the collapse of the American financial system.  (Look, folks, I’m not advocating the Chinese alternative to a truly free market but let’s be honest here: freedom comes with a price.  If instead of kowtowing to Wall Street’s ludicrous reassurances our government had even SLIGHTLY “taken over Wall Street” way back when the you-know-what hit the fan, things would be pretty different today in America.  Despite our chuckling, Gordon Gecko was wrong: greed isn’t good.)


China’s Premier Wen Jiabao reiterated Sunday:


“We would like to stress that there is no possibility of loosening the real estate policies.  Our target is to let the property price fall to a reasonable value.”


And therein, as David Carradine so beautifully put it in Kill Bill, lies the problem:  no investor – Chinese, American, or Martian – wants their government to decide what is “reasonable” in a free economy.  As a result of this policy, China’s real estate brokerage industry is starting to look like ours (figures taken from November 8th China Daily) : 



  • Shenzhen’s mighty Centaline announced Thursday that it is closing 60 offices and laying off of 1000 workers;

  • Century 21 China shuttered 34 offices in the first half of this year and more since.

  • Beijing’s Geland closed 50 offices in February when the government had last stated that the policy would not be lifted;

  • The sale of pre-owned homes has dropped nearly 50% on an annualized basis.


How about that?  All roads lead to Rome, it would appear, regardless of who’s in charge; alternatively, no matter where you go…there you are.  Like the hunting of deer to cull overpopulated forests, the Chinese government is culling the real estate sector until it returns to a “reasonable” state.  And so, while the poor Chinese RE industry is culled, investor funds pool into “hot money” as RE investment opportunities become increasingly scarce.


If there is one thing we have learned about China in the past decade, it is its might.  Like the concept of a “benign dictatorship”, one party rule, like it or not, is infinitely more effective than democracy when it comes to fiscal policymaking.  And so their Premier is unapologetic in his explanation about their RE investment policy…while we sit around wondering how many butts have been pinched by the clueless-that-he’s-doomed Mr. Cain.  NOT effective.


The reality is this:  more than one quarter of affluent Chinese families wish to emigrate to the U.S. or Canada, primarily to insure the futures of their children.  I’ve spoken to a TON of these people in the past few weeks, and they all say the same thing: “Give us a fair deal and we’ll come to America”.  Frankly, after learning specifics about Canada’s progressive investment residency program from our new partners in China, our EB-5 is a Yugo to their Jaguar (or “Jag-YOU-are”, as the blokes would prefer us to pronounce it) but, thank goodness, America is still America…first choice.


Nature abhors a vacuum and the vacuum in real estate investment opportunities in China demands equilibrium from alternative sources. Our EB-5 opportunities, fair and reasonable ones which protect the investor by limiting risk, are the first option for these investors.  But, for the most part, American EB-5 projects are more about shiny marketing materials, colossal projections, and nebulous exit strategies into which no wise investor – Chinese, American, or Martian – would ever park a single dollar.



At this point in history, it appears to be China’s turn to open their wallets and invest in the world, and God knows that America and Europe’s futures depend significantly on that kind of financial firepower.  But if you are looking for Chinese investment dollars, know that a healthy pragmatism precedes even the most voracious interest in foreign investment...especially with the lame EB-5 projects they've seen and are still seeing. As long as Sharon and I can take them fair deals and look them square in the eye, we’ll be racking up miles over the Pacific.




Monday, November 14, 2011

Thoughtful Editorial on Proposed Bill to Give RE Investors Green Cards

First Objective Critique of "Homes for Visa" Legislation



Green Cards for Green Acres? Not So Fast, Folks

[Fraud Warning: in the preceding days, I have learned of at least one California real estate broker as well as of several unscrupulous Chinese brokers who are marketing the “buy real estate, get a green card” concept despite it NOT being law. Please be careful out there!. Sharon will soon be joining me on Immigration Insider with her Chinese language blog and she’ll be covering this issue but in the meantime, I ask our Chinese-American readers to convey this warning to folks back home: buying real estate will NOT get you a green card under current U.S. law!]


When the third breathless realtor friend called on the same day, I just had to laugh: here I was a day away from leaving for my long Asia trip and was again explaining the difference between the introduction of a bill to Congress and the process of how a bill becomes law. In a stalled real estate market, even intelligent U.S. brokers can be thrown out of whack by well-intended but most likely doomed legislation. And as Sharon and I would find out during the China portion of our trip, rumors spread quickly in this EB-5 world of ours.


I am speaking, of course, about S.1746, the recently introduced bill which proposes to solve the American real estate crisis by offering green cards to foreign investors who simply buy a home in the U.S. While the proposal has many merits and would certainly jump start the U.S. economy, there is one consideration which the press seems to have totally overlooked: the political price to pay for such legislation to actually become law, however noble and bipartisan its origin.


History Lesson


When the EB-5 became law via the Immigration Act of 1990 (IMMACT90), I got at least as giddy as my realtor friends did over this proposed bill just a few weeks ago. I believed it, too. “Finally”, I said, “America has created intelligent legislation to promote foreign direct investment”. I remember filing my first individual EB-5 – remember, it would be several years before the Regional Center and TEA concepts would be introduced – on a makeshift application form because the I-526 had not yet been invented. (Conjures up images of me in a Flintstone-esque fur suit chiseling away on a stone tablet, doesn’t it? Yabba dabba doo…). In fact, those of us in AILA who even knew what “investment-based immigration” could potentially mean back in 1991 were terrified that the initial numerical limits imposed by the EB-5 Pilot Program would vaporize in a nanosecond, a la H-1B not so very long ago, when programmers roamed America freely and the H-1A existed to admit still-desperately-needed geriatric nurses into the U.S.


That fear of visa exhaustion is what vaporized, not the visa numbers: INS (USCIS’ predecessor agency) promptly implemented EB-5 operating regulations with all the intellect, tact end efficacy of a karaoke evening with a drunken Roseanne Barr. The disclosure requirements were completely unworkable for any prospective EB-5 investor who had earned his or her money in any way other than inheritance. So, with one stroke, INS eliminated both Congressional intent AND the hope for a financial vehicle toward U.S. permanent residency; it would be a decade before things EB-5 would begin moving in earnest .


But there was more to the problem than the horrific rulemaking: the INS rules stood firm for a simple reason: there was no political pressure for INS to fix the rules. You see, many, MANY Americans took issue with the notion of “selling” green cards! I remember the CNN debates vividly: certain folks of various political persuasions had no problem allowing labor certification, National Interest Waivers, etc., but firmly resisted the notion that “America is for sale” (as I remember one pundit saying.) I was beside myself with frustration: for decades prudent, developed nations such as Canada, Australia, and much of Europe had direct investment-based permanent residency options. We were willing to allow people in and stay based on job skills (labor certification), “extraordinary ability”, etc. but somehow, the notion of attracting proven investors and their wealth to U.S. shores seemed, well, unpalatable. Something which might make Lady Liberty blush.  The sole battle cry which let the EB-5 visa become law in the first place is the same battle cry keeping it alive in “pilot” phases and the same battle cry which will, in the next two years, make it a permanent part of our immigrant visa arsenal: America needs jobs.


It’s the JOBS, Stupid


To be more specific, we’ve gone from:


    • IMMACT90: “Creating new EB-5-driven jobs will be good for America”


    • 2007: “Good grief, look at the economy, we need to create jobs FAST”


    • 2011: “Buy a House, get a Green Card”.


The rationale of the first two above is, IMHO, the only politically arguable basis which keeps the EB-5 alive and therein lies the problem: if you remove the job creation element from an investment-based green card, then you are out of political bullets. This proposed, admittedly-desperate bill to give permanent residency to folks who buy U.S. property won’t fly.


Consider the upcoming elections in Washington: just who exactly will make this new proposed bill law? The Democrats are clawing to stay on the side of an increasingly slippery iceberg; what do you supposed their core, labor-based constituency would say about lifetime permanent residency awarded to anyone with money? Even if the Dems did it, would the President put his Barack Obama on it and make it law? Both the extreme right and the xenophobic middle would have a field day on the “selling visa” angle and seal his reelection doom. As far as the Republicans: with the Tea Party movement, is there a single living Republican who will survive reelection if they support the “buy a house/get a green card” legislation? Don’t think so. It is sad to say but I believe that America has years of self-examination and painful lessons to learn before we collectively understand as a nation that it isn’t a “bad” thing to invite successful immigrants into our country to help us get out of the mess our careening spending spree of recent years got us into.


Let’s hope I’m wrong on this one.



Thursday, November 10, 2011

Chinese Capital: Changing the World

Given the typically "unglobal" American world perspective, many U.S. ventures seeking EB-5 capital approach guys like me with the mistaken presumption that “it’s all about America”, that is, that U.S. permanent residency is so coveted that even the most fiscally-flaccid EB-5 offering well nonetheless be well-received abroad. Let me clarify that error:  it’s all about opportunity.


While Canada and countless other nations are working with China to channel their giant cash reserves toward their borders, the U.S. -- both the USG via its slo-mo fulfillment of promised Premium Processing for EB-5 and, even more so, the private EB-5 purveyors flooding the Chinese market with questionable ventures -- squanders this staggering opportunity to recover economically.  The combination of a weak global economy resulting in reduced manufacturing demand from China and the Chinese governments continued ban on speculative real estate investment have combined to make wealthy Chinese families eager to export their capital;  their appetite for a better life for their children – which is, according Sharon, the quintessential dream of every Chinese parent – must be satisfied abroad.  Right now, a number of elements, of stars aligned, is ideal, and this opportunity will not last forever.


According to this week’s projections by Ernst & Young, Chinese investments overseas will grow between 20-30% in the next two years.  Already the single fastest growing source of foreign direct investment (FDI) in the U.S., (according to the U.S. Department of Commerce), the potential for EB-5 capital from China is staggering:  I can tell you that while the major urban markets are congested with EB-5 promotion, our most surprising success on this past tour   has been in secondary markets.  In fact, the majority of our agent partners in China are brand new to EB-5!  As skeptical and worried as I was until just a few years ago, the most ethical agents in China have stuck to other country programs for fear of misdirecting their clients into yet another EB-5 scam.  Consider the facts that the best agencies are only now delving into EB-5 and that but a small fraction of potential SEC-compliant accredited investors in China have even heard of EB-5…and you will conclude as I have: we are but the tip of the Chinese EB-5 iceberg.


But these remain treacherous waters and seeing the Missouri, Victorville, and El Monte EB-5 projects sink like the Titanic has made for a wary Chinese market.   Not a cautious one, a downright scared one.  Because most of us marketing EB-5 are not giving the Chinese what they want. So...what DO they want? 


Well, for one thing, they want real job numbers.  Barry Johnson, the Executive Director of the U.S. Commerce Department’s SelectUSA, recently stated that from 2003 to 2011, $7 billion in Chinese-funded green-field projects had generated some 44,000 jobs.  When you consider that this $7 billion, 8 year job-creation figure is lower than the job numbers being promised by some slickly-marketed EB-5 projects seeking several hundred million in China, it’s a bit sobering.  Do we really expect that a particular megaproject will hit the surreal job numbers they project?  It isn’t about IMPLAN vs. RIMS II; it’s about truth vs. lies, and, collectively, our credibility with the Chinese has never been lower. The fact that you got ten times as many jobs because you are telling your investors that you are going to build ten hotels at one time isn’t dishonest econometrics on the part of the economist; it’s faulty fundamental data.  Build your first hotel with the real numbers, then go to number two, but let’s spare them your world domination plans for your new franchise of whatever it may be.


The other thing they want are real projects; they aren’t interested in capitalizing your pipe dream and they are WAY too smart to believe the inflated property values upon which your valuations are premised.  Middle class SFH residential developments in markets with existing 3 year “For Sale” inventories?? Get real!  The wealthy Chinese got wealthy because they invest in core industries which are tangible: mining (like Lake Point EcoVentures, which I am proud to say was fully susbscribed during my three week tour with Sharon) and manufacturing.  Core businesses which consist of more than slick architectural drawings, jaw-dropping projections for unproven technologies, and six-digit Googleword/Baidu promotional budgets.


Sharon and I are working very hard to educate our partners in China about what makes a good EB-5 opportunity.  There are very few of them out there, unfortunately.  Congress wanted the EB-5 to be a fair exchange: invest in American jobs and get your U.S. residency.  For many in the U.S., that has translated into one-sided opportunism, not the quid pro quo contemplated via Congressional Intent. 


Until America provides China with a steady stream of what their capital appetite seeks, we will continue to lose ground to other nations with more progressive, attractive and responsive investor visa structures.


 


 



Wednesday, November 2, 2011

Shanghaied: It's a Wrap

Shanghai Pudong Skyline



Day 3 in Shanghai, off to Saigon tomorrow. Another set of incredible meetings with incredible people cherry-picked by Sharon Shi.  China is happening and the notion of a straight-shooting EB-5 program is a breath of fresh air to a hungry market.  My expectations have been blown out of the water on all counts. Expect LatourLaw's Shanghai office opening early next year.  I may not know a damn thing about Chinese law but my partner and her good friend Stella sure do...(-;


Feeling quite exotic these days, so we are heading to what sounds like the perfect place to wrap up business on the Bund:


Craft



Sunday, October 30, 2011

Enter the Draggin': Big Promises, Slow Execution Creates EB-5 Turmoil in China

As busy as some EB-5 megaprojects are in China, and as much money as much as they are collecting, seems the "shovel" in the "shovel-ready" is a bit behind the momentum: our second full week in China has led to a number of conversations with Chinese brokers with clients who funded EB-5 projects many months ago...and are still on "hold".  The reason: most EB-5 projects being marketed in the Far East are EB-5 dependent for execution.  Translation:



  1. A bank promises the GP that they'll fund 33% if the project gets local government and EB-5 funding for the balance.

  2. The county/city (or both) agree to cover a third of the deal if the balance is covered by a bank and/or EB-5 funding SO...

  3. The GP shows up in China with "confirmed" investments from the bank and from the government...but can't even START till the last investor is funded.


There are but a handful of EB-5 projects which are:



  • not dangerous "troubled" enterprises and

  • already active and operating


It is these rare projects which offer immediate I-526 filings, no delays, and the assurance that the investor's green card doesn't depend on the GP's ability to secure ANOTHER 50 investors before the project can even get rolling.  The logical result of all this is pretty predicatable: Chinese agencies tired of making excuses for stalled EB-5 launches contacting Sharon and me to "switch" escrow to bona fide, working EB-5 ventures with no strings attached.


Fortunately for them, we happened to have precisely what they need. :-D


 


 



Xiamen Food for Thought...

This Xiamen delicacy almost proved too much for HRM Sharon, who politely declined when the dish was unveiled at dinner last night by our gracious host.  I've never seen Sharon even WINCE with all the zany Chinese stuff we've been honored with, so I took great delight thinking for a moment I could best her.  But when I ate one, she was checkmated and ate the whole thing...(-:


Local Sea Worm in Cold Jellyfish Puree


There is nothing...NOTHING...we will not do to spread the good news of Lake Point EcoVentures EB-5....



Tuesday, October 25, 2011

Crouching Tiger, Hidden Clauses: The Devil's in the Details

CHENGDU-  A passing observation: as my friendship continues to develop with the amazing group of folks with whom Sharon has been working here in China, the comfort level settles in mutually.  One of the sidebars to our efforts to present Lake Point EcoVentures Phase I to prospective EB-5 investors seeking a secure route to U.S. Permanent Residency is the agents' increasing interest in understanding the nuances of OTHER EB-5 projects which have been aggressively marketed to them and their clients.


It remains true that if you have nothing good to say about someone/something, best to say nothing at all; at the same time, when a specific legal question is asked, one is ethically bound to answer it truthfully.  In reviewing but a handful of the latest EB-5 offerings stuck in front of me by imploring Chinese EB-5 agents trying to decipher PPM minutiae, I have found:



  • OFAC registration instructions specifically required for Chinese investors (OFAC does NOT apply to Chinese nationals)

  • Limited Partnership agreements bearing the name of other unrelated projects, which were apparently missed in the document editing

  • Regional Centers claiming that they were approved when they are NOT USCIS approved but pending

  • Gross exagerrations on the valuation of property used as "security" for EB-5 investors, e.g., land currently listed at $2M cited as having a $15M valuation in 6 years

  • My favorite: a developer taking a letter from a city official who is "supporting the effort" for their megaproject and extrapolating that language into the "pledging" of public properties...properties which cannot be legally conveyed or obligated!


Nice, huh?  ABSOLUTELY SHAMELESS stuff.  Sharon and I now have a firm policy with the agents with whom we are working: ask, and ye shall receive the TRUTH.  The upside of having U.S. EB-5 attorneys on your team, I suppose.





Monday, October 24, 2011

China EB-5 Agencies Speak with One Voice: "Protect Our Clients!"

NANJING-  Day Seven of our EB-5 marketing trip to China and Vietnam has us dividing and conquering:  Sharon is closing deals in Guangzhou while I flew ahead to Chengdu, capital of the Sichuan Province and inventors of paper money, to train our collaborating team for Thursday's big Lake Point EB-5 seminar.  Seems they are still quite busy making money in China, paper and otherwise:  we've enrolled 9 of our 20 EB-5 investor slots for Lake Point EcoVentures during our first week here!


There is one reason for this mind-bending success, and her name is Sharon Shi, plain and simple.  The past week has had us visiting the creme de la creme of Chinese agents, those princes revealed through Sharon's seven months of frog-kissing in 2010. Our princely welcome and open doors are the result of much effort on her part last year, and as I sit writing this in City #4, I am humbled when I reflect on the 40+ cities she traversed in search of the best possible network of EB-5 immigration agents.


Like me, Sharon is a believer in "people" versus "paper", and the agencies with which we are collaborating range in EB-5 experience from novice to seasoned veterans.  Some are venturing into EB-5 for the first time; others are asking me to dissect and opine on competing projects they are considering,  delving into technical minutiae which far exceeds the understanding of many immigration attorneys who are suddenly "EB-5 attorneys" (cheap but warranted shot (-;).  What these agencies all have in common is a deep concern over the misleading marketing utilized by many EB-5 projects,  the questionable job creation rationales, and the breathtaking ambition of megaprojects which really can't even break ground until the 40th EB-5 investor has had his or her I-526 approved.  These good folks have come to understand that it is indeed possible make a nice EB-5 living while still protecting the interests of your clients.


Small wonder that we are being grilled with very savvy questions and I find myself reaching out to Scott Barnhart to explain some rather esoteric econometric concepts.  Sharon has brought us to a very special group of folks who, after the contracts are signed, after the last Peking Duck pancake has been consumed, want to sleep at night knowing that they've selected the very best EB-5 project they could to both assure permanent residency for the client...and avoid squandering $500,000 on a dead-end deal.


Remember this, folks: the days of "Well, I'm never going to get a penny back on my investment but at least I'll get the I-829 approved" are HISTORY as of 2010.  There are but a handful of select projects -- all loan based, with fixed exit strategies, and all carefully structured to protect the interests of the investors entrusting them with their money -- who can get you to America in one piece.



Wednesday, October 19, 2011

Beijing Rocks! Lake Point EcoVentures EB-5 Receives Red Carpet Welcome

Day Two wrapping up in Beijing and I am seriously impressed.  Sharon's pre-existing agency relationships are making this a comparative walk in the park compared to the last time I ambled through this neck of the woods.  The best immigration agencies, the smartest questions, the sharpest people...Lake Point EcoVentures Phase I's 20 EB-5 investor slots are the talk of the town.


It's nice to be wanted. (-:  Beijing is an attractive, cosmopolitan city with incredible restaurants, malls...serious consumer firepower.  My first impressions couldn't be better. And, not to be disappointed, the Peking Duck DOES taste better in Peking.  The other offerings at that particular restaurant...well....


Peking Menu



Friday, October 14, 2011

Thursday, October 13, 2011

T Minus 3 Days: On Trust and EB-5 Marketing in China

Just finished a chat with my still-jet-lagged partner Sharon Shi, who is somewhere West of Shanghai with a serious case of insomnia and EB-5-itis.  Sharon left Monday, arrived Tuesday, and will be meeting me in Beijing next week to begin what is turning into a rather grueling seminar schedule.  When you're gearing up for a 3 week, nonstop road show in China and Vietnam, melatonin doesn't cut it.  And, as you can imagine, getting ready for this kind of road trip is no minor event and I have been scrambling to get things in order before I leave this weekend.  In reality, between Skype, email, and cell phones, the biggest challenge is the time difference.  Hard to be perky for a conference call when it's 9 am for the immigration broker and 9 pm here.


We are off to a tremendous start with investor placements as a result of Sharon's trusted relationships with some mid-size and smaller brokers...and time's have certainly changed.  A year and half ago, if I wanted to propose a project to a registered Chinese immigration agent, it was very difficult even if you got on the plane; in the past six months, Sharon and I have been visited at our Chicago and Miami offices by a half dozen agencies ranging in size from medium to very large. If you had told me last year that THEY would be flying to speak with ME at MY office, I would've laughed.


But it isn't wanderlust that's sending them our way.  The better Chinese agencies have long been aware that all that glitters isn't gold.  Considering the recent catastrophe involving  Missouri's Mamtek Regional Center, it's easy to see why smart China agents are doing their homework as far their U.S. partners.  As 15 very unlucky Chinese investors are just learning now, their $7.5 million investment in Mamtek -- along with the state of Missouri's $17.6 million in direct assistance and $39 Million in industrial bonds issued by the City of Moberly -- have evaporated.  Gone. The $65 Million deal which was proposed to create over 600 jobs has fired its four employees, left the job site, shut down its website...and now refuses to meet with lenders or return phone calls.


This recent mess led to yet another spirited debate this morning with my friend Michael Gibson, EB-5 Due Diligence maven and publisher of the best EB-5 Resource on the Web.  We emailed back and forth about the question of "due diligence" and how to protect investors from this  kind of mess. He asked me how I evaluate prospective EB-5 investments and my reply was simple:  I don't.   The handful of EB-5 centers and projects I am willing to put my name on are selected as good GREEN CARD vehicles, not "investments".  I select private offerings into which (hopefully) you can park your money, get a dinky rate of return, be confident that you'll get your permanent residency (remember: conditional residency and I-526 approval is based on projections; I-829 approval depends on results), have a clear exit strategy with a timeline...and, through intelligent risk control, have a pretty good chance of getting your capital back at the end of the game.


As I asked him to make my point: is ANY EB-5 project really a "good investment"?  Who on earth would buy into an EB-5 Limited Partnership to maximize their return on investment (ROI)?  Find me one American (or anyone else who doesn't want U.S. permanent residency) who is willing to accept a 2% ROI on a capital venture project with no recourse!   So that's the deal: I am not an investment advisor  -and, believe me, I have the portfolio history to document that thoroughly (-;.  What I AM is a grizzled old investment-based immigration veteran with a militant sense of fair dealing.   I select the projects Sharon and I market in the Far East, Latin America, and the Middle East by looking at the people behind the deal, the structure, the REAL job creation potential, and the exit strategy.  Interest rates and investment returns are of absolutely no interest to me...OR to the vast majority of EB-5 investors entrusting EB-5 projects with their capital! Ask 'em!  So if you are looking for a good EB-5 project through which you can get permanent U.S. residency with as controlled a risk as possible, I'm your man.  If, on the other hand, you are looking for a good "investment"...talk to my good friends at JP Morgan, because what I've got for you is definitely not the best place to park your hard-earned money.


Due diligence is indeed critical, but once a project passes muster, DD doesn't do a thing stop dishonest people.   I know of several megaproject Regional Centers getting I-526s approved whose mind-boggling job numbers will never fly at the I-829 level, yet sales remain brisk; on my desk I have three I-829 denials from yet another huge Regional Center whose website to this DAY boasts of a "100%" record of approval.  While Missouri's Mamtek exploded, there are others which will quietly implode via exaggerated job projections, unreported material changes, and all kinds of other stuff.  Like Mamtek, each of these invariably will have scores of politital big wigs, senators, governors, etc., all of whom gushed about the wonderful project before it went kaput, and just as the unfortunate citizens of Missouri and their suddenly-downgraded bond rating will be cleaning up their mess for years to come, so will the citizens of other cities and states where EB-5 projects fail. 


I learned a long time ago that a person's handshake matters infinitely more than what the pile of contracts may say. I've come to understand these past few years that the people behind any EB-5 venture matter far more than how the prospectus reads.  Here's how the process works for us:



  • I get approached on a deal and meet the people looking for capital.  If there is anything more to the deal than the quid pro quo of "low interest EB-5 loan in exchange for a ferocious commitment to the needed job creation and capital return within a reasonable period of time", I'm outta there.  Not interested.  (I've yet to see a single equity-based EB-5 project return capital to their investors so I won't build one that way and with ONE exception to date, I won't market them either.)  After reviewing 20-30 projects in a month, I'll usually find one deal I like for whatever reasons, but it hinges on one element: I've come to trust the people behind the deal.

  • Once that happens, I need to sell Sharon on it.  Sharon's no pushover, because she has to answer to her Asian agents.  Most times I can persuade her, thought, because she trusts my judgment and experience, and knows that while I am capable of making mistakes,  I am incapable of ever endorsing an EB-5 project I myself would not invest in if I was the EB-5 investor.

  • Next, with Sharon on board, it's time to talk to the Chinese immigration agents...agents who have placed dozens of investors through Sharon as a result of her relentless seminar tours through China.   Agents who TRUST Sharon.

  • So begins their barrage of DD questions (nothing beats explaining "rights of redemption" on Skype at 11 pm on a Tuesday, believe you me.)  But because Sharon has developed a group of TRUSTED Chinese agents, we do the long, tedious back and forth until THEY are satisfied.  Most often they are, sometimes they politely say "no thanks" to a project I like; they know what they can place, we don't always.

  • Finally, the China agents who come on board reach out through their organization with information on the EB-5 project, answer questions, and use the TRUST their reputations have earned them to have prospective investors give the deal a listen...and possibly invest.


So there you have it, I've done it again, giving away all my trade secrets. (-:  Seriously, though, can't you see how it works?  TRUST!  Latin America, Europe, Middle East, Far East...wherever...it's all about trust.   There are over 180 approved Regional Centers and hundreds of EB-5 projects under them in the U.S. and there are but handful whose structure and histories have earned my trust.  End of story.




 





Wednesday, October 5, 2011

Announcing Our China/Vietnam Seminar Tour: Oct. 16 - Nov. 9, 2011

On October 16th, the distinguished Chinese-American attorney Sharon Shi and I will begin a three week EB-5 marketing tour in China and Vietnam.  Sharon, my shiny new partner, spent most of 2010 closing EB-5 deals in China; she decided, despite her astonishing success last year going it alone, that taking a cranky old know-it-all this time around might improve sales, and the feedback from our agents in China so far seems to corroborate her theory.  (You'll be hearing more about Sharon as soon as we get our various sites updated.)

Our lead mission is to fill a $10M/20 investor tranche for Lake Point EcoVentures EB-5.1  Lake Point EcoVentures is a remarkable private-public venture where the GP is mining valuable aggregate rock (from which highway construction materials are made) while converting a rare 2200+ acre piece of the Everglades into an environmental recovery zone...and donating the land to the public!  While Scott Barnhart's economic projections and the USCIS agree that the job numbers support 54 EB-5 investors, we're capping it at 20 EB-5 slots, leaving 2.7 jobs for every job needed for our 20 lucky Limited Partners.  EB-5 funding constitutes only 10% of the venture; the project offers a 5 year loan structure paying 1.5% per annum (woo-hoo!) with liquidity of principal at the fifth year anniversary of original I-526 approval...but how often does an EB-5 investor get to partner with a Forbes group of GPs? 

Lake Point is without a doubt the most solid, safest EB-5 investment opportunity I've ever seen...and I constructed the whole deal from the ground up to insure the investors WILL get their I-829s approved.  (For our attorney and migration agency readers with clients seeking an EB-5 opportunity:  talk to me NOW if you want to know more.  We expect to fill all 20 slots before returning in November!)2

Sharon and I are scheduled for 20+ events in Beijing, Shanghai, Guangzhou, Nanjing and then on to Ho Chi Minh City in Vietnam...we have approximately 8 jillion individual client meetings and will be working on Saturday and Sundays.  I have promised to keep my whining to a minimum and Sharon has assured me that I will not be put in any compromising situation to eat anything I don't want to eat, especially the Dreaded Century Egg.

Stay tuned: I'm taking the camcorder so this could get interesting....(-;

1 The site link above tells the story but is being updated: the Regional Center was originally created to fund Lake Point ONLY.  Since then, the RC has been renamed American Venture Solutions (AVS) Regional Center and the Lake Point project is AVS' first project to market.  The new AVS site will reflect these changes in the very near future. BOTH THE REGIONAL CENTER AND THE PROJECT ARE USCIS APPROVED!


2 THIS IS NOT AN OFFERING FOR THE SALE OF A SECURITY!  Prospective Investors may contact us so that we can provide the necessary documentation establishing that the prospect is an "accredited investor" within the meaning of the U.S. Securities and Exchange Act.  Upon satisfactory confirmation of such status, detailed offering materials may be provided to any accredited foreign investor interested in the opportunity.



Saturday, October 1, 2011

Orlando: EB-5 Financing of Real Estate

Well,  Brian Su's first "real-estate-focused" EB-5 event yesterday ROCKED...as expected.  The room was packed with the usual suspects -- and a lot of new folks -- and the topical theme was definitely more advanced than Brian's prior events.


Opening speaker Robert Divine - a top-tier EB-5 attorney -- delivered a clear and consice explanation of how construction jobs interplay within job count dynamics in Regional Centers.   Ronnie Fieldstone -- whose excellent article on securities compliance issues for EB-5 I published in Wednesday's Immigration Insider -- did a masterful job in clarifying SEC-related issues.  (I was delighted to see his new partner -- my OLD partner in the 90's -- Randy Sidlosca in attendance!).


Candidly, when you are part of these events on a regular basis, you tend to measure the usefulness of the seminar by the amount of notes you find yourself taking.  Using that yardstick, yesterday's seminar was the most productive EB-5 event I've attended.  Lots of notes, lots of new perspectives.  The speakers were great, the questions were smart, and the event reflected Brian's evolving awareness of the need for more sophisticated EB-5 events.   My old friend Ed Beshara - we were friends 20 years ago, when this whole EB-5 thing was new and very scary -- is now among the country's most experienced EB-5 attorneys and shared his insight with an appreciative crowd.  My partner in crime, economist Scott Barnhart, brought the house down Friday afternoon with his "economics-professor-meets-Jon-Stewart" shtick, keeping things fun.  As usual, I was the target of much of his abuse but as always, a steady stream of minor epiphanies about the intricacies of job count calculation were revealed.   Absolutely priceless education you CANNOT get anywhere else.  Thanks as always, Dr. B.


Brian, I emailed you yesterday and I'll tell you now publicly: you deserve a MEDAL for your efforts in creating what you've done with these events.  All of us in this sector appreciate your hard work and tireless efforts to keep this vital part of U.S. immigration policy at the forefront of the national immigration agenda.  Safe travels, my friend.





Wednesday, September 28, 2011

Brian Su's Orlando EB-5 Event is FRIDAY!

Guys, quick reminder: if you haven't booked your seats for Orlando Friday, get busy.  Friday's event is going to be the first the "Big Boys" (and "Big Girls", of course!) EB-5 seminar ever, and it will hold a wealth of information for those of you who are beyond the "beginner phase" of EB-5 financing and logistics.


While there is the usual impressive panel of speakers, the participation of Miami's Ronnie Fieldstone of Arnstein & Lehr LLP is what will make this particular event invaluable for those of us who are NOT securities experts and who must wrestle with tangential securities issues as we service our EB-5 clients.  Ronnie is no run-of-the-mill securities guy: he's been THE securities attorney for dozens of EB-5 Regional Centers and his experience in our sector is unparalleled.  Moreover, like me, Ronnie is a "business guy" who has been involved with entrepreneurial ventures his entire life.  This experience -- as opposed to academic experience -- makes all the difference in the world when you are putting together a formidable EB-5 project or Regional Center.  (In fact, I asked Ronnie to give me some feedback on EB-5 security issues, and he did one better: he's provided me with an article he's written which I know my readers will find invaluable. Here it is for your education:  Download Ronnie Fieldstone article for II


ONLY SIX TICKETS are left so get busy: Brian Su's Orlando Event Registr


Friday, September 9, 2011

Looking for a Few Good Florida EB-5 Projects...

I will soon be making a major announcement regarding the expansion of a Florida EB-5 Regional Center in which I am now a principal.   The RC, governed and administered by some of the most respected entrepreneurs and business leaders in the country,  will be going Florida-wide.  I have been given carte blanche to modify the RC, and will be doing so in keeping with the same spirit of fair-dealing with which I have governed my law firm for the past two decades.  Specifically, we are looking for projects which meet the following criteria:



  • Project principals whose professional and financial backgrounds will withstand detailed due diligence scrutiny;

  • Job-creation-driven projects in credible industry sectors located in TEAs or rural areas;

  • Principals comfortable with our RC-wide structure, which is a 60 month interest-only model with principal repayment at maturation of loan...no equity EB-5 funding;

  • "Troubled Enterprise" projects, but only those whose historical financials show profitable activity before being interrupted by the current economic crisis;

  • Projects which do not seek to "cash out" principal investors via EB-5 funds;

  • Projects in which principals have significant equity and domain expertise;

  • Projects able to front the administrative hard costs for inclusion under the Regional Center umbrella (i.e., I-946 amendment,  preparation of EB-5-compliant business plan, offering documents, econometrics, I-526 exemplar, marketing materials, web content and SEO), which typically run from $25-30K.


The principals will have to agree to a number of concrete operational guidelines intended to protect the EB-5 funds invested; these will be project-specific but will include things such as real-time job creation modeling (to distinguish reality from projections BEFORE additional investors are brought in), back-end structural protections designed to control EB-5 investor risk (e.g., seniority at liquidation, revenue set-asides for repayment, etc.), and a clear understanding that the availability of low-cost Foreign Venture Capital (FVC) is wholly dependant upon the viability of the job creation requirements which will secure permanent residency for ALL EB-5 investors at the I-829 level.  The bottom line: your project will be subject to ongoing scrutiny and supervision by the Regional Center in order to insure that our investors' interests are protected.


Since the handshake happened a few weeks ago,  we've seen a signficant increase in the number of prospective projects making their way to my email...via word of mouth, I suppose.  Now that we are "going public" with the news, inquiries will increase.  As they do, I am forced to spend an increasingly greater percentage of my time examining and discussing potential projects...uncompensated time.  I've always been of the opinion that it isn't right to charge a person to get them to the point where they can make an intelligent decision about whether or not they need your services, and I feel the same way about EB-5..."free initial consultation", tragically, has been my hallmark for decades. (-: In order to keep it this way, I ask any prospective projects who want to know more about what we are doing to please:



  1. NOT call but, rather, contact me via my email, jlatour@latourlaw.com, with a brief summary of the project, total capitalization, and EB-5 capital needs.  I promise I'll respond ASAP -- a few days or less unless I am abroad -- and tell you whether or not the project is of interest.

  2. Send me whatever documents you can but please do NOT ask me to sign an NDA...whether or not the project is of interest to the RC, you are communicating them via me, an attorney, so all that you relay to me is protected and confidential. (Besides, I can't even remember what I had for lunch yesterday...)


If we like the project, next comes the DD on the principals and the project's history, followed by agreement on terms and project deployment/exemplar prep and submission.  (Despite all  you've read online about having to have a new project "pre-approved" before an existing EB-5 Regional Center can market it, that's baloney .  When the project plan is prepared, the project can be marketed subject to USCIS conditions to which we will faithfully adhere.)


So...TALK TO ME!  Next up, a story about a Chinese dynamo and our upcoming three week seminar tour of China...have a great weekend and 去鳄鱼 (Go Gators!)  J



Wednesday, September 7, 2011

Brian Su's Orlando EB-5 Real Estate Finance Forum on Sept. 30

For those of you involved in anything EB-5, you know Brian Su as the man behind the most productive networking summits in our industry.  On September 30, Brian turns his attention to what may be the potentially greatest match-up in EB-5 history:  Chinese EB-5 venture capital for U.S. commercial development.


It is no secret that Chinese investors are bullish on real estate.  According to the Asia-Pacific Wealth Report 2008 by Merrill Lynch and Capgemini, in 2007, a year that saw investors diversify into other assets against the backdrop of a booming stock market, high net-worth individuals in China allocated 21% of their assets to real estate, against a global average of 14%.  Fast forward to 2011 and the dual elements of a massive U.S. real estate inventory and nonexistant conventional financing...and you can see where this is going.  In his press release on the Orlando event, Brian quotes the GroupM Knowledge - Hurun Wealth Report 2011....check out these stats:



  • China today has 960,000 ‘millionaires’ with personal wealth of 10 million Yuan or more (USD$1.5 million), up 85,000 individuals or 9.7% from the prior year.

  • In 2009, there were 825,000 millionaires, growing last year to 875,000.

  • China also has 60,000 ‘super rich’ with 100 million Yuan or more, up 9.0% from last year.


But to me the single most telling statistic is this one: four out of five Chinese millionaires are thinking of sending their children to study overseas...with the US and UK their preferred destinations.


While still EB-5 focused, this event marks a new emphasis on the real estate sector by Brian.  As always, it will be a full day event and feature an impressive panel of experts.  The opportunity to network, however, is the single most compelling point (especially to those of us who have heard every possible variation of the EB-5 "Book of Revelations" a dozen times (-;)


My good friends Scott Barnhart (the distinguished economist with whom I work on Regional Center projects) and John Jiang (from Henry Global, one of China's largest and most reputable EB-5 agencies) will be speaking, as will my old friend Ed Beshara, whom I haven't seen in a zillion years.  Seats are limited and if this one goes the way of the last few, it will be a sell-out, so get your seats now: Register for Brian's 9/30 EB-5 Orlando Forum and see you in Mickey Town!



Wednesday, August 31, 2011

New Shark in the House...

Okay, in the past week days I've had two existing EB-5 RC clients come to me after hearing flat out lies from securities attorneys attempting to make a fast buck...and today I had a THIRD (prospective) client ask me the same question.


It would appear the latest incarnation of the Man in the Gray Suit (i.e., shark) on the EB-5 scene is The Securities Lawyer, Part II.  Now some are pushing a “Reg D filing” fear...when, by DEFINITION, an offering made under the Reg D exemption to 17 CFR § 230.501 is an “EXEMPTION TO REGISTRATION”.  Don't believe me?  Here's what the SEC has to say: http://www.sec.gov/answers/regd.htm


The only thing an EB-5 funded project has to file is the horrific Form D...but only AFTER investments start coming in.  Form D, a pain in the neck 15-pager humorously referred to by the SEC in the above link as a "brief notice" is a admittedly a bear and something for which you SHOULD have a securities attorney -- here is the link --  http://www.sec.gov/about/forms/formd.pdf 


About a year ago, there emerged the barrage of know-nothing deportation lawyers buying "EB-5 expert" Googlewords, next came The Securities Lawyer, Part I (AKA the "I'll be happy to review the PPM USCIS has approved repeatedly for Jose for only $35,000" scumbags)...now this.  SHAME on you guys.  A qualified Securities Attorney is and should be part of any Regional Center structuring process, and their role is critical.  But fear-mongering through the clever manipulation of cryptic SEC terminology in order to trick people into thinking they need your services is not only unethical and a breach of bar rules...it is fraud.  Enticing someone into paying you to do something they don't need is FRAUD.


Newsflash to the short-sighted: big, fat, bald-faced lies do not build a law practice.



Hollywood: Swingin'! New Cali EB-5 Regional Center APPROVED



Just received the attorney's copy of the USCIS letter of approval for Hollywood International Regional Center, LLC, and high-fives are flying!  Richard Heyman's brainchild, HIRC, like most of the best EB-5 Regional Centers, stems from the dual sources of relentless entrepreneurship and deep affection for a particular geographic region.  In Richard's case, that "geographic region" begins in the legendary streets of Hollywood, California, practically right around the corner from the new LatourLaw West Coast office (of which I'll be telling you soon.) Covering the five counties of Los Angeles, Orange, Riverside, San Bernardino and Ventura, HIRC will focus on the hospitality industry, particularly hotels and restaurants situated with the economically-challenged-yet-still-beloved sectors of this glitzy slice of America. 


When Richard first approached me on this, his enthusiasm and commitment to the region was one of the first things which struck me.  let me tell you: this guy CARES about Southern California's ailing economy.  Acutely attuned to the vast economic opportunities existing within this way-undervalued commercial sector and passionate about seeing the return of the region's Glory Days, Richard's reaction to the approval is the kind I like to see: brief celebration followed by an intense shift to "time to get busy".  I, for one, am STOKED about this new RC and look forward to working with HIRC as they ramp up their operations.


Props must go out:  Jo Ann Clarke's mastery in crafting business and marketing plans was instrumental in the securing the USCIS EB-5 RC approval, as was Scott Barnhart's number-crunching and "beyond-the-call-of-duty" involvement in refining industry and geographic plans.  But if anyone deserves a big hand here, it's the USCIS adjudicator who went WAAAAY beyond the call of duty in emailing specific questions to me, asking the right questions, requesting clarifications, and, in the process, shaving weeks off the approval time. He or she adjudicates the way I tried to adjudicate when I was a consular officer, and I continue to be delighted with the level of service we are getting out of Laguna Niguel.


On another quick note: unless my math is wrong, tomorrow is the deadline USCIS promised in its announcement on August 2 that "within 30 days" some form of “premium processing" would be in effect for Regional Centers. We sure would love to unveil that nice surprise tommorow! But if that doesn't happen, I hope Washington gets that in order sooner rather than later.  Just as Richard Heyman has been given the USCIS green light to begin seeking EB-5 capital for much needed jobs in Southern California, there are many others like him throughout the nation, eager to put foreign venture capital to work for America.


Congrats, Richard, and save me spot on the Red Carpet...(-;