San Gabriel Valley raids target scammers who helped wealthy Chinese get U.S. visas, feds say

Joel Rubin and Cindy Chang Contact Reporters

Immigration and FBI agents Wednesday raided the San Gabriel Valley homes and offices of people targeted in a large-scale visa and financial fraud investigation.

The suspects are believed to have collected as much as $50 million in bogus investments from dozens of Chinese people who were granted permission to live in the United States in exchange for the money.

Teams of federal agents served search warrants on properties tied to three suspects, all Chinese nationals, who investigators believe ran a scam involving a little-known type of immigration visa reserved for high-end investors.

Each year, the government issues thousands of visas through its Immigrant Investor Program. To qualify for the visas, immigrants must invest at least $500,000 into new or struggling business ventures in the U.S. that are designed to create jobs. If a project ultimately meets the visa program’s requirements, the investors are granted permanent legal residence in the U.S.

The suspects in the investigation are thought to have solicited the half-million dollar ante from 100 Chinese nationals and submitted plans to federal officials for several development projects that didn’t exist.

Visa program for wealthy investors maxed out by Chinese demand

With the raids Wednesday, during which computers, banking records and other documents related to the alleged scheme are expected to be confiscated, investigators hope to begin to untangle the complicated case. They have yet to determine how many of the Chinese investors were complicit or victims in the alleged fraud, how much money ring leaders actually raised and what has happened to the money.

The three suspects thought to be running the scheme are believed to have refunded the money to some investors after taking a hefty cut or to have stolen it outright, according to an affidavit agents submitted to a judge who granted the search warrants.

Three of the alleged investors are fugitives from China, according to the affidavit.

Interest in obtaining EB-5 visas, as they are known, has taken off in recent years, in large part because of demand from wealthy Chinese. In 2014, an estimated 85% of the EB-5 funds came from China, where concerns about the country's environmental and economic health have led many wealthy families to consider migration.

Concerns over poor oversight and some highly publicized scams led the North American Securities Administrators Assn., an advocacy group, to label EB-5-related fraud as one of the top new threats to investors.