Illegal financing is a concern for immigrant investors in the US

In an excellent review of American kleptocracy, A book written by journalist Casey Michel. los angeles book reviews The message of this book can be summarized as follows: “For years, one country has served as the world’s largest offshore haven, attracting hundreds of billions of dollars in illicit funds with direct ties to corrupt regimes, extremist networks, and the worst the world has to offer. But it wasn’t sand-splattered Caribbean islands or even traditional financial secrecy destinations like Switzerland or Panama that came to dominate the world of offshoring. , the country that benefits the most is also the country that still claims to be the moral leader of the free world and claims to be leading the fight against wrongdoers and corrupt people: the United States.”

The book review explains, “How the United States entered the global offshoring epicenter, how states like Delaware and Nevada perfected the art of anonymous shell companies, and He talks about a book that examines how post-9/11 reformers have overseen U.S. offshoring. Success brings a flood of new illicit finance directly to the United States. How African despots and post-Soviet oligarchy came to control the American coastline, American industry, and entire cities and small towns in the American Midwest. How Nazi-era lobbyists spawned an entire industry of spinmen whitewashing crooks and tyrants across borders, and now how dirty money infiltrates America’s universities, think tanks, and cultural centers. Are you starting to do that? And how those on the front lines are working to restore America’s legacy of anti-corruption leadership and ultimately end this reign of American kleptocracy. ”

trillions of dollars flying around

In many other books, such as those written by Frank Fogle. Enablers: How the West supports banditry and corruption and how they threaten democracyBill Browder’s Freezing Order: The true story of Russian money laundering, murder, and surviving Vladimir Putin’s wrath, we have been informed that trillions of dollars of illicit wealth are flowing into bank accounts around the world, and we have been warned of the corrupting effects it has on us and our democracies. It seems almost impossible to somehow control this theft and the devastation it leaves in the countries affected by it. Hopes for a better post-Cold War, post-apartheid world are lost in this illegal world where oligarchs, gangsters, thieves, and outright crooks seem increasingly involved in creating the rules by which we live. As they stepped in, it almost disappeared.

One area of ​​American immigration where this sea of ​​stolen wealth is a concern is EB-5 investor immigration. Part of the impetus for the Integrity Reform Act passed on March 15th^th, 2022, aimed to address shortcomings in anti-money laundering efforts. The basic rules are contained in the Bank Secrecy Act (BSA).The main concerns are being established genuine Identify sources and channels of funds, thwart tax avoidance attempts, and monitor common involvement in illegal activities related to fundraising.

Clean money is key for USCIS

U.S. Citizenship and Immigration Services (USCIS) requires investors to establish legitimate sources and channels for every dollar invested in an EB-5 project, even if it is only $800,000. This requirement prevents the collection of illegally obtained funds. $1,050,000 for regional center projects and $1,050,000 for direct investment EB-5 projects. This means that each dollar must not be found mixed in funds that cannot be proven to be clean. In other words, if even a dollar of ill-gotten gains is mixed in and added to his EB-5 investments, it will taint all of his remaining EB-5 investment funds, and all funds will be added to his EB-5 investments. will not be able to receive approval.

But that’s not all. The program also requires investors to establish the following conditions: Authentic One of the funds used to pay management fees in excess of the required minimum EB-5 investment. This is a welcome level of scrutiny, but not necessarily as harsh as possible. For example, there is no requirement for an investor to demonstrate that other funds owned by the investor were legally generated. Most likely, the funds being invested in EB-5 projects are very clean and may prove to have been obtained through fraudulent means. genuine Other funds held by the investor may not be as clean, such as funds generated from the sale of a home that the investor’s family has owned for many years. Some gang members may be able to avoid entering the United States through the EB-5 program if they identify themselves in this way.

Strengthening oversight of illegal funds

Therefore, some other jurisdictions involved in investor immigration require investors to disclose the full source of their wealth. In recent years, the EU has increasingly regulated member states’ “golden visa” programs in this direction. They explained that the region “poses security risks, money laundering, tax evasion, terrorist financing, corruption and organized crime infiltration and is incompatible with EU norms.” This scrutiny standard is significantly more stringent than that currently in place in the US’s EB-5 world.

In Fogle’s book enabler Oligarchies, gangs, and other criminals seeking to legitimize their ill-gotten gains rely on a virtual army of supporters ready, willing, and able to help wipe out their ill-gotten gains. He points out that they will rely on it. The backer could be a banker, lawyer, accountant, or financial advisor who is willing to help in exchange for a hefty fee that the investor is willing to pay to clean the money. The challenge in the EB-5 world is to identify and stop these enablers from facilitating illicit funds and to protect programs from attempts to launder money illegally siphoned from the country or money stolen outright. is. An important role must be played by EB-5 lawyers, who are tasked with proving the legitimacy of the funds, but they must not only determine what is being invested in the EB-5 project, but also what else. It is necessary to consider whether investments are being made. Sources of funds likely to be held and used by the customer. For example, this could include a review of investor funds used to pay legal fees and expenses in making an EB-5 investment. It could also mean looking into a customer’s financial situation more broadly to avoid problems. If those working in the EB-5 program do not take these steps as part of best practices, they may face future regulations requiring them to do so.

This may be a tall order for many attorneys working in the competitive world of EB-5 investments. In this regard, the adage “Show me your friends and I will tell you who you are” comes to mind. While it can be difficult to stay away from the world of illegal finance, those involved in the world of EB-5 can sleep peacefully at night without the worries that come with stolen money. It also ensures the future legitimacy of the EB-5 program, both for those involved in the program and for the investors themselves.

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