The U.S. Supreme Court rarely deals with EB-5 (immigrant investor) cases, but did so yesterday, when it supported the Securities and Exchange Commission (the cop on the beat) and refused to hear a case against a New York immigration lawyer, Hui Feng, costing him $2.4 million, according to an article behind a partial paywall by Law360.
The EB-5 program grants a family-sized set of green cards to investors who put up a $900,000 or more (it used to be $500,000) investment in a project (usually urban real estate) approved by, but not guaranteed by, the U.S. Department of Homeland Security. Many of these investments have failed and have wound up in court.
This case involved, as so many of them do, Mainland Chinese investors, on one hand, and a U.S. middleman with a Chinese name, on the other. Specifically (and as often is the case), Feng was charged by the SEC for working as a broker without the appropriate license, as well as securities fraud for failing to disclose his interest in investment referrals to clients.
Feng made an interesting argument in his own defense, as we reported several years ago, saying that "he was not obliged to get an SEC license because 'everyone knew that the EB-5 visa program was an immigration program and not a securities program.'"
The trial judge, an appellate panel, and now the Supreme Court all refused to buy that line of reasoning (agreeable as it may be to critics of the EB-5 program).