Wealthy foreign citizens seeking residency in the United States are paying big bucks to leapfrog wait times. It’s completely legal and supporters claim it is boosting the economy.
The US government’s EB-5 visa program allows foreign citizens faster access to green cards if they invest $500,000 to $1,000,000 in a development project that creates at least ten US jobs. The project must be in an area considered in need of an economic boost.
Chinese nationals, for example, are investing millions of dollars in some of Chicago’s newest high-rise projects.
Developer Steve Fifield raised $7.5 million through EB-5 investments for a 310 unit, 28-story apartment building being constructed along the edge of Chicago’s River North neighborhood. Fifield said fifteen visas were sold to Chinese investors of the project.
“We met the criteria that EB-5 sets: the money should go in to sort of recovering or redeveloping areas,” Fifield said.
Fifield calls it a “double-whammy” project that creates jobs and affordable housing.
One-hundred construction workers are building the high-rise. Fifield said the project is also creating indirect jobs and spawning nearby developments. Additionally, Fifield said the property will generate more than one million dollars in tax revenue annually for the city after it opens later this year.
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“This neighborhood is really coming together very quickly,” Fifield said.
A spokesperson for the mayor’s office said the city does not receive reports or data on projects that may be seeking to use EB-5 as a funding source.
The US Citizenship and Immigration Services says it can allocate 10,000 visas a year for EB-5 investors.
Government-approved regional centers may recruit the foreign investors. For example, Go USA EB-5 Regional Center, LLC told NBC 5 Investigates it raised $20 million from forty investors for a downtown Chicago hotel project that is creating 665 jobs.
However, immigration officials could not provide a list of existing or current developments in Greater Chicago being partially funded through EB-5 investors. Also, a 2013 Department of Homeland Security audit found there was no indication EB-5 improved the nation’s economy.
“We could use better oversight and I think we could use better assessment tool to figure out as a society, whether in a long run, these are beneficial for the United States,” said Harold Krent of Chicago-Kent College of Law.
Chinese nationals raised $158 million for a convention center project near O’Hare International Airport that resulted in a federal indictment against developer Anshoo Sethi. According to court documents, Sethi falsely claimed to investors he had support from hotels, the city and the state. Most of the money was refunded to investors. Sethi pleaded guilty to wire fraud in January. It remains unclear if his project’s investors received green cards.
The government said it has stepped-up fraud detection efforts to protect EB-5 investors.
