Avoiding Conflicts of Interest Between EB-5 Immigration Attorneys and Regional Centers

Investing in an EB-5 visa is one of the most popular immigration pathways to a U.S. Green Card. However, EB-5 visa investors must navigate the complexities of the EB-5 program and remain compliant with USCIS regulations in order to immigrate successfully.

To qualify for an EB-5 visa, investors must invest at least $800,000 in a new commercial enterprise—usually a real estate development project—that creates or preserves 10 full-time jobs for U.S. workers.

In addition to meeting the investment requirement, EB-5 visa investors must demonstrate that the invested funds come from a legitimate source and satisfy admissibility requirements. They must submit Form I-526E to USCIS proving their compliance with the above points before immigrating to the United States.

EB-5 investors typically work with an immigration attorney throughout the process and invest through USCIS-licensed entities known as regional centers.

An EB-5 investor’s regional center and immigration attorney both play crucial roles. To a large extent, an EB-5 investor’s chances of obtaining a U.S. Green Card depend on the services provided by their attorneys and regional center sponsors.

However, any conflicts of interest between an investor’s immigration attorney and regional center can create significant risks. An investor’s immigration outcome and chances of getting a Green Card may be compromised.

In this article, we explore the relationship between EB-5 attorneys and regional centers, showing how investors can identify—and avoid—potentially dangerous conflicts of interest between these parties.

The Relationship Between Immigration Attorneys and Regional Centers

The relationship between EB-5 regional centers and immigration attorneys can vary across EB-5 offerings. They will likely have to collaborate to some extent, especially when it comes to sourcing the project documentation needed for Form I-526E.

What Immigration Attorneys Do

It is worth noting that the EB-5 visa program is complex, and there are many nuances that may not be immediately apparent to someone who is not familiar with the process. As such, having a knowledgeable and experienced immigration attorney on one’s side can be extremely beneficial.

Immigration attorneys can help investors evaluate the merits of a particular EB-5 project, conduct due diligence on the regional center and project developer, and ensure that all necessary documentation is filed correctly and on time. In addition, an attorney can help an investor navigate the various legal and regulatory requirements associated with the EB-5 visa program, including compliance with securities laws, tax laws, and immigration laws.

Immigration attorneys also help investors prepare and file their I-526E petitions and navigate the complex legal and regulatory landscape.

In most cases, the most challenging aspect of the I-526E petition is the source-of-funds documentation. USCIS’s high evidentiary standards for this section of the I-526E petition means that investors will have to carefully research how their capital was sourced and provide abundant evidence.

If USCIS does not consider that a “preponderance of the evidence” shows that the funds are legitimate, an investor’s I-526E petition may be denied. An immigration attorney’s expertise is crucial in this stage of the EB-5 process.

What Regional Centers Do

Meanwhile, regional centers serve as a conduit between EB-5 investors and projects.

In essence, regional centers are allowed to pool funds from multiple EB-5 investors. Each regional center sets up an investment fund, which then uses the EB-5 funding to either make a loan to or buy equity in the project entity.

USCIS allows EB-5 investors to calculate job creation through construction spending if they work with a regional center. This makes it easier for investors to create the 10 required jobs. Along with the ability to pool funds from more than one investor, this policy makes regional centers crucial in the EB-5 immigration industry.

The vast majority of EB-5 investors choose to invest in regional center-sponsored projects.

According to Michael, an EB-5 investor, you should avoid working with an immigration attorney who has a relationship with a regional center. Here’s what he recommends:


Avoiding Conflicts of Interest

Immigration attorneys may work closely with regional centers to obtain the necessary documentation for an investor’s I-526E petition. This may include business plans, financial projections, job creation estimates, and other information related to the EB-5 project.

In addition, documentation proving that the investment amount was wired to the regional center’s investment fund and provided to the project developer may also be obtained through the regional center.

Regional centers may even introduce immigration attorneys to potential investors, offering a streamlined approach to the EB-5 visa process.

Despite this collaboration, there is still potential for conflicts of interest. Immigration attorneys have a fiduciary duty to act in the best interests of their clients, and as such, should remain completely independent from the regional center.

If an immigration attorney has had past dealings with a regional center—perhaps having helped the entity gain USCIS designation—this can be dangerous for investors.

Due to conflicting interests with a regional center, an immigration attorney may advise an EB-5 investor to make decisions that would delay or otherwise hinder their immigration and financial outcomes.

Any past or current business relationships between an attorney and a regional center should be treated as a major red flag by EB-5 investors.

Another potential danger could take place when a prospective EB-5 applicant is evaluating potential projects. If their immigration attorney has had business dealings with a regional center, they may recommend one of the regional center’s projects—even if it represents a high degree of financial and immigration risk for the investor.

To mitigate potential conflicts of interest and protect their investments, EB-5 visa investors should be sure to select an immigration attorney who is completely independent of all regional centers. This means the attorney should not have any prior or ongoing business relationships with a regional center, project developer, or anyone else involved in the EB-5 investment process.

This will help ensure that the attorney can provide objective, unbiased advice and representation that is solely in the best interests of the investor.

Regional centers may also put their investors at risk by compromising the attorney-client privilege.

The Importance of Attorney-Client Privilege

Attorney-client privilege is a fundamental principle of the legal system that is designed to protect the confidentiality of communications between an attorney and their client. It allows clients to feel comfortable and secure in sharing sensitive financial information with their attorneys, knowing that the information will not be disclosed to anyone without their consent.

This privilege is particularly important for EB-5 visa applicants who are working with an immigration attorney.

One of the main reasons why attorney-client privilege is so important for EB-5 visa applicants is that it allows them to be completely honest and transparent with their attorneys. This is particularly important in the context of the EB-5 visa program, which requires applicants to provide extensive source-of-funds documentation. Without the assurance of attorney-client privilege, EB-5 visa applicants may be hesitant to share this sensitive information with their attorneys, which could compromise the quality of the advice and guidance they receive.

In addition, attorney-client privilege protects EB-5 visa applicants from having their confidential information disclosed to third parties, including EB-5 regional centers.

However, if an EB-5 regional center monitors the communications between an EB-5 applicant and their immigration attorney, this could be a major red flag. This clearly indicates that the regional center is not respecting attorney-client privilege and may be seeking to obtain information that is not relevant to the EB-5 visa application.

If a regional center follows the above policy of monitoring investors’ communications with their immigration attorneys, it represents a significant risk for investors. The best practice in this scenario is to work with a different, more trustworthy regional center.

EB-5 visa applicants should be aware of the legal protections that are available to them in the event that their attorney-client privilege is violated. In most cases, attorneys are required by law to keep their clients’ communications confidential, and if they fail to do so, they may be subject to legal sanctions and disciplinary action. If an EB-5 visa applicant believes that their attorney has violated their attorney-client privilege, they should seek the advice of a legal professional who can help them understand their options and protect their rights.

Maximize your Chances of EB-5 Immigration Success

The complexity of the EB-5 program requires the services of an experienced immigration attorney, and the selection of a reputable regional center is also essential. The relationship between immigration attorneys and regional centers is vital, but it can also create conflicts of interest that could compromise an investor’s chances of success.

It is essential to select an independent immigration attorney who has no prior or ongoing business relationships with the regional center, project developers, or anyone involved in the EB-5 investment process. And regional centers that violate attorney-client privilege can put EB-5 investors at great risk.

In summary, investors should exercise caution when selecting an immigration attorney and regional center for their EB-5 visa applications. By being aware of potential conflicts of interest, they can help protect their investments, ensure that their immigration journey is as smooth as possible, and maximize their chances of obtaining permanent residency in the United States.

For more information on how to immigrate successfully through the EB-5 program, schedule a free consultation with EB5AN.