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End fraud-laden visa program for mostly-Chinese investors. By Nolan Rappaport

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Last week, federal authorities raided a Los Angeles-area business suspected of organizing a $50,000,000 visa fraud scheme for Chinese immigrants. Allegedly, the business took money from more than 100 Chinese investors for bogus business projects, allowing them to improperly obtain U.S. green cards. Three of the investors were fugitives wanted by the Chinese government.

From California to Vermont, fraud is part of the EB-5 Immigrant Investor Program (EB-5 program), established by Congress in 1990.

The program offers lawful permanent resident status to foreign investors and their families to encourage them to invest in new businesses here that will benefit our economy and create jobs for American workers but the program is rife with complications.

Has EB-5 achieved its objectives?

House Judiciary Committee Chairman Representative Bob Goodlatte (R-Va.) observed at a recent March hearing on the EB-5 program that it is “riddled with fraud and abuse and has strayed away from the program Congress envisioned when it created the program decades ago.” The program “is in desperate need of reform.”

Read more at --
http://thehill.com/blogs/pundits-blo...mostly-chinese

Published originally on The Hill

About the author.
Nolan Rappaport was detailed to the House Judiciary Committee as an Executive Branch Immigration Law Expert for three years; he subsequently served as an immigration counsel for the Subcommittee on Immigration, Border Security, and Claims for four years. Prior to working on the Judiciary Committee, he wrote decisions for the Board of Immigration Appeals for 20 years. He also has been a policy advisor for the DHS Office of Information Sharing and Collaboration under a contract with TKC Communications, and he has been in private practice as an immigration lawyer at Steptoe & Johnson.




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  1. ImmigrationLawBlogs's Avatar
    Update: May 6:

    This article is based on the flawed premise that if EB-5 investors are able to get the required funds out of China, they must be cheating or breaking the law.

    Not true. according to Bloomberg, they can do it legally by sending the money to Hong Kong, which has no currency controls.

    https://www.bloomberg.com/news/featu...s-money-exodus

    My original comment follows:

    First, it was Donald Trump's Mexican, and by extension ,all Latin American "criminals" and "rapists".

    Next, in the litany of America's right wing nationalism, came the Muslim "terrorists" meaning, in the parlance of top Trump advisers such as Stephen Bannon and the now disgraced Michael Flynn, not only ISIS and the other real terrorists, but every Muslim on earth.

    Now, in early April, when USCIS has normally been providing information about the number of cap-subject H-1B petitions which have been received and when the annual H-1B "lottery" will take place ,we are instead seeing announcements about how USCIS intends to "crack down" on alleged "H-1B fraud" - and - lest we forget - not all Computer Programmer positions might qualify as H-1B specialty occupations - something that we have known from the OOH for at least the past few years if not before.

    No one can miss the point -that educated, highly skilled IT and other professional workers, many of whom are from India and China, are less welcome, or not welcome at all, in Donald Trump's Stephen Bannon's, Jeff Sessions' and Kris Kobach's European immigrants only America.

    Now comes Nolan Rappaport, a distinguished, independent legal scholar who is not part of the Trump administration but who has written in support of some of its harsh immigration enforcement policies, to warn us about all the Chinese immigrants who are using the "fraud-laden" EB-5 program.

    Just in case there is still anyone left in America who doesn't get the point, the picture is becoming clearer than it ever was before.

    In the view of Trump and many of his supporters, Latino, Middle Eastern, Asian and other non-white immigrants are bad for America.

    I am not implying that Nolan himself supports this view. I am sure that he does not.

    But, in addition to Trump's overt, hate-filled rants against Mexicans and Muslims during his presidential campaign, and his attempts to engage in mass deportation against Hispanics and to ban more than a 100 million Middle Eastern and African Muslims from entering the US after taking office as president, the signs that he and many of his supporters do not want immigrants from South Asia and East Asia either are alo becoming unmistakably clear.

    One can only think of the raving of another popular politician and head of state, 80 years ago in Europe, that "Die Juden sind unser Unglueck.
    "
    (For those who do not know any German:

    "The Jews are our misfortune.)")

    With respect to Nolan's specific comment, no one will argue that EB-5 has been working out perfectly or that it has been entirely free from fraud.

    But If EB-5 is terminated, instead of being fixed and improved, so that it will better serve its real purpose of bringing economic benefits to America, what will the next proposal from the Trump, Bannon, Sessions Europeans only immigration triumvirate be?

    Bring back the Chinese exclusion laws?

    Roger Algase
    Attorney at Law
    Updated 05-06-2017 at 10:15 AM by ImmigrationLawBlogs
  2. ImmigrationLawBlogs's Avatar
    Requiring Chinese investors to prove that they have permission to remove the investment money out of China isn't based on ethnicity or national origin. It's based on the fact that the Government of China restricts the removal of money from China to $50,000 a year, per person.

    Nolan Rappaport
  3. ImmigrationLawBlogs's Avatar
    First, is Nolan an expert on Chinese exchange control law? What makes his so sure that China does not permit its citizens to take more that $50,000 out of the the country legally with the help of third parties?

    Could Nolan just be raising a red herring here?

    Second, with all due respect to Nolan, if one wants to find problems with the EB-5 visa, there have been much more serious ones reported than the one that he mentions above, as we have been reading about in Immigration Daily for quite some time.

    Nor am I suggesting that a throwback to the Chinese exclusion laws is the only possible reason for dissatisfaction over EB-5.

    But Nolan appears to be assuming that any Chinese investor who uses the EB-5 program must ispo facto be breaking some law somewhere, in China if not the US.

    This is the same kind of assumption that led to the Chinese exclusion laws - i.e., that if someone from China wanted to immigrate to the US, he/she must have some kind of intention to break the law or otherwise harm our society.

    Let's leave that kind of thinking back in 19th century history where it belongs.

    I respectfully suggest that we don't need that kind of attitude toward any racial, ethnic or religious group of immigrants in 21st century America.

    Roger Algase
    Attorney at Law
    Updated 04-12-2017 at 11:46 AM by ImmigrationLawBlogs
  4. ImmigrationLawBlogs's Avatar
    Quote Originally Posted by ImmigrationLawBlogs
    First, is Nolan an expert on Chinese exchange control law? What makes his so sure that China does not permit its citizens to take more that $50,000 out of the the country legally with the help of third parties?

    Could Nolan just be raising a red herring here?

    Roger Algase
    Attorney at Law
    How do I know that China has a $50,000 restriction?

    See page 71 of the 2016-2017 edition of The EB-5 Book. It's sold by ILW.com if you don't have a copy yet. http://www.ilw.com/books/TheEB5Book.shtm

    It provides a link to a Chinese government webpage on the rule. I found it and the site provides English versions but l lost it because the site is buggy.

    I also found more than half a dozen different articles from reputable newspapers that talk about it. I include a few of these in the article.

    Roger is right though that the law can be circumvented. How else would there be so many Chinese EB-5 investors. I think he is referring to the practice of having 10 different friends or relatives send the money to you in America. I suppose you can call that legal, but it clearly is circumventing the $50,000 restriction, which makes its legality questionable. In any case, my point isn't that it can't be done. My point is that the willingness to engage in such maneuvers is not a good trait for a businessman. Why should we be giving green cards to businessmen who circumvent the laws of their own country? What can we expected from them if they establish businesses here?

    Nolan Rappaport
    Updated 04-12-2017 at 06:01 PM by ImmigrationLawBlogs
  5. ImmigrationLawBlogs's Avatar
    Nolan appears to assume that using friends or other third parties to send money out of China is a violation of the laws of that country, rather than a perfectly legal loophole.

    I am not sure that he is correct in that assumption. For one expert's opinion, see:

    http://www.deshlaw.com/legal-insight...b-5-investment

    On the assumption that the Chinese investors are using legal loopholes, rather than openly violating their own country's laws, and on the additional assumption that their investments in the US comply with US law in full, are their activities really all that harmful to a country which has just elected a president who had to settle a fraud lawsuit against him for $25 million to prevent the case from going to trial?

    Or do we have one standard of legal and ethical conduct in this country for Chinese immigrants and a different one for white US billionaires running for president?

    The answer to this last question is so obvious that I realize it is silly for me even to ask it.

    Roger Algase
    Attorney at Law
  6. ImmigrationLawBlogs's Avatar
    Roger is right that I think using friends or other third parties to circumvent China's $50,000 restriction is illegal, and the article he cites doesn't say otherwise.

    Odd that he would give the benefit of the doubt to Chinese investors but not to the President of the United States. Law suits are settled for many different reasons.

    As for his one standard argument, he was fine with applying a different standard to Hillary Clinton on handling classified information. Whether it was a crime or not, FBI Director Comey said it was "extremely careless," but Roger never said a word about that.

    Nolan Rappaport
  7. ImmigrationLawBlogs's Avatar
    Nolan has not shown anything other than his own unsupported speculation to back up his contention that using relatives or other third parties to take funds out of China is illegal in that country, rather than just a legal loophole.

    Certainly there are many Chinese laws which Nolan would never dream of trying to defend or enforce to the letter, with no exceptions or loopholes - the law forcing women pregnant with a second child to have abortions, for one.

    The law making it illegal to oppose the ruling Communist party, for another.

    Laws or policies providing Chinese government assistance to North Korea.

    Laws denying asylum to refugees from North Korea and returning to them to their country for almost certain torture and execution.

    Why is it suddenly so important to make sure that no one evades or runs around any part of China's wonderful legal system?

    Nolan also mentions Hillary's FBI investigation, as if that had the slightest connection with EB-5.

    If this topic had even the slightest relevance, I would also suggest to Nolan that if he takes a look at the news, he will see that the Trump administration is also under FBI investigation over the president's alleged ties to Russia - an investigation which could lead directly to the oval office and the man sitting behind the desk in that office.

    Of course, Nolan would yell foul at my comparing Trump with Hillary over the FBI, so, out of fairness, I will mention one no doubt "purely technical" difference.

    The FBI investigation of Hillary Clinton has been closed and has now taken its place as part of America's past history, along with the California gold rush, the Pony Express, the Harding administration and many other events that school children learn about in their classrooms every day

    On the other hand, the FBI investigation of Trump's alleged ties to Russia is still very much open and ongoing.

    Nolan also points out that civil lawsuits are settled for many different reasons.

    This is absolutely true. One of the many possible reasons for settling a lawsuit is that a given defendant may have been accused running a nationwide fraud scheme which at least one, if not more, state attorney generals have refused to allow in the state or states concerned, and the defendant happens to be a wealthy tycoon with more than enough funds to buy the plaintiffs off and prevent the lawsuit from going forward.

    Admittedly, as Nolan points out, there are many other reasons for settling civil lawsuits as well. I am only mentioning one out of many possibilities, of course.

    Only one out of many, for sure.

    Roger Algase
    Attorney at Law


    Updated 04-14-2017 at 08:24 PM by ImmigrationLawBlogs
  8. ImmigrationLawBlogs's Avatar
    Why is Nolan in such a rush to assume that Chinese investors must be cheating or breaking the law to send EB-5 funds out of China? According to Bloomberg, they can do it legally through Hong Kong, which is part of China and has no currency controls of its own.

    https://www.bloomberg.com/news/featu...s-money-exodus

    Roger Algase
    Attorney at Law
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