In a rare bipartisan effort, Sens. Patrick Leahy, D-Vermont, and Chuck Grassley, R-Iowa, have introduced legislation to clean up the fraud-plagued EB-5 foreign investor program.
The EB-5 Reform and Integrity Act of 2021 requires the Department of Homeland Security to perform regular audits of the regional centers that sponsor EB-5 construction projects, as well as visit those projects.
One of the largest EB-5 frauds in history took place at Jay Peak ski resort, where partners Bill Stenger and Ariel Quiros were accused of misappropriating hundreds of millions of dollars of investors’ money. Quiros personally pocketed some $50 million.
More:Assurances aren’t enough: Pressure mounts on ski resort owner in Vermont’s largest fraud
The EB-5 program is intended to promote economic development in depressed parts of the country, like the Northeast Kingdom, by offering foreign investors green cards and a path to U.S. citizenship in exchange for a $500,000 investment.
Leahy said in a news release that the Department of Homeland Security can’t fix all of the EB-5 program’s flaws, and that Congress must act “decisively” to address the fraud and other vulnerabilities “that have come to define the EB-5 program.”
“Our bill would do just that,” Leahy said.
Grassley described the program in a news release as having been “a mess for years.”
“Foreign investors exploited the program to get fast-tracked green cards, domestic developers exploited foreign investors to get fast cash for bogus projects and government officials picked winners and losers to score political favor,” Grassley said in a scathing assessment.
In addition to the regular audits by the Department of Homeland Security, the legislation establishes new disclosure requirements for EB-5 regional centers to protect investors and certify compliance with program rules.
Contact Dan D’Ambrosio at 660-1841 or firstname.lastname@example.org. Follow him on Twitter @DanDambrosioVT. This coverage is only possible with support from our readers.