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How can I verify the legitimacy of a direct investment broker?

I have been approached by a U.S. company wishing to raise funds for my company through direct EB-5 investments, and I wanted to see if there are any ways to determine their legitimacy in regards to USCIS or any other governing bodies. Is there an avenue to verify a company representing "direct" non-regional center investments for domestic companies?

Answers

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    Steffanie J Lewis

    Immigration Attorney
    Answered on

    The first question to ask is whether the broker is licensed. If not, the information you receive should be construed as informational only and not as an advertisement soliciting for any particular purpose or product. It has been my personal experience that the world is full of "consultants" who, for a fee, want to advise a new enterprise on how to raise funds but, unfortunately, produce invoices but no investment funds. By contrast a direct EB-5 investment may be beneficial for an eligible new or troubled business enterprise. The first question is whether your business enterprise is eligible and that is a legal question. You need an attorney who practices with EB-5 direct investments to aid you in making that initial determination.

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    Ed Beshara

    Immigration Attorney
    Answered on

    First, retain the services if an experienced EB-5 immigration attorney who has previously worked with credible broker/dealers. Second, your attorney will be able to determine your requirements and ask the appropriate questions to the broker/dealer so as to determine the ideal broker/dealer for your direct EB-5 goals.

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    Salvatore Picataggio

    Immigration Attorney
    Answered on

    There are some agencies that perform due diligence services on EB-5 projects and deals, and there are some organizations for EB-5 professionals (this site is a good start). If you have your own immigration counsel (as EB-5 is an immigration process) then your attorney should be able to help make this determination.

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    Oliver Huiyue Qiu

    Immigration Attorney
    Answered on

    Regretfully the answer is no. The issue seems to fall into the blind spot that neither the U.S. Citizenship and Immigration Service (USCIS) and the U.S. Securities and Exchange Commission (SEC) are keen to regulate. So far, in my knowledge, no broker has been sanctioned by either agency for unethical or fraudulent conduct when it comes to EB-5 financing. You are justified to be cautious. Even though there is no Dun & Bradstreet here, many immigration attorneys are familiar with the players in the field and is knowledgeable enough to tell black from white.

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    Ian E Scott

    Immigration Attorney
    Answered on

    There is not any USCIS verification that is possible, as USCIS "approval" only applies to regional centers. The due diligence you perform on the company would depend on the nature of the company and who governs them. If the company is just a company who finds projects for EB-5 direct investors, there may not be any body that regulates them. If the company is an investment adviser finding investments for clients (or assisting with the sale of securities), then they are regulated by the Investment Advisor Act and other federal and state legislation. Regardless of who regulates the company though (if anyone), it will be important to perform due diligence on them as they will likely want financial information to attract investors.

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    Kyle Barella

    Immigration Attorney
    Answered on

    While nearly anyone can raise money from the EB-5 program, you should speak with an immigration attorney to figure out if the broker that approached you is legitimate and understands the EB-5 program. Also, depending on the compensation they are asking from you will determine what requisite securities licenses they need to hold to receive payment. Along with speaking to an immigration attorney who focuses on EB-5, I suggest you speak with an EB-5 investment adviser.

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    Stephen Berman

    Immigration Attorney
    Answered on

    You should do exactly what you would do for any other investment.

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