EB-5 Fraud: Protecting Your Investment and Immigration Journey

The EB-5 Immigrant Investor Program offers foreign nationals a pathway to permanent residency in the United States by investing in job-creating enterprises. For many investors, the program represents not just a financial opportunity but a chance to secure a better future for their families in America.

Unfortunately, the program’s popularity has attracted unscrupulous actors who exploit investors’ dreams. At Barr Law Group, we’ve witnessed firsthand the devastating impact of EB-5 fraud—and more importantly, we’ve developed effective strategies to help defrauded investors recover their funds and preserve their immigration status.

Common Types of EB-5 Fraud

EB-5 fraud comes in various forms, often orchestrated by project developers, regional centers, immigration attorneys, and even financial institutions:

Misappropriation of Funds: Instead of using investor capital for the promised job-creating enterprise, fraudsters divert funds to unrelated businesses, personal expenses, or earlier investors in Ponzi-scheme fashion.

Material Misrepresentations: Some project developers drastically overstate job creation projections, falsify financial statements, or misrepresent project viability to attract investors.

Phantom Projects: In extreme cases, the entire investment project may be fictitious, existing only in glossy brochures and sophisticated presentations.

Improper Fee Structures: Some regional centers and attorneys charge excessive, undisclosed fees that deplete (or worse, divert) investment capital before it reaches the intended project.

Conflicts of Interest: When the same individuals control multiple entities in the EB-5 process without proper disclosure, conflicts of interest can lead to decisions that benefit insiders at investors’ expense.

Complex and one sided Documentation: When an investor seeks the return of capital, many times and in many project documents, developers will hide behind incomprehensible language that makes it difficult for an investor to navigate the return of their investments.

Warning Signs Every EB-5 Investor Should Recognize

Based on our experience recovering investments for defrauded clients, we’ve identified key warning signs:

• Guaranteed returns or “risk-free” investments
• Pressure to act quickly before conducting thorough due diligence
• Limited or inconsistent financial documentation
• Complex, multi-layered ownership structures that obscure accountability
• Resistance to independent verification of job creation claims
• Unwillingness to provide direct access to project management

How Barr Law Group Helps Defrauded EB-5 Investors

When EB-5 investors become victims of fraud, they face a two-pronged crisis: the potential loss of their substantial investment and the derailment of their immigration plans. Barr Law Group addresses both concerns through:

Investment Recovery: We pursue all viable legal avenues to recover fraudulently obtained investments, including actions against developers, regional centers, escrow agents, and other parties whose negligence or complicity enabled the fraud.

Immigration Pathway Preservation: We work with immigration authorities to explore alternatives that allow investors to maintain their immigration status despite project failure, including redeployment options and regulatory exceptions.

Regulatory Coordination: Our team collaborates with SEC investigators, USCIS officials, and other regulatory bodies to ensure a coordinated approach that serves our clients’ interests.

Preventative Consultation: For prospective EB-5 investors, we offer comprehensive due diligence services to evaluate potential investments before capital is committed.

Success Stories: Beyond Jay Peak

While the Jay Peak case received significant media attention, Barr Law Group was the only firm who doggedly pursued every potential wrongdoer and theory of recovery over nearly a decade of dedicated work.

Our record of success stems from our unique approach:

• Deep Financial Investigation: Our team includes forensic accounting specialists who can trace misappropriated funds through complex financial structures.
• Expanded Liability Framework: We pioneered legal theories that hold accountable not just the primary fraudsters but also the professional enablers who facilitated the schemes.
• Negotiation from Strength: Our thorough preparation and willingness to pursue cases through trial gives us leverage in settlement negotiations.
• Immigration Expertise: We understand the intricate relationship between investment recovery and immigration requirements, allowing us to craft solutions that address both concerns simultaneously.

The Jay Peak scandal stands as one of the most notorious cases of EB-5 fraud. Project developers in Vermont misappropriated over $200 million from more than 800 foreign investors across multiple projects.  Barr Law Group spearheaded the recovery efforts in this landmark case, taking on what many considered an impossible challenge. Over the course of a decade, our firm:

• Led aggressive multi-pronged litigation against a complex web of responsible parties including project developers, law firms, banks, regional centers, and promoters
• Pioneered innovative legal strategies that expanded the scope of liability in EB-5 fraud cases
• Persisted through extraordinary legal obstacles and delay tactics employed by defendants
• Built comprehensive forensic accounting evidence that tracked the misappropriated funds through labyrinthine financial structures
• Coordinated with federal regulatory authorities while maintaining unwavering focus on our clients’ dual needs: investment recovery and immigration pathway preservation

When others believed recovery was impossible, Barr Law Group’s tenacity and specialized expertise resulted in substantial recoveries for defrauded investors. Our singular dedication to this case transformed the landscape of EB-5 fraud litigation and established precedents that now protect investors throughout the program.

Choosing Your EB-5 Investment Wisely

The EB-5 program, when properly executed, can provide tremendous benefits to investors and the American economy alike. To protect yourself:

• Engage experienced counsel independent from the regional center or developer
• Verify all claims through multiple sources
• Review the track record of all involved parties
• Understand exactly how your investment will create jobs
• Ensure transparency in all financial transactions

Contact Barr Law Group

If you suspect fraud in your EB-5 investment or want to ensure proper due diligence before investing, contact our dedicated EB-5 recovery team at Barr Law Group.  Our initial consultation provides a confidential assessment of your situation and outlines potential paths forward.

With our proven record of helping investors recover from EB-5 fraud while preserving their immigration journey, Barr Law Group stands ready to protect your investment and immigration path.

Barr Law Group has established itself as the premier legal team for EB-5 fraud recovery, having fought and won cases that other firms considered unwinnable. Our decade-long pursuit of justice in the Jay Peak case demonstrates our unwavering commitment to our clients’ financial and immigration goals.