Senate Judiciary chair seeks answers about alleged fraud by senior living developer

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Sen. Chuck Grassley (R-IA), chairman of the Senate Judiciary Committee, has asked Homeland Security Secretary John Kelly to provide extensive information about a California senior living community developer alleged to have perpetrated a multimillion dollar scheme to defraud the federal government through the EB-5 visa program and obtain “green cards” for some fugitives who are on China's “Most Wanted” list.

The EB-5 Immigrant Investor Program, administered by U.S. Citizenship and Immigration Services, part of the Department of Homeland Security, provides lawful, permanent residence to foreigners in exchange for their investing at least $500,000 in a U.S. business visa program that creates 10 new American jobs. The program is scheduled to expire at the end of April unless Congress intervenes.

Earlier this month, the FBI and Homeland Security raided the San Gabriel, CA, business office of California Investment Immigration Fund, which maintains on its website that its EB-5 projects focus on financing and developing commercial and mixed-use real estate projects, including senior living facilities and other housing, hotels, restaurants and retail.

The company's owners, authorities believe, “convinced more than 100 foreign Chinese nationals to invest a total of more than $50 million with the fund and related companies,” according to an April 4 affidavit shared with McKnight's Senior Living. The government believes that California Investment Immigration Fund used the money, however, to buy nine homes, including five that cost more than $1 million each, and two vacant lots, and that “no real construction actually took place at any of the proposed project locations.”

The focus of Grassley's April 20 letter to Kelly, however, was on the fugitives who were able to obtain visas through the company.

“It's alarming that this information was not discovered before these individuals were permitted to enter the United States,” he wrote. “Unfortunately, this is not the first time criminals have been discovered using the EB-5 program to enter the United States.”

Among other questions and requests for information, Grassley asked Kelly whether U.S. Immigration and Customs Enforcement knows how many fugitives gained green cards through their association with California Investment Immigration Fund, whether their whereabouts are known and whether the government plans to deport them. He gave Kelly until May 4 to respond.

Grassley said the case is proof of national security weakness and the need for long-term reform.

“According to an internal memo, ICE identified seven main areas of program vulnerability with the EB-5 visa program, including use by foreign government agents/espionage, use by terrorist, investment fraud by regional center and investors,” he wrote. “Years later, it's evident that these program vulnerabilities still exist and have not been effectively addressed.”

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