Published: 9/14/2016 11:50:32 PM
Modified: 9/14/2016 11:50:37 PM
Investors in the EB-5 program whose immigration status is in limbo due to allegations of fraud may get some relief.
Proposed changes to a federal foreign investor program working their way through Congress do not go as far as Michael Goldberg, the man appointed by a federal court to protect the interests of investors in the Jay Peak projects, had initially been seeking.
Goldberg had originally hoped for a provision that would have held harmless defrauded investors. Instead, a proposed amendment would give defrauded investors some flexibility in meeting federal requirements.
That change might be all that can be accomplished before the end of the month, when the EB-5 foreign investor program expires. Republicans in the House of Representatives are under pressure by developers to extend the law as is. Sens. Patrick Leahy, D-Vt., and Chuck Grassley, R-Iowa, are pressing for financial reporting requirements that would better protect investors. The two senators say fraud is “rampant” in the program and measures must be taken to hold developers accountable.
The biggest alleged fraud case in the history of the EB-5 program was exposed in Leahy’s home state of Vermont last April.
State and federal lawsuits filed earlier accuse Miami businessman Ariel Quiros and Bill Stenger, one-time CEO and president of Jay Peak, of misusing $200 million in EB-5 funds as part of six development projects at the resort and one in nearby downtown Newport.
Foreign investors in the EB-5 program put $500,000 into a qualified project, plus a $50,000 administrative fee. In exchange, the investor is eligible for permanent U.S. citizenship if the investment creates 10 jobs.
Hundreds of investors in the projects headed by Stenger and Quiros are in jeopardy of losing their money and possible U.S. citizenship, including those who put up funds for a proposed $110 million biomedical center in Newport, Vt.
Federal regulators have called that project “nearly a complete fraud.”
The immigration status of foreign investors in that project, known as AnC Bio Vermont, remains in limbo because the facility was not built and the jobs created through construction, stem cell research and biomedical device manufacturing never materialized.
Investors in the Stateside condo project at Jay Peak face the same job creation problem. In that case, however, the condos were partially constructed and with an injection of roughly $25 million could be finished.
Goldberg, appointed by a federal court judge as the receiver to oversee the properties, had been lobbying to hold harmless about 400 investors in Stateside and AnC Bio who were the victimized by the alleged fraud. In all, 700 immigrants from 74 countries invested in the Jay Peak and AnC Bio projects.