New York City has been largely free of EB-5 fraud cases in the past, unlike much of the rest of the country, but the U.S. Securities and Exchange Commission has just sued businessman Nadim Ahmad and lawyer Mona Shah for participating in a fraudulent $66 million EB-5 scheme there.
The EB-5 program offers a family-sized batch of green cards to aliens making allegedly job-creating investments if made through a Homeland Security-approved but not guaranteed investment.
The SEC, often the cop on the EB-5 beat, charged that:
. . . from approximately June 2014 through December 2018, Ahmed, NuRide and NYC Green [two companies related to him] falsely told NYC Green investors that NYC Green would be operated in a manner consistent with the requirements of the EB-5 visa program and that NYC Green’s principals had contributed $11 million to the company. Further, Ahmed, NuRide, and NYC Green allegedly put key revenue-generating contracts in NuRide’s name despite telling investors that NYC Green would be the operating transportation business. Ahmed also allegedly used one investor’s funds to pay a portion of a prior settlement between another one of his companies and the SEC.
The complaint also said:
In addition, from June 2014 through November 2022, Ahmed, NuRide, and NYC Green, along with Shah, her law firm, and three other entities associated with Ahmed and/or Shah, allegedly offered or sold unregistered securities, including to individuals residing in the United States, in three offerings, for which no exemption to the registration requirements was available.
It continued, significantly in this now nine-year-old enterprise: “. . . none of the investors in the offerings has received unconditional permanent residency status or a return of their investment.”
NYC Green is identified on the internet as a trucking firm with 11-50 employees; NuRide’s entry suggests fleet management, parking lots and transportation services, based in Queens. The SEC press release is silent on the specifics of these businesses, and the identities of the more than 100 investors, who, given the time frame, probably put up $500,000 each.
Most EB-5 activities in New York City have dealt with real estate and most of them have not wound up in court. Reports of this kind of fraud have usually dealt with other cities, notably those in the Sunbelt and with middlemen with non-Arabic names.