Are there are any regulations that would prohibit 1) a convicted criminal, 2) someone with a previous bankruptcy, 3) a person with a history of civil judgments against him, or 4) a person with a history of real estate foreclosures from organizing and managing a regional center? What may disqualify someone from managing an EB-5 regional center?
You should retain the services of an experienced EB-5 immigration attorney and securities attorney who will be able to guide you on the best practices and need for transparency in managing a regional center and an EB-5 project. For instance, the legal background of the developer of the EB-5 project should be disclosed to the EB-5 investors and presented in the securities offering documents.
There soon will be. Whatever the case, all such things would need to be fully disclosed in a PPM for any project in which this regional center's manager was involved.
At the moment there is no specific legislation; however, Senator Jeff Flake has introduced an Integrity Bill that will bar persons with some convictions and certain judgements.
Currently, the regulations do not specify, but allow USCIS the ability to terminate a regional center that no longer serves the interests of the program. It seems to me that this should provide authority to also deny a regional center application, or terminate a regional center, if USCIS discovers that someone is not fit to run a regional center due to previous fraud or securities related violations, or someone with a track record of failed projects. It might not allow USCIS to terminate a regional center if the principal had convictions not related to fraud, dishonesty, or securities violations, because such convictions may not be reasonably related to the ability to run a regional center. Keep in mind that ALL of the proposed EB-5 legislation circulated in the last year did have some kind of prohibition on persons with various criminal or civil violations controlling a regional center, so it is likely that we will see an explicit prohibition, either through legislation or regulations in the near future. While this is a good thing, I would argue that USCIS has the inherent authority to withhold approval of certain individuals already, as explained above.
Currently, not really. Many checks are being proposed to look into the backgrounds of the regional center principals, but right now it is on the shoulders of the investors.
I know of no specific statute regarding disqualification of a principal in a regional center. That being said, I think a criminal background and numerous civil litigations would be a "red flag" to USCIS adjudicators and would likely lead to a refusal.
