EB5 Investors Magazine Volume 7, Issue 1 - Page 84

EB5 INVESTORS M AGAZINE 82 O t he r l i a ble p a r t ie s c o u ld b e d e v e lop e r s t h at received funds for ult imate job-creat ing ent it y pur poses. G enera l cont ractors re ceived no-bid contracts. Expect, at a minimum, a subpoena into re cords a nd p ossible i nc lusion or i nter pleader by e x ist i ng defenda nts. At tor neys who dra f ted documents or received payments without disclosing t he potential conflicts of interest are also commonly named in these actions. Immigration agents who may have a U.S. presence are targets for being named in the suit. Clearly if the agents are tak ing funds, there is cause to accrue additional liability for lack of transparency. Bank or escrow agents who physically processed i nvest ment funds a l l have var y i ng levels of i nte r a c t ion . The f a c tor s to c on s ide r w ou ld b e based on the types of accounts, escrow accounts or providing documents of perceived escrow account features. Depending on the size of the bank and insurance, they may be quick to settle privately. Escrow agents who may be within the bank or third parties that work closely with banking institutions. They receive sometimes significant funds as a fee but may not have performed to the agreement. Finally, any related business ow ners, vendors or anyone who benefited from the EB-5 funds may be liable for recourse to the investor if they can prove that the services weren’t rendered or prices were inflated. WHY ARE SUITS BEING FILED? A lawsuit is a powerful, expensive tool to force action. If there is a significant delay in the project, a lawsuit may be effective at motivating the developer to finish on time and create the requisite number of jobs. Therefore, clients can be asked if the project is behind schedule, what is causing the delay, and if those delays were disclosed in the investment documents. They can also ask about third party or market conditions. Delays in the project may not always mean a delay in job creation. If the project is in progress or funds were substantially spent, then a strategy to raise this issue can be effective. However, if the delay produces changes