EB-5 Myth vs Fact
Get the Story Straight About
the EB-5 Program
by Laura Foote Reiff and EB5 Investors Magazine Staff
Myth 1: That the EB-5 program lets foreigners just “buy a
Green Card”
Some claim that the EB-5 program was established to let
high-net-worth individuals buy their way into the United States.
Fact: Nobody just walks into the United States with an
EB-5 visa. The program is highly regulated and takes years to
complete. Applicants must prove the source of their funds, that
they actually invested the capital, and ultimately job creation.
Investors are screened by multiple agencies and are only initially
granted conditional green cards. After two years, further review
is required to verify that the investment remained at-risk and
that the required jobs were created.
Myth 2: That EB-5 investors “jump to the front of the line”
ABC’s Nightline claimed that EB-5 applicants “leap ahead of
legitimate applicants who lack the means.”1
Fact: All employment-based visas have a set number that
are allotted to each category. EB-5 applicants must wait for
their visa number like any other employment-based category
applicant.
Myth 3: That the program is a loophole for criminals and
terrorists
Critics say the EB-5 program is an easy way to bypass standard
background clearances, which leaves the program vulnerable to
terrorists and criminals.
Fact: As described above, EB-5 investors are screened twice
– once for a conditional green card, and again to obtain their
permanent green card. In addition to being subject to the same
security checks as any other immigrant to the United States,
EB-5 investors must have the project in which they are investing reviewed for compliance with regulatory requirements.
EB-5 applicants also undergo a strenuous vetting process to
demonstrate that their source of funds is lawful and that those
funds can legally be invested into qualified projects.
Myth 4: That only simple background checks are conducted
Some argue that background screening for EB-5 applicants
is inadequate.
Fact: Employment-based immigrant applicants of every category undergo detailed and in-depth background checks conducted by U.S. Department of Homeland Security, U.S. Citizenship
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and Immigration Services, and the U.S. Department of State.
DHS and DOS cross-reference applicants with international
databases for additional clearance. EB-5 applicants go through
this process twice. The DHS also conducts deep inquiries into
the source of investors’ funds to verify their legality.
The U.S. Department of Treasury’s Office of Foreign Assets
Control cross-references applicants with their “specially designated (SDN) list.” Applicants may be barred from investment if
they or the entity from which they sourced their funds appear
on this list. The Administrative Appeals Office (AAO) has also
upheld Form I-526 denials for forms submitted to USCIS
without the required OFAC license. On a private level, financial
institutions also perform compliance checks on received wires
of funds through applicable “Know Your Customer” rules and
reject suspicious transactions.
The types of background checks EB-5 investors are subject to
on a personal level include their name, fingerprints, and diverse
security clearances to detect possible crimes, fraud schemes, and
the improper use of “sensitive technology,” among other illegal
activities.
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