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. 


 


 


 


 



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