Foreign citizens making big investments in U.S. in exchange for green cards

The EB-5 program was so poorly run in the 1990s that it was effectively shut down from 1998 to 2003. A 2005 GAO report found that problems arose when many investors were allowed to give promissory notes instead of cash. U.S. officials said the program also has suffered from state and local officials skirting the rules to make projects qualify for financing.

As EB-5 has grown, it has sprouted a huge network of recruiters and middlemen, who connect foreign investors who want visas with U.S. developers who want capital.

(The Washington Post/Sources: U.S. State Department; U.S. Government Accountability Office; U.S. Citizenship and Immigration Services)

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Some have been incompetent or corrupt.

Last month, for example, the Securities and Exchange Commission brought fraud charges against Anshoo R. Sethi, 29, who ran a regional center in Chicago. The SEC alleged that Sethi bilked 250 mainly Chinese investors out of nearly $11 million in administrative fees after getting them to put up EB-5 investments in a hotel project that did not have proper building permits.

Without a valid project, the SEC said in a statement, Sethi “exploited these investors’ dream of earning legal U.S. residence.”

‘Our whole life is in there’

Rene and Judith Dekker moved from the Netherlands to Denmark in 1990, bought a dairy farm and ran it for nearly a decade. But they yearned to move to a place with more open spaces, cheaper land, lower taxes and more adventure — Canada, maybe, or the United States.

So in 1999 they flew to Texas to pursue their dream. Way too hot.

Then they heard about Dutch farmers who had settled in central Michigan, in a place called the Thumb. On a map, Michigan looks like a mitten, and its thumb is a peninsula in Lake Huron. They visited. Cool breezes, endless pastures and rich soil. It felt like home.

In 2000, they received a visa called an E2, which allows citizens of countries that have commercial treaties with the United States to move here to run a business, provided they make a “substantial” investment and run the business themselves.

The E2 visa can be renewed every two years, but it does not offer a path to citizenship. Most significant for the Dekkers, children are covered only until they turn 21; after that, they must leave the country.

The Dekkers sold their farm in Denmark and paid $250,000 for their farm in Ubly. They moved into their small white farmhouse in 2000 and started their new life with three young children, a couple of ramshackle barns and 70 Holsteins.

Over the next decade they slowly built barns, added milking equipment, hired a dozen employees, and bought fields to grow corn and hay to feed their expanding herd. They paid their taxes and put their kids in public schools. And they grew their farm into a 1,000-acre operation that is one of the largest dairies in the area.

But in 2011, worried that their teenagers would soon turn 21, they called an immigration lawyer in Detroit. She told them about EB-5 and referred them to a company that advises U.S. firms and foreign investors.

That firm gave them a list of development projects that were seeking EB-5 investors, including a Florida shopping mall. The Dekkers have never been to Washington, but they chose the Marriott Marquis because they said they felt safe investing in a big-name hotel chain in the nation’s capital.

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