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

[Brian4Liberty]

San Gabriel Valley raids target scammers who helped wealthy Chinese get U.S. visas, feds say (http://www.latimes.com/local/lanow/la-me-ln-green-card-fraud-20170405-story.html)
By Joel Rubin and Cindy Chang - April, 5 2017


After years of sleuthing, federal agents Wednesday raided San Gabriel Valley homes and an office that investigators have linked to an alleged multimillion-dollar immigration and finance scam that allowed wealthy Chinese investors to obtain U.S. residency.

The suspects in the case are accused of collecting $50 million from scores of Chinese nationals, who were granted permission to live in the United States in exchange for investing the money in development projects that authorities say never occurred.

The money, investigators claim in court records, fueled a luxurious life of multimillion-dollar homes and high-priced cars for the alleged masterminds of the scheme — Victoria Chan, an attorney; Tat Chan, her father; and Fang Zeng, the father’s friend.

The raids come as money has poured into the San Gabriel Valley in recent years from China, causing home values to soar and fueling a boom in upscale development catering to wealthy visitors from the mainland.

Investigators said Wednesday’s searches targeted a scheme that exploited a little-known type of immigration visa reserved for high-end investors that has been beset by poor oversight and claims of fraud.

Each year, the government issues thousands of temporary residence visas through its Immigrant Investor Program. To qualify for the visas, immigrants must typically invest at least $1 million into a U.S. business venture, but the amount required is cut by half if an investment project is located in an area of high unemployment and is designed to create full-time jobs. If a project ultimately meets the visa program’s requirements, the investors are granted permanent legal residence in the U.S.
...
Some of the investors, for example, are on a Chinese government list of most-wanted fugitives, accused of bribery and other crimes, according to the affidavit. Others did not invest their own money but allegedly used funds loaned to them from the suspects’ investment fund.

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 citizens. After issuing only 350 of the visas in 2005, the government granted 9,500 of them in 2015, and 85% of those went to Chinese people, the affidavit said.
...
More: http://www.latimes.com/local/lanow/la-me-ln-green-card-fraud-20170405-story.html

[Brian4Liberty]

Wealthy Chinese buyers are a growing force in U.S. real estate markets


After a long and painful slide following the real estate collapse in 2008, Seattle’s property market is enjoying one of the sharpest rises anywhere in the United States. Buoyed by a rapidly expanding economy that has brought tens of thousands of high-paying jobs to the city, real estate values have nearly doubled since 2009, according to the online real estate database Zillow.

Yet while technology billionaires gobble up estates from Puget Sound to Lake Washington, Jim Conlan, a real estate broker with Century 21 North Homes Realty in Seattle, says the real catalyst for the dramatic upswing can be found in China.

“To be honest, Chinese buyers have been flooding this market the past few years,” says Conlan, who has been selling homes in Seattle for more than 30 years. “Some of them buy homes sight unseen, while others travel here for a kind of real estate tourism and buy real estate after only one viewing.”

Seattle is not alone. For the fourth year in a row, buyers from China ranked first among foreign nationals purchasing property in the United States, according to a survey by the National Association of Realtors (NAR). U.S. home sales to Chinese nationals totaled $27.3 billion — exceeding the total dollar sales figure of the next four countries in the rankings combined, the survey showed.

Chinese investment in U.S. real estate could hit $50 billion by 2025, according to a report by the Rosen Consulting Group and the Asia Society.

[China is flooding Silicon Valley with cash. Here’s what can go wrong.]

While the influx of investment from China is lifting some markets, it is reshaping many others, real estate experts say. The torrent of cash is fueling sharply rising prices and dwindling housing supply while keeping homeownership out of reach of first-time buyers in some of the country’s most important real estate markets.

In San Francisco Bay-area locations such as Palo Alto and Woodside, home prices have risen by double digits in the past three years, while the number of buyers from China has nearly doubled since 2012, says Penelope Huang, a broker with Re/Max Distinctive Properties. The increased demand is making the area one of the toughest for younger buyers, she says.

“Listings are snapped up in a week or sometimes less in this market,” she says. “That kind of pace of sales directly affects first-time buyers.”

In New York, where big-spending financiers typically make real estate headlines in Manhattan, Chinese investors are increasingly gobbling up property farther away from the spotlight.

In middle-class areas of Brooklyn and Queens, the number of Chinese buyers has nearly doubled since 2012, estimates Jennifer Hsu, a broker with Halstead Property in Queens. “They’re now competing with buyers at the middle of this market,” she says, “and that added competition is making life tougher for people looking to buy their first home.”

The spending spree is also upending real estate fundamentals in smaller and mid-size markets from Portland, Ore., to Cambridge, Mass., with local would-be buyers increasingly being disconnected from the economies of their own cities.

[The latest destination for China’s billions: U.S. hotels]

Factors that typically influence real estate sales in most places, such as income levels and the strength of local economies, do not mean as much when large numbers of outside buyers from places such as China invade a market, says Nela Richardson, chief economist at national realty brokerage Redfin. “Local fundamentals aren’t necessarily the driving factors when that happens,” Richardson says. “That affects buyers who live in these places and can lead to locals essentially being priced out of their own markets.”
...
More: https://www.washingtonpost.com/realestate/wealthy-chinese-buyers-are-a-growing-force-in-us-real-estate-markets/2016/10/13/15ab3cba-7441-11e6-8149-b8d05321db62_story.html

[juleswin]

I thought the VISA investment program was $250k not $1 million. I have to say what an awesome way to bring in investors into the country. I don't think any country would turn down such a group of people.

[Brian4Liberty]

I thought the VISA investment program was $250k not $1 million. I have to say what an awesome way to bring in investors into the country. I don't think any country would turn down such a group of people.

Except they weren't investing as the program calls for. It is visa fraud.

On the other hand, it's great when US homes are turned into a global commodity.

[juleswin]

Except they weren't investing as the program calls for. It is visa fraud.

On the other hand, it's great when US homes are turned into a global commodity.

The money is in the country, just that the scammers are the ones spending it on I am guessing other american businesses.

Also, I don't really understand why home prices going up is really a bad thing. Current homeowners, construction workers, home building suppliers, tax collectors etc would benefit immensely from such influx of investment money. I really don't see how this is a bad thing.

[twomp]

The money is in the country, just that the scammers are the ones spending it on I am guessing other american businesses.

Also, I don't really understand why home prices going up is really a bad thing. Current homeowners, construction workers, home building suppliers, tax collectors etc would benefit immensely from such influx of investment money. I really don't see how this is a bad thing.

It's bad if you can't afford to own a home and you have to rent from foreigners.

[juleswin]

It's bad if you can't afford to own a home and you have to rent from foreigners.

Are you saying it is a bad thing for outsiders to invest in your economy? I remember stories of rent prices skyrocketing during the Dakota oil boom. I didn't recall anyone complaining about that. Why is it a problem now it is the Chinese creating this boom in housing?

Also he could be renting from a local who refused to sell.

[twomp]

Are you saying it is a bad thing for outsiders to invest in your economy? I remember stories of rent prices skyrocketing during the Dakota oil boom. I didn't recall anyone complaining about that. Why is it a problem now it is the Chinese creating this boom in housing?

Also he could be renting from a local who refused to sell.

You said you see nothing but positives and everyone in the country should be happy about this and I gave you an example of how that isn't so. Who is saying all these things you are saying? Nice shark jumping there.

[timosman]

The money is in the country, just that the scammers are the ones spending it on I am guessing other american businesses.

Also, I don't really understand why home prices going up is really a bad thing. Current homeowners, construction workers, home building suppliers, tax collectors etc would benefit immensely from such influx of investment money. I really don't see how this is a bad thing.

Wait for the inevitable bubble burst. You will be singing a different tune.

[Lindsey]

The money is in the country, just that the scammers are the ones spending it on I am guessing other american businesses.

Also, I don't really understand why home prices going up is really a bad thing. Current homeowners, construction workers, home building suppliers, tax collectors etc would benefit immensely from such influx of investment money. I really don't see how this is a bad thing.

Look into the situation Vancouver, Canada finds itself in and you'll start to realize the downsides.

[RJB]

I would limit VISAs to the poor who will engage in harmless displays of blowback.

[juleswin]

Look into the situation Vancouver, Canada finds itself in and you'll start to realize the downsides.

Tell me more, I just don't understand how having more foreign investment can be a bad thing. I could maybe see how some locals would use this opportunity to take out mortgages on the new house valuation and spend the money only to see their house valuation come down after the market resets again. But that is the fault of the homeowners and not the investors.

State govts put in a lot of effort to attract investment of any kind and I doubt they would do it if it actually harms their economy. Please post me a link of what is going on in Canada so I can read it

[juleswin]

Wait for the inevitable bubble burst. You will be singing a different tune.

Burst or no burst, I don't think i would be changing my mind on this issue. This to me is just econ fundamentals cos I would have to reassess my whole understand of economics if more private investment in the house market is a bad for the economy.

[twomp]

Tell me more, I just don't understand how having more foreign investment can be a bad thing. I could maybe see how some locals would use this opportunity to take out mortgages on the new house valuation and spend the money only to see their house valuation come down after the market resets again. But that is the fault of the homeowners and not the investors.

State govts put in a lot of effort to attract investment of any kind and I doubt they would do it if it actually harms their economy. Please post me a link of what is going on in Canada so I can read it

I guess you consider cities where the people who actually live there can't afford to buy homes is a good thing. Cities where there are thousands of homes owned by foreigners where no one actually lives there.

New census counts 25,502 unoccupied homes in Vancouver, for 15 per cent jump over 2011


The latest census numbers for 2016 show there were 25,502 unoccupied or empty housing units in the City of Vancouver.

That’s 15 per cent higher than recorded during the last census in 2011.

Urban planner Andy Yan of Simon Fraser University’s City Program compared census data for Vancouver over several decades to see how the percentage of “unoccupied” units or ones “occupied solely by foreign residents and/or temporary present residents on Census Day” has doubled during that time. In 1986, it was four percent. In 2016, it rose to 8.2 per cent.

“Exact definitions and measures have changed slightly over 30 years and patterns should be interpreted as directional,” Yan writes in a report, also released Wednesday.

For Vancouver, the direction is up. The city far outstrips other municipalities with 25,502 units that are unoccupied or owned by temporary or foreign residents. Yan said most of these were concentrated in three areas: Coal Harbour, Marine Gateway and Joyce-Collingwood. Surrey came in second at 11,195, Burnaby at 5,829 and Richmond at 4,021.


The number of unoccupied units or ones occupied by temporary or foreign residents increased 25 per cent in Richmond between the 2011 and 2016 census and by 28 per cent in Burnaby.

However, some of the widest percentage jumps occurred between the 2001 and 2006 census.

http://vancouversun.com/news/local-news/census-counts-25502-unoccupied-homes-in-vancouver-more-than-double-the-estimate-by-city-hall

[oyarde]

I see no reason at all for this Visa program . If you want to invest , invest . It should not get you a special visa and of course this program would be filled with fraud which would be the purpose of it .

[timosman]

Burst or no burst, I don't think i would be changing my mind on this issue. This to me is just econ fundamentals cos I would have to reassess my whole understand of economics if more private investment in the house market is a bad for the economy.

Are you familiar with the concept of market overheating? This is really bad for markets with very little liquidity. When the external forces create money out of thin air all kind of distortions can take place. Check https://en.wikipedia.org/wiki/Malinvestment

[juleswin]

I guess you consider cities where the people who actually live there can't afford to buy homes is a good thing. Cities where there are thousands of homes owned by foreigners where no one actually lives there.

New census counts 25,502 unoccupied homes in Vancouver, for 15 per cent jump over 2011



http://vancouversun.com/news/local-news/census-counts-25502-unoccupied-homes-in-vancouver-more-than-double-the-estimate-by-city-hall

But why is it bad for the community to have 15% of the homes unoccupied year round? I didn't get the impression it was abandoned? it just says they were unoccupied which I read as it maybe a vacation home or house used sparingly throughout the year.

I am still waiting to hear why this is bad.

[timosman]

I see no reason at all for this Visa program . If you want to invest , invest . It should not get you a special visa and of course this program would be filled with fraud which would be the purpose of it .

You do not realize but being an American has all kinds of privileges on this planet. This is why it is coveted so much and people are willing to pay all kinds of premiums for it. Being a sheeple on the inside does not expose you to the mechanics of this.

[twomp]

But why is it bad for the community to have 15% of the homes unoccupied year round? I didn't get the impression it was abandoned? it just says they were unoccupied which I read as it maybe a vacation home or house used sparingly throughout the year.

I am still waiting to hear why this is bad.

Why is it good for the community to have foreigners drive up the home prices in their cities to the point where they themselves can't afford it. Having empty homes means the local businesses have less customers does it not? Does the community somehow benefit from this? The bankers benefit. The home builders benefit? If it is such a great deal, why not have the Federal Reserve do the same thing? Print up some money then build some houses!! Oh wait, already tried that.

[juleswin]

I see no reason at all for this Visa program . If you want to invest , invest . It should not get you a special visa and of course this program would be filled with fraud which would be the purpose of it .

The govt is using the residency cards as a commodity to make some money for local communities. Why is that bad? would you rather refer that the govt gave out the residency cards for free or they put a financial requirement to invest in the local economy in order to get it? or maybe not give it out at all?

It is also not filled with fraud, the applicants actually invested the money, the only problem is that the agency working with the foreigners misappropriated the funds. Btw, most people who use this for of VISA program just do it with banks where there is little or no fraud.

[timosman]

Btw, most people who use this for of VISA program just do it with banks where there is little or no fraud.

http://dailypicksandflicks.com/wp-content/uploads/2012/09/girl-and-horse-laughing.jpg

[Brian4Liberty]

The govt is using the residency cards as a commodity to make some money for local communities. Why is that bad? would you rather refer that the govt gave out the residency cards for free or they put a financial requirement to invest in the local economy in order to get it? or maybe not give it out at all?

It is also not filled with fraud, the applicants actually invested the money, the only problem is that the agency working with the foreigners misappropriated the funds. Btw, most people who use this for of VISA program just do it with banks where there is little or no fraud.

If you read the full story, you will see it was a fraud all the way around. The visa seeking "investors" expected to get their money back, and many of them did. The people arrested were taking a cut and basically running a pyramid scheme.


About 30 of the investors received some or all their money back — amounting to about $10 million — but concealed the refunds from U.S. officials and have continued to pursue legal permanent residence in the country, agents found.

In June, investigators sent an undercover informant into the office to meet with Victoria Chan. Posing as a representative of an interested investor and wearing a concealed recorder, the informant was charged $200 before he was allowed to see Chan, who told him a $500,000 investment would be returned within five years, the affidavit said.

[juleswin]

Are you familiar with the concept of market overheating? This is really bad for markets with very little liquidity. When the external forces create money out of thin air all kind of distortions can take place. Check https://en.wikipedia.org/wiki/Malinvestment

Nobody is creating money out of thin air. It is real money attained through hard word and not the printing press coming to your community to shower your home owning community with riches. Even if they over heat the housing market, the people overheating it are the first to lose out when the market cools down. Again, all the upside is with the community and the downside with the foreigners.

I say you take the money and run like crazy


You do not realize but being an American has all kinds of privileges on this planet. This is why it is coveted so much and people are willing to pay all kinds of premiums for it. Being a sheeple on the inside does not expose you to the mechanics of this.

Green card/permanent residency cards is not the same thing as being a US citizen. You can join the army, get a drivers license etc with it but you cannot sign up for student loads, vote, sign up for medicaid etc with it. It just a glorified VISA

[timosman]

Nobody is creating money out of thin air. It is real money attained through hard word and not the printing press coming to your community to shower your home owning community with riches. Even if they over heat the housing market, the people overheating it are the first to lose out when the market cools down. Again, all the upside is with the community and the downside with the foreigners.

I say you take the money and run like crazy

Run where? Zimbabwe? You are talking about timing the market which is impossible given the forces involved.



Green card/permanent residency cards is not the same thing as being a US citizen. You can join the army, get a drivers license etc with it but you cannot sign up for student loads, vote, sign up for medicaid etc with it. It just a glorified VISA

This just shows your ignorance. After holding the permanent residency status for 5 years you are automatically qualified for citizenship. You can also start popping babies and in 18 years your child will be able to sponsor you. ;)

[juleswin]

If you read the full story, you will see it was a fraud all the way around. The visa seeking "investors" expected to get their money back, and many of them did. The people arrested were taking a cut and basically running a pyramid scheme.

Well, that is not the way I understand the program. My understanding is that you can sell the property/investment after a while not sure the time limt. I don't think the govt forces you to hold onto the investment forever as part of the deal but maybe I am wrong.

[Brian4Liberty]

But why is it bad for the community to have 15% of the homes unoccupied year round? I didn't get the impression it was abandoned? it just says they were unoccupied which I read as it maybe a vacation home or house used sparingly throughout the year.

I am still waiting to hear why this is bad.

Why is it bad to have homeless people who can't afford to rent, and working people who can't afford to buy? People who grew up there?

Oh wait, government will step in and take care of them. You're right, no problem.

[juleswin]

Run where? Zimbabwe? You are talking about timing the market which is impossible given the forces involved.




This just shows your ignorance. After holding the permanent residency status for 5 years you are automatically qualified for citizenship. You can also start popping babies and in 18 years your child will be able to sponsor you. ;)

I can assure you that most people who can afford to put 500k aside for 5 yrs are not interested in the social benefits of the US. They want the green card for access it gives them. Also remember when you become a citizen, you have to start filling and paying US income taxes even on income and investment made outside the US. Also another wrinkle with the green card situation is that if you stay in the country for a certain number of days, you would be eligible to file for taxes in the US. That is probably one reason why the properties are vacant most of the year

[juleswin]

Why is it bad to have homeless people who can't afford to rent, and working people who can't afford to buy? People who grew up there?

Oh wait, government will step in and take care of them. You're right, no problem.

No, the market would create more housing, people would move around and they would all be ok. You don't need the govt to fix the problem caused by a rising tide. It will lift all the boats in one way or another :)

[timosman]

I can assure you that most people who can afford to put 500k aside for 5 yrs are not interested in the social benefits of the US. They want the green card for access it gives them. Also remember when you become a citizen, you have to start filling and paying US income taxes even on income and investment made outside the US. Also another wrinkle with the green card situation is that if you stay in the country for a certain number of days, you would be eligible to file for taxes in the US. That is probably one reason why the properties are vacant most of the year

330 days out of the country per year and you do not have to pay income taxes even if you are a citizen. Any other wrinkles?:cool:

[juleswin]

Why is it good for the community to have foreigners drive up the home prices in their cities to the point where they themselves can't afford it. Having empty homes means the local businesses have less customers does it not? Does the community somehow benefit from this? The bankers benefit. The home builders benefit? If it is such a great deal, why not have the Federal Reserve do the same thing? Print up some money then build some houses!! Oh wait, already tried that.

This is very bizarre, you never hear this argument made for any other form of investment. You don't hear people say "the Chinese are coming to build more factories to create more jobs in our community. This is bad because it would make it harder for locals mom and pop store to hire the workers on a bid up salary". Everybody knows that it is good for the community.

for the foreigners to drive prices up, the locals would be the beneficiaries of said money, just about every cents of it would go to locals. More money coming into a community is never a bad thing, the time to worry is when nobody is bring capital in.

[timosman]

This is very bizarre, you never hear this argument made for any other form of investment. You don't hear people say "the Chinese are coming to build more factories to create more jobs in our community. This is bad because it would make it harder for locals mom and pop store to hire the workers on a bid up salary". Everybody knows that it is good for the community.

for the foreigners to drive prices up, the locals would be the beneficiaries of said money, just about every cents of it would go to locals. More money coming into a community is never a bad thing, the time to worry is when nobody is bring capital in.

Do you work for the Federal Reserve?:confused:

[twomp]

This is very bizarre, you never hear this argument made for any other form of investment. You don't hear people say "the Chinese are coming to build more factories to create more jobs in our community. This is bad because it would make it harder for locals mom and pop store to hire the workers on a bid up salary". Everybody knows that it is good for the community.

for the foreigners to drive prices up, the locals would be the beneficiaries of said money, just about every cents of it would go to locals. More money coming into a community is never a bad thing, the time to worry is when nobody is bring capital in.

When you drive up house prices yet the wage of the community living there doesn't go up, there is a problem. Perhaps if there were people living in those homes who would then go around the community buying groceries, going to movies, drinking at bars, then I would agree with you. If what you are saying is beneficial, why do we need foreigners to do it? Why not just have the Federal Reserve print up money and buy houses?

[Brian4Liberty]

No, the market would create more housing, people would move around and they would all be ok. You don't need the govt to fix the problem caused by a rising tide. It will lift all the boats in one way or another :)

Only in FantasyLand. In the real world, you have both homeless people and massive government involvement.

[timosman]

Only in FantasyLand. In the real world, you have both homeless people and massive government involvement.

Rent control! Affordable housing! What do we do? The prices are going through the roof. We need to do something. OMG. OMFG.:eek:

[oyarde]

Again , I see no reason for this program and no reason to support it .

[Brian4Liberty]

I can assure you that most people who can afford to put 500k aside for 5 yrs are not interested in the social benefits of the US.

And I can assure that is not always the case. There are many people who come to the US and sign up for benefits when they already have 500k or more. And they can also reap the benefits of all of the other public spending.


This is very bizarre, you never hear this argument made for any other form of investment.

The argument is often made when it comes to human essentials. For example, when the price of corn was driven up due to speculation on methanol, there were complaints.

[juleswin]

And I can assure that is not always the case. There are many people who come to the US and sign up for benefits when they already have 500k or more. And they can also reap the benefits of all of the other public spending.



The argument is often made when it comes to human essentials. For example, when the price of corn was driven up due to speculation on methanol, there were complaints.

Ofc there are exceptions to every rule.

And yea the whining about speculation usually comes from liberals who don't know anything about economics. If you wrongly speculate and buy up bid up commodities on false information, you would lose your pants when the correction happens.

[Brian4Liberty]

Ofc there are exceptions to every rule.

And yea the whining about speculation usually comes from liberals who don't know anything about economics. If you wrongly speculate and buy up bid up commodities on false information, you would lose your pants when the correction happens.

The concern is more about the poor people who lose the food off their table rather than the speculators losing money.

[Brian4Liberty]

Rent control! Affordable housing! What do we do? The prices are going through the roof. We need to do something. OMG. OMFG.:eek:

You forgot minimum wage, EBT, welfare and all of the other "solutions" proposed to offset abnormal market distortions.

[timosman]

You forgot minimum wage, EBT, welfare and all of the other "solutions" proposed to offset abnormal market distortions.

All very good points. We need to start working on those ASAP. I am up for reelection next year.

[juleswin]

The concern is more about the poor people who lose the food off their table rather than the speculators losing money.

If the traders guess wrongly on their speculation and overpay for a commodity, the would poor would benefit when the price swings back during a correction. The only people losing in the long terms are the ones who wrongfully speculated.

[timosman]

If the traders guess wrongly on their speculation and overpay for a commodity, the would poor would benefit when the price swings back during a correction. The only people losing in the long terms are the ones who wrongfully speculated.

This is why this kind of libertarians are not that popular. Everybody should be smart! If this was the case we would not need libertarians, would we?

Fucking with the markets should be discouraged.

[eleganz]

Except they weren't investing as the program calls for. It is visa fraud.

On the other hand, it's great when US homes are turned into a global commodity.

In higher unemployment areas its 500k and in lower unemployment its 1M per investment.

This is not for investing in homes, its investing in businesses, there are requirements like employing 10 people.

The Chinese are themselves investing in homes because they think its a safe place to park their money in an unstable China.

[timosman]

In higher unemployment areas its 500k and in lower unemployment its 1M per investment.

This is not for investing in homes, its investing in businesses, there are requirements like employing 10 people.

The Chinese are themselves investing in homes because they think its a safe place to park their money in an unstable China.

Fuck the unstable China. This is a make believe shit. You do not see many Indians doing this. The Chinese economy is way stronger than India. They should not be looking there for an excuse.