SEC Brings Enforcement Action in EB-5 Visa Program Investment Scam

Sandy Winick Indicted
Securities Lawyer 101 Blog

Like many other countries, the United States offers potential immigrants preferential treatment—in the form of conditional visas and eventual green cards—if  they’re willing to invest in economic development projects that will preserve or create jobs in their new home.  What’s offered is called the EB-5 Visa Program.  While it should be a win-win proposition for well-off immigrants and the U.S. economy, the process can present dangers to would-be participants who take advice from the wrong people.

On October 1, 2013, the Securities and Exchange Commission (“SEC”) announced that it had brought fraud charges against a Texas couple in connection with an EB-5 scam. The Commission’s complaint alleges that Marco and Bebe Ramirez and three companies they own stole $5 million from investors by promising the money entrusted to them would be used to help their victims obtain visas.

In 2010, the Ramirezes sought approval from the United States Citizenship and Immigration Services (“USCIS”) to register their company USA Now as a Regional Center.  Regional Centers are permitted to accept and direct investments from foreign nationals into investment opportunities that satisfy the EB-5 visa requirements.  Funds collected by Regional Centers are supposed to be held in escrow until the money is actually invested and the other requirements of the program are met.

The Ramirezes, however, opened no escrow accounts.  They instead diverted investors’ money to their own uses, and on at least one occasion used it to make a Ponzi payment to an existing investor.  In addition, some of the investments they proposed were in companies in which they themselves had a stake.  Initially, the couple targeted Mexicans, but more recently also took money from Egyptians and Nigerians.

In July 2013, the Federal Bureau of Investigation (“FBI”) raided the USA Now offices and the Ramirez residence, seizing documents and assets, including cars that had been purchased using investor funds.  Unfortunately, the alleged perpetrators still control bank accounts containing fraudulently obtained funds, and Marco Ramirez has continued to travel abroad, soliciting new investors.

The SEC seeks an asset freeze for the Ramirezes and their companies, an order requiring them to prepare a sworn accounting of the money obtained from investors, an order prohibiting the movement, alteration, and destruction of books and records, an order directing financial institutions to identify accounts and safeguard assets, an order directing the couple to surrender their passports, and more, including disgorgement and civil monetary penalties.

“Through their investment scheme, the Ramirezes abused a program intended to attract foreign capital to create U.S. jobs,” said David R. Woodcock, Director of the SEC’s Fort Worth Regional Office.  “The Ramirezes misappropriated investor funds for their own purposes without any regard for the harm they caused investors who were seeking an avenue to U.S. residency.”

The SEC and the USCIS also issued a joint investor alert warning about schemes of this kind.  It may be read here:  http://www.sec.gov/investor/alerts/ia_immigrant.htm.

See also:  https://www.securitieslawyer101.com/eb-5/

For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at info@securitieslawyer101.com or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
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