A group of 88 Chinese investors in a failed downtown Chicago EB-5 project have settled their case against the developers and will secure about three-quarters of their money back, but no visas.
Given the fate of many other EB-5 investors, the 88 should regard themselves as lucky; so should TD Bank, the bank holding their money, which escaped unharmed.
The terms of the settlement, as reported by a Law360 article (behind a partial paywall) are that the alien investors "have reached a settlement with the developer that would see all their money returned plus fees."
I would not have written it that way because as much as 25 percent of the investments, or $12 million, will go to the class action lawyers who pried the money away from the developer, as the article also reports. The remaining $38 million or so goes to the aliens.
Each alien had, in this case, invested $500,000 in the project and had paid $50,000 in fees to the middlemen involved. Currently the minimum investment, set by the Department of Homeland Security, is $900,000, but these investments were made several years ago under earlier rules.
My assumption is that no visas will be issued to the investors because no jobs have been created by the non-construction of the project. In some other EB-5 situations, the investors have lost all or most of their money, and the visas as well. (In the EB-5 or immigrant investor program the investor's family, including children under 21, all get conditional green cards and work permits, with the conditions dropped once the project is, in fact, under way.)
The case is Dou et al. v. Carillon Tower/Chicago LP et al., case number 1:18-cv-07865, in the U.S. District Court for the Northern District of Illinois. The investors in this class action are represented by Glen J. Dunn and Douglas Eliot Litowitz. The latter has been a sharp critic of the EB-5 program, as we reported earlier.
EB-5 Regional Centers Continue to Decline. Reflecting the continuing shrinkage of the EB-5 program, generally, the number of DHS-licensed regional centers – the middleman agencies – has declined as we reported earlier at this rate:
|September 16, 2019||822|
|January 15, 2020||792|
|July 10, 2020||711|
The number, as of November 3, 2020, is 674. Thus, there has been a loss of more than 200 of these agencies (routinely organized by U.S. citizens) in less than two years.