Under the EB-5 program, a foreign investor needs to invest at least $500,000 into an American business or project that will create at a minimum 10 jobs per investor. In exchange for the investment, the foreign national will receive temporary residency, and can eventually apply for permanent residency for their entire family. Chinese citizens are particularly interested in the program as a way to offset uncertainty about investing in Chinese businesses, as well as an opportunity to get their children into prestigious American universities.
The couple exploited the EB-5 visa program with the help of a family friend, raising money from more than 100 Chinese investors, including some who are wanted fugitives for bribery and other crimes. According to court documents, the couple allegedly submitted false plans to federal authorities for projects that did not exist. Records show that most of the money they received was returned to the investors after receiving visa approval, with a portion kept by Victoria Chan and her father to fuel their extravagant persona.
The couple skimmed so much money from their scheme that they were able to live luxurious lifestyles, including expensive cars, an upscale Los Angeles area office, and numerous multi-million-dollar homes.
Agents from the FBI and Homeland Security conducted raids at the homes and offices of the Chans, where they ran a business set up in 2008 under the EB-5 visa program. While the couple has yet to be arrested, investigators are poring over company records in the hopes of uncovering all of the financial transactions arranged by the company.
The small office of the Chans – the California Investment Immigration Fund – operated inside of the Hilton San Gabriel in the San Gabriel Valley area near Los Angeles. Signs on the outside of the office advertised the EB-5 investor program, along with other legal services including real estate investment, insurance, and school admissions.
Investigators have yet to determine if the investors were duped or if they were complicit in the scheme. With some of the purported investors on the Chinese government’s list of most-wanted fugitives, authorities have suspicions that much of the investment may not have been above board. Some of the investors apparently did not invest their own money but rather borrowed the capital from the Chans investment fund, allowing them to fraudulently obtain visas under the program.
The EB-5 program demands that each program participant invests his or her own funds.
The investigation took years to complete, and investigators allege that the Chans opened 72 bank accounts linked to their investment fund or the numerous holding companies related to it. Some of the money invested in the fund was used by the Chans to buy personal and business properties.
Investigators uncovered that most of the business properties – vacant lots – were never developed as claimed by the company. Agents discovered that around 30 of the investors received at least some of their money back, yet failed to inform authorities and continued to pursue legal permanent residence under authority of the EB-5 program.