The Future of EB-5, What can we expect?
A Discussion of the Future of EB-5 with: Former NY Governor David Paterson; Ira Kurzban, Esq.; Peter D. Joseph; Nima Korpivaara, Esq.; Mona Shah, Esq.
(Source: EB-5 Conference Baruch College – 6/16/2016)
The first panel of the day, moderated by Mona Shah, Esq. of Mona Shah & Associates, PLLC, consisted of Former Governor of NY David Paterson, Peter D. Joseph, President of IIUSA, Ira Kurzban, Esq. of Kurzban Kurzban Weinger Tetzeli and Pratt P.A., and Nima Korpivaara, Esq. of David Hirson & Partners, LLP. The discussion focused on the prospects and potential amendments to the current EB-5 program in light of the Congressional sunset of the program on September 30th, 2016, and the high profile fraud cases.
These cases, such as the most recent investigations into Jay Peak Resort, and the program’s rise in popularity as a means of alternative financing, have provided an impetus for reform by both Congress and the SEC. Mr. Joseph and Governor Paterson highlighted this rise in popularity from the vantage point of the regional centers and governments managing a floundering economy. The program, they mentioned, saw explosive growth in the aftermath of the Great Recession, raising approximately 14 billion dollars post-2008 while raising only 1 billion dollars from 2006-2008. Mr. Joseph, according to his sources, said that if there would be a legislative change in the EB-5 program, this change would likely be in the minimum capital requirement for targeted employment areas, for the requirement has not changed since the EB-5 program’s inception.
In a similar vein, Mr. Kurzban and Mr. Korpivaara covered the legal and legislative questions associated with EB-5 projects, specifically the preservation of investor capital and sources of funds. Mr. Kurzban mentioned a forthcoming investigation would soon be made public. This investigation into the wrongdoing of yet another regional center would cause ripples within the EB-5 community, but would show the heightened tension of present enforcement. He iterated that the appointment of Mr. Nicholas Colucci, whose background is in finance and investigating fraud cases, to Chief of the Immigrant Investor Program demonstrates the desire of the agency to prioritize the elimination of deception and the security of the investors’ funds for their visas. He also noted that there was no protection yet in place for investors if USCIS decided to terminate a regional center if the project is under suspicion. He used the example of Path America. Even if investors were given the opportunity to re-invest elsewhere, their place in the que for visas would be lost. Mr. Korpivaara raised the issue of how to properly source funds from investors who come from nations where shadow banking dominates the commercial banking sector, for this hinders the ability of accountants and attorneys to track these fund transfers. These last two concerns have culminated in a new discussion about the program and how to best address these issues legislatively.
Towards the conclusion of this discussion, there was a general agreement to ameliorate these problems, and preserve and improve the EB-5 visa program. All of the panelists believed that the number of visas issues through EB-5 should be increased, for Mr. Joseph proclaimed that only 1% of all visas issued to immigrants to the US were EB-5. In addition to this solution, Mr. Joseph felt it necessary to reapportion the visa numbers per country, for Chinese visas comprised of 8,000 of the 22,000 visas pending. Mr. Kurzban expressed a desire to prioritize the protection of investors through coordination of USCIS and the SEC, as well as placing time limits on the adjudication of cases. Finally, Governor Paterson argued the benefits to taxpayers of using the EB-5 capital to revitalize US infrastructure as a focal point in petitioning Congress.
By: Roy G. Brooks III