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|A model shown to potential immigrant investors in China in 2014,|
though not shown publicly in Brooklyn.
This watchdog blog, by journalist Norman Oder, offers analysis, commentary, and reportage about the $4.9 billion project to build the Barclays Center arena and 16 high-rise buildings at a crucial site in Brooklyn. Dubbed Atlantic Yards by developer Forest City Ratner in 2003, it was rebranded Pacific Park in 2014 after the Chinese government-owned Greenland Group bought a 70% stake in 15 towers. New York State still calls it Atlantic Yards. Contact: AtlanticYardsReport[at]hotmail.com
|A model shown to potential immigrant investors in China in 2014,|
though not shown publicly in Brooklyn.
The SEC is preparing sanctions against as many as two dozen immigration lawyers, people familiar with the matter said, for collecting deal fees from foreign investors trying to access the EB-5 visa program, which grants U.S. residency for $500,000 investments that create 10 jobs.And instead of quoting an industry cheerleader, which is typical with most reporting, Bloomberg found a skeptic:
The lawyers were prohibited from earning transaction fees because they weren’t registered as brokers, according to the people, who asked not to be named because the investigations aren’t public.
“It’s not been demonstrated that it does much to create jobs, it’s given rise to a lot of questionable schemes, and it’s very complicated,” said David Martin, a law professor at the University of Virginia who has served as general counsel to the Immigration and Naturalization Service.An investor alert
The U.S. Securities and Exchange Commission's ("SEC") Office of Investor Education and Advocacy and U.S. Citizenship and Immigration Services ("USCIS") are aware of investment scams targeting foreign nationals who seek to become permanent lawful U.S. residents through the Immigrant Investor Program ("EB-5"). In close coordination with USCIS, which administers the EB-5 program, the SEC has taken emergency enforcement action to stop allegedly fraudulent securities offerings made through EB-5.The announcement stated:
The SEC and USCIS are aware of attempts to misuse the EB-5 program as a means to carry out fraudulent securities offerings. In a recent case, SEC v. Marco A. Ramirez, et al., the SEC and USCIS worked together to stop an alleged investment scam in which the SEC claims that the defendants, including the USA Now regional center, falsely promised investors a 5% return on their investment and an opportunity to obtain an EB-5 visa.
In another case, SEC v. A Chicago Convention Center, et al., the SEC and USCIS coordinated to halt an alleged $156 million investment fraud. The SEC alleged that an individual and his companies used false and misleading information to solicit investors in the "World's First Zero Carbon Emission Platinum LEED certified" hotel and conference center in Chicago, including falsely claiming that the business had acquired all necessary building permits and that the project was backed by several major hotel chains.
Obtain copies of documents provided to USCIS.(Emphases added)
Request investment information in writing. Ask for a copy of the investment offering memorandum or private placement memorandum from the issuer. Examine it carefully and research similar projects in evaluating the proposal.
Ask if promoters are being paid. If there are supposedly unaffiliated consultants, lawyers, or agencies recommending or endorsing the investment, ask how much money or what type of benefits they expect to receive in connection with recommending the investment.
Seek independent verification. Confirm whether claims made about the investment are true. For example, if the investment involves construction of commercial real estate, check county records to see if the issuer has obtained the proper permits and whether state and local property tax assessments correspond with the values the regional center attributes to the property.
Look for warning signs of fraud. Beware if you spot any of these hallmarks of fraud:
Promises of a visa or becoming a lawful permanent resident. Investing through EB-5 makes you eligible to apply for a conditional visa, but there is no guarantee that USCIS will grant you a conditional visa or subsequently remove the conditions on your lawful permanent residency. USCIS carefully reviews each case and denies cases where eligibility rules are not met. Guarantees of the receipt or timing of a visa or green card are warning signs of fraud.
Guaranteed investment returns or no investment risk. Money invested through EB-5 must be at risk for the purpose of generating a return. If you are guaranteed investment returns or told you will get back a portion of the money you invested, be suspicious.
Unregistered investments. Even though a regional center may be designated as a regional center by USCIS, most new commercial enterprise investment opportunities offered through regional centers are not registered with the SEC or any state regulator. When an offering is unregistered, the issuer may not provide investors with access to key information about the company's management, products, services, and finances that registration requires. In such circumstances, investors should obtain additional information about the company to help ensure that the investment opportunity is bona fide.
Unlicensed sellers. Federal and state securities laws require investment professionals and their firms who offer and sell investments to be licensed or registered. Designation as a regional center does not satisfy this requirement. Many fraudulent investment schemes involve unlicensed individuals or unregistered firms.
Greenland’s top US executive and later its head of global development visited and approved. But Zhang Yuliang, Greenland’s chairman and president, would not sign the “Memorandum of Understanding” without meeting then Mayor Michael Bloomberg. The CBRE team arranged a City Hall meeting in 2014 and the MOU was signed.That explains the photo at right taken in October 2013, posted on Greenland's web page for news releases but not by the mayor's office, as I wrote last June.
The April 22nd Atlantic Yards Community Update Meeting (formerly known as Quality of Life) is being rescheduled for Tuesday, May 12th. We are rescheduling the Community meeting to ensure the most up to date information is share with the community. Just as a reminder all meetings will take place at: Just as a reminder all meetings will take place at:
@ 6:00 PM
Shirley Chisholm State Office Building
55 Hanson Place, 1st Floor Conference Room
Brooklyn NY 11217
The federal official who oversaw the growth of the program, Deputy Homeland Security Secretary Alejandro Mayorkas, told lawmakers last year that any weaknesses in the program have been tightened. But whistleblowers told ABC News that little has changed since concerns were raised about visa applicants being approved despite being suspected of fraud, money laundering, and in one instance, possible involvement in selling child pornography.Senator Charles Grassley (R-IA), the chairman of the Senate Judiciary Committee, expressed concern about the national security aspects of the program. ABC reviewed a report that indicated that more than 30 EB-5 "projects had at some point become the subject of a criminal investigation."
Mayorkas declined requests for an interview for this report, and when ABC News caught up with him, he ignored the cameras and questions altogether.
....Documents obtained by ABC News show that U.S officials had undertaken an investigation of a southern California shipping company, American Logistics International, and its Iranian-born owner, Alireza Mahdavi, for possible illegal shipments to Iran. Even as the investigation was underway, the company was re-certified by U.S. immigration officials as an EB-5 regional center, which entitles it to recruit foreign investors with the promise of a visa, and potentially, a Green Card. The company has raised millions of dollars from foreign investors, many from Iran.
Investment from EB-5 applicants has helped finance the construction of a New York sports arena and a Vermont ski resort and water park, help provide financing for a Hollywood movie studio, and even finance the construction of the FBI office building in San Diego.Actually, that part about the arena isn't true. (The video here actually showed the arena.) So ABC offered backhanded endorsement of the EB-5 investment in Atlantic Yards, which is hugely dubious.
Five different Homeland Security whistleblowers spoke with ABC News about a range of cases where visas were approved despite numerous red flags. They said objections were often ignored because the immigration program is so popular within the Obama Administration and with members of Congress from both parties.It's got bipartisan support because elected officials like to offer local developers/entrepreneurs cheap capital at no seeming public costs.
Some immigration groups have criticized the program as “nothing more than selling Green Cards.” Brent Wilkes, the executive director of the League of United Latin American Citizens, one of the largest Hispanic civil rights groups in the U.S. said it “short circuits” the immigration process, allowing foreign nationals “with enough cash” to leap ahead of legitimate applicants who lack the means.Of course it's selling green cards.
One of the oddities about the EB-5 program is that the U.S. government is giving out the green cards, but the entrepreneur who puts together the investment gets the money. This scheme seems inefficient and open to corruption. If our government really believes that it is a good idea to sell green cards, maybe we should drop the pretense that this is a job creation program. It might be more efficient to have the money go directly to the U.S. Treasury and reduce the deficit by billions of dollars a year. In fact, the U.S. government could auction off these green cards and perhaps raise even more money.The industry spin
Joseph noted the program is now so popular that the 10,000 visas allotted in 2014 for EB-5 investors were claimed in a matter of months, and he is lobbying for its expansion. The money has paid for popular projects -- a Brooklyn basketball arena, a California winery, a Vermont ski lodge, even a Hollywood movie studio – that have supported an estimated 42,000 jobs.That's tired rhetoric. How about: it's a win for the developer, especially since those jobs figures are so fuzzy.
“It's a win for the investor, who's seeking to get an immigration benefit, along with a return on their investment, along with the American worker who's able to get to work, thanks to the capital investment coming through the program,” Joseph said.
Hillary Clinton’s brother is involved. So are powerful California politician Willie Brown and Chicago political boss Richard M. Daley. One firm that helps wealthy Chinese gain access to the little-known immigration program even tried to recruit President Obama’s half-brother, Mark Obama-Ndesandjo.In New York, of course, some elected officials or former officials have been involved, including former Gov. David Paterson and Sen. John Sampson.
Most pointedly, the article misunderstands how the EB-5 program works. The article alleges that immigrant investors "can jump to the front of the line and obtain legal status to live in the U.S. for two years." This implies that immigrant investors take visas and a place in "line" from other immigrants who do not have the financial means to utilize the EB-5 program. This is simply inaccurate. Each visa category is distinct and separate from other categories, so the assertion that EB-5 applicants "leap ahead of legitimate applicants who lack the means," is simply not true.He's right, but also not quite the full story. EB-5 applicants leap ahead simply because they're wealthy, and can show their money is legit and have found an investment that purports to create ten jobs. That doesn't ring right.
As with any governing body, fraud typically stems from individuals, not the system, and the EB-5 program is no more systematically prone to exploitation than any other visa program. The program is not perfect, but the overwhelming evidence shows that right now, it is working.And he suggested legislation would improve it:
That being said, there are several pieces of legislation in the pipeline that would drastically improve it. The most notable bill is the American Entrepreneurship and Investment Act of 2015, co-authored by Congressmen Jared Polis (D-CO 2nd District) and Mark Amodei (R-NV 2nd District). The bi-partisan bill would make the regional center program permanent, and also set more rigorous standards for regional center operators and administrators. Legislation like Congressmen Polis' and Amodei's bill makes the program more secure and efficient, and would drive more money into the American economy and create more jobs for American workers.Other than setting some new standards regarding those involved in regional centers--a rather modest lift--the bill is an industry wish list. It endorses gerrymandering and does nothing about the job-counting issue.
I explained to the review board that we did not feel that the project was creating new jobs, and that [LA Films IV] [was] just using the money to replace other funds available to Time Warner, including cash reserves and their $5 billion revolving credit facility with Citibank. So the EB-5 money was not really resulting in any new projects that would not have otherwise been produced in the absence of EB-5 capital.That dubious use of lower-cost immigrant investor funds to replace existing funds is exactly what happened with Atlantic Yards, and when it replaces bridge financing, it's considered A-OK.
The Director stated that he believes that nothing is more important to the United States at this time than the creation of jobs for U.S. workers. This will inform how he views every classification. So, if the regional center claims that it will create jobs for U.S. workers, he will read the statute and the [regulations] as generously as possible. For other classifications, such as H-1 B, where there are statutory provisions designed to ensure that U.S. workers are protected, he will read the statute and [regulations] more narrowly. The director noted several times that these cases are affiliated with "people of influence" and "people with money" and that he has several more of these on his radar. It seemed clear to me that since "people of influence" have raised other cases to him (or a higher authority at DHS or the White House), the AAO will be requested to defend our draft I-924 and EB-5 decisions to the Director in the future, prior to issuance.(Italics added by IG, bold added by AYR)
In the past, this Department has sought unsuccessfully from Congress a number of statutory enhancements to the program’s integrity, including added legal discretion to deny or revoke cases when necessary, authority to exclude people with criminal backgrounds from participating in EB-5 regional centers, and authority to require regional centers to certify compliance with our securities laws. The EB-5 regional center program is up for statutory renewal again this year. I urge Congress to work with the Department to strengthen the security and integrity of the program.The latest scandal
The FBI is investigating a former top military aide to three U.S. presidents and his firm over allegations it bilked foreign investors out of millions of dollars by touting his White House ties and making promises of quick U.S. Green Cards to raise funds for a giant hotel complex, ABC News has learned. Five years after an elaborate ground-breaking ceremony in New Orleans, there is only a vacant lot and investors say almost $16 million has disappeared.The Noble Outreach project, let by retired Air Force Col. Timothy Milbrath, is among more than 30 EB-5 projects under some form of criminal investigation. In this case, there's a civil lawsuit filed against Milbrath's company by investors who claim the firm took their money but they didn't get green cards.
For an ambitious real estate tech startup, bringing on a well-connected former governor as an adviser sounds like a match made in heaven. But in the case of iFunding and former New York Gov. David Paterson, the marriage quickly turned sour.
A year after the real estate crowdfunding startup announced New York’s former governor had joined its board, the two sides are no longer on speaking terms. Instead, they have exchanged a series of bizarre accusations, involving questionable EB-5 deals, an alleged travel ban and supposedly dire financial straits.
Since 2011, Paterson has traveled to China three times. And he is making his fourth trip on Dec. 12. This trip is for the green taxi project of NuRide Transportation Group, a Long Island City-based transportation company that is raising money for expansion. “I might be the first former governor in the U.S. going to China to promote the EB-5 [investment immigration] program,” said Paterson.
On Dec. 12, Paterson will arrive in China and start to promote NuRide’s project in Shanghai and Nanjing. NuRide, for which Paterson is a board member, has already been running green taxi and delivery cars. This new project aims to raise $20 million from 40 immigrant investors in the first phase to purchase more green taxies and to remodel some of them.Here's where it gets interesting. NuRide's website is down or dead, but a cache remains:
The promotional brochure, in Chinese, has pictures of Paterson giving a speech as governor as well as former Mayor Michael Bloomberg grinning in a green taxi. Paterson said he has talked to the TLC (Taxi & Limousine Commission) and current Mayor Bill de Blasio about the project. But he noted this project is not a governmental project but rather a private one. “We can help the city to fill the void. So the city will be willing to work with us. But of course, an EB-5 program won’t be a governmental one unless people from the government are present at the promotion,” said Paterson.
|Paterson interviewed; photo from Mona Shah blog|
In Shanghai, former New York Governor David Paterson endorsed the New York City Green Transportation project, developed by NuRide Transportation Group. This project demonstrates how EB-5 capital is slowly traversing into the realm of transportation and infrastructure investment in the United States. The Governor’s presence attracted attention from local Chinese media, Xinhua news agency, Sina, Sohu, etc. The MSA [Mona Shah & Associates] team certainly made their presence known in China’s EB-5 capital market.
To support the development of small businesses... $150,000 is provided for the creation of a new EB-5 Immigrant-Owned Business Program at CUNY's York College.From the Summer 2013 newsletter of Assemblyman William Scarborough, the Queens legislator who chairs the Assembly Committee on Small Business (and was re-elected last year after being indicted):
I was pleased to be able to secure a $150,000 grant in the 2013 budget for the York College Small Business Development Center to create an EB-5 Immigrant Investor Program to stimulate job creation in the Queens community. Under the EB-5 Program, foreign investors who invest at least $500,000 in local businesses or create at least 10 new jobs, are given visas to reside in the United States.(Emphasis)
Court of DreamsThis is hardly novel in the NBA, though the Nets are more opaque than some, since they don't announce a ticket requirement.
Play where the pros play before or after a Brooklyn Nets game! Do not miss this opportunity to play an authentic basketball game on the court with the same amenities as the pros including announcers, access to the player benches, and the ability for your fans to watch and cheer you on. Call for ticket requirement.
SUNDAY, DECEMBER 23rd – CHAMPIONSHIP GAME @BARCLAYS CENTER (Details)The video of the event shows a rather sparse crowd.
* Each player will receive new uniforms, shoes, socks, backpack, headband, and t-shirt
* This weekend tickets will be on sale. Minimum tickets are $50pp or premium package which includes courtside seating during championship game and closer seating for Nets-Sixers game for $175pp (limited quantity available)
We want to thank the Brooklyn community and our entire fan base for your unwavering support. You are instrumental in the team’s success and have helped us advance to the playoffs each year we’ve been in the borough.Um, that's reminiscent of the alleged "unwavering" support from Barclays when it came time to renew the naming rights agreement in November 2008, as the project stalled during the financial crisis. Barclays actually renegotiated, and a reported $300+ million deal became a $200+ million deal.
Skanska Motion for Contempt of CourtSkanska Memorandum of Law backing motionSkanska lawyer's AffirmationSkanska Subpoena Request to Berlin Rosen
Skanska Subpoena Request to Greenland
Berlin Rosen Objections to Subpoena
Greenland Objections to Subpoena