Fintech Sale Triggers EB-5 Visa Fraud Lawsuit in Newark

Fintech Acquisition in Newark Leads to EB-5 Visa Fraud Allegations

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Details of the Lawsuit

Plaintiff’s Allegations

Yash Kamat asserts that League Network misrepresented its financial stability and job creation plans when he made his EB-5 investment. The company’s sale to Alliance Reentry Centers, Kamat alleges, led to layoffs that violated the EB-5 program's core requirement of creating or preserving 10 full-time U.S. jobs for each investor. Kamat, who is on an H-1B visa, claims that the transaction "subtracted at least two jobs from Newark" rather than generating the mandated employment.

Legal Stakes

If successful, Kamat’s lawsuit could set a significant precedent in holding businesses accountable for post-investment actions, such as mergers, sales, and layoffs, that undermine the terms of EB-5 eligibility. At the heart of the case is Kamat's conditional Green Card, which depends on proving that his investment met the job creation criteria of the EB-5 program.

Defense Posture

League Network has yet to comment on the case publicly. However, legal experts speculate that the outcome may hinge on whether the job losses occurred before or after Kamat’s I-829 petition, which seeks to remove conditions from his Green Card. The case will test how the EB-5 program applies to corporate restructuring and whether such actions affect visa eligibility.

Implications of the Case

Investor Due Diligence

This lawsuit underscores the risks for EB-5 applicants relying on regional centers to ensure compliance with job creation requirements. Reputable regional centers, such as American Life, emphasize the importance of transparency, often utilizing third-party audits to verify job creation claims and provide investors with greater confidence. As of 2024, American Life has secured over 8,000 EB-5 visas and consistently meets job creation standards.

USCIS Scrutiny

The U.S. Citizenship and Immigration Services (USCIS) has ramped up enforcement under the RIA, requiring detailed business plans and job creation timelines for all EB-5 projects. Non-compliant projects risk visa denials and further litigation. As part of its commitment to combating fraud, USCIS has stepped up audits, examining the financial and employment outcomes of regional center projects.

Political Fallout

The case has emerged at a time when Senate hearings are intensifying scrutiny of the EB-5 program. Lawmakers are grappling with the ongoing debate over the risks of "citizenship for sale" and the need for stricter accountability measures to prevent fraud and abuse within the investor visa system.

Regulatory Oversight and Future Considerations

The U.S. Citizenship and Immigration Services (USCIS) has been under scrutiny for its oversight of the EB-5 program, particularly concerning job creation requirements. The agency has implemented measures to enhance compliance, including the Reform and Integrity Act of 2022, which introduced stricter regulations for regional centers and investment projects. However, challenges persist in ensuring that all stakeholders adhere to these standards.

Final Thoughts

The ongoing lawsuit against League Network highlights the critical need for robust oversight and accountability within the EB-5 program. As the case progresses, it may prompt a reevaluation of existing policies and practices to safeguard the integrity of the investor visa system.

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Fintech Sale Triggers EB-5 Visa Fraud Lawsuit in Newark