The chair and ranking member of the U.S. House Judiciary Committee has introduced EB-5 reforms in the wake of an alleged fraud in Vermont’s Northeast Kingdom.
The proposed legislation seeks reforms and the re-authorization of the EB-5 Regional Center Program aimed at promoting foreign capital investment and job creation in communities across the United States.
EB-5 is a federal program with state offices which help to administer foreign investment in regional economic development projects.
Sen. Patrick Leahy, D-Vermont, has pressed for reforms in light of the controversy that erupted in the NEK, when federal and state officials in April brought forth allegations of investor misappropriation of more than $200 million in regional EB-5 projects.
“Rampant fraud and abuse within the EB-5 Regional Center program prevents the program from serving its original purpose, which was to create jobs and direct capital to under-served areas starved for investment,” stated Leahy in the announcement about the draft reform legislation. “As I have said before, the program needs to be reformed or it needs to end.”
Leahy said, “Importantly, the House proposal includes additional reforms that I suggested to require transparency and promote accountability in the use of investor funds. It ensures that investors and the Department of Homeland Security can better track investments and requires a third party to sign off on any expenditures.”
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