This article is the fifth and final part of our “Facing the EB-5 Challenge” series, which shares practical, experience-based insights for investors seeking U.S. permanent residency through the EB-5 Immigrant Investor Program. Having worked directly with EB-5 investors and regional centers, having examined hundreds of projects, timelines, and outcomes, one lesson stands out:
Picking the right EB-5 project is more critical than perfect paperwork. Even the ideal source-of-funds package cannot save an investor from financial loss, denials, delays, and long-term immigration setbacks if the underlying project is wrong.
The following are the top risks we see most often, along with safeguard initiatives investors should insist on.
1) Fraudulent Projects and Misrepresentation
Red flags include exaggerated or falsified:
• Projections of job creation
• USCIS compliance claims
• Construction timelines
• Financial stability
Things to check before investing
- Active designation from USCIS for the regional center through Form I-956, as well as proof that it complies with the RIA. (USCIS+1)
- Approval from USCIS for the project offering, that is Form I-956F, or clear proof of filing; understand what constitutes “approvals” in reality. USCIS
- Independent job-creation analysis, not just marketing decks.
- An operating or completed business vs. purely future projections.
Example (Sponsor-provided figures)
Canopy by Hilton – Minneapolis Mill District reports USCIS regional centre authorisation through its sponsor, the completion and operation of the hotel, and surplus job creation. The sponsor cites 616+ jobs created vs. fewer required. Treat these as sponsor-provided until independently corroborated.
Why this matters: The RIA gives USCIS the authority to audit regional centers at least once every five years and to sanction bad actors, which makes verifiable compliance and documentation more critical than ever. USCIS+2USCIS+2
2) Mismanagement of Funds
Not all failures are fraud. Many projects falter because capital is diverted or used in ways that don’t create EB-5-qualifying jobs.
Safeguards
- Independent escrow and third-party fund administration
- A transparent capital stack showing exactly where EB-5 sits
- Collateral or other security, where available under the structure
- Regular, auditable financial reporting
Example (sponsor-provided figures)
The Canopy by Hilton: Minneapolis Mill District page describes a $61.35 capital stack with government tax credits and states that EB-5 capital is secured by collateral from the sponsor group; oversight is defined as including escrow/third-party monitoring. Treat these claims as sponsor-provided unless you review the executed agreements and third-party reports. internationalcreativecapital.com
3) Unapproved or Non-Compliant Regional Centers
Some entities promote EB-5 “regional centers” despite:
- No designation by USCIS
- Lapsed filings/compliance
- Limited or no approval history
What to demand
- Verification of an active USCIS regional-center designation via Form I-956 (post-RIA) and required annual filings and Integrity Fund fees, when applicable. USCIS+2USCIS+2
- Records of audits/site visits and any previous investor approvals, if any, related to the project. Until recently, USCIS audited every designated regional center at least once every five years. The new USCIS
Note: USCIS reports hundreds of approved regional centers nationwide, but being “approved” does not mean a project is low risk. Diligence is still essential. USCIS
4. Lack of Transparency
Low-quality offerings mask:
- Financial statements
- Credible job counts
- Status of construction and change orders
- Timeline risks and delays
Insist on
- Quarterly investor updates
- Audited or review-level financials
- Clear evidence of job creation: economic reports, payroll, invoices, COs
- Evidence of USCIS filings/approvals related to the project (I-956F, etc.) USCIS
On concurrent filing (for U.S.-based investors)
Specifically, if a visa number is available, certain EB-5 investors in the U.S. may file the I-485, green card application, together with the I-526E, the investor petition, and request an EAD/AP. However, processing times vary, and there is no guaranteed 60–90-day timeline. USCIS+1
5) Economic & Market Risks
Even well-intentioned projects can fail if they:
- Cannot complete construction
- Fail to generate sufficient revenue
- Fail to create jobs
How to reduce this risk
- Prefer completed/operating assets where possible
- Ask for better locations with established demand
- Seek capital stacks that are not overly dependent on EB-5 fundraising
Example (figures provided by sponsor)
The Canopy by Hilton: Minneapolis Mill District is open and operating in downtown Minneapolis near major venues; the sponsor reports jobs already created (not projected). As with any sponsor statement, verify via third-party reports and filed evidence. internationalcreativecapital.com
How EB-5 Investors Can Protect Themselves
While EB-5 requires capital to be “at risk,” investors should not tolerate unnecessary risk.
Prioritize projects with:
- Completed construction or demonstrably near-term operations
- Verified job creation and conservative TEA/economic assumptions
- Third-party fund control and clear disbursement conditions
- Documented USCIS compliance: I-956 for RC; I-956F for the offering; timely I-956G USCIS+2USCIS+2
- Transparent, periodic reporting, secondments, and finances
- Sensible collateral/credit enhancements, where the structure allows
Example Summary (sponsor-provided): Canopy by Hilton – Minneapolis Mill District
- Regional-center authorization; project completed and operating
- Sponsor-reported 616+ jobs created above requirements
- Collateral protections and structured oversight are described
Reports of recent investor approvals are generally available in the post-RIA environment, including case reports with sub-12-month I-526E approvals; however, timelines vary by case and are not guaranteed. internationalcreativecapital.com+1
Final Thoughts
EB-5 fraud, misrepresentation, and mismanagement do occur, but are avoidable with disciplined diligence under the strengthened RIA framework: audits, integrity fund, and sanctions.
Before investing, ask:
- Has the project already created jobs? If so, can you review the documentation?
- The regional center is actively designated and RIA-compliant, including I-956/I-956G audits and integrity fund fees. USCIS+1
- How are investor funds protected and monitored—through escrow, third-party administration, or controls?
- Are prior USCIS approvals relevant to this project verifiable?
- Does the pro forma rely on aggressive fundraising or speculative projections?
EB-5 can be life-changing. With the proper diligence and the right project, families can pursue permanent residency while protecting capital.
Top 5 EB-5 FAQs
How can I tell whether an EB-5 project is safe?
A safer project generally has:
• Construction completed
• Jobs already created and documented
• Third-party fund administration
• Compliance by USCIS under the Reform & Integrity Act
The risk is higher when a project relies heavily on future fundraising or construction.
2. Can an EB-5 project be USCIS-approved yet still fail?
Yes. That approval means it has satisfied USCIS’s compliance requirements. USCIS may approve a project, yet it can be a money loser or fail to create jobs, so job-creation evidence and financial due diligence are critical.
3. Does investing in a TEA make my EB-5 safer?
No. TEA status only reduces the minimum investment amount to $800,000. The risk is all about job creation, construction progress, capital structure, and developer experience, not about TEA location.
4. Do completed or operating projects reduce my risk?
Yes, significantly.
If the project has already been constructed, is providing income, and has records of new jobs created, the investor will not depend on future construction or speculation. This is one of the most effective ways to reduce EB-5 risk.
5. What are some things I should ask before selecting an EB-5 project?
Ask for:
• Evidence of new jobs being created
• Meeting USCIS regional center standards
• Securities held by an escrow or a third party
• Reports on finances and updates every three months
• Proof of getting the investor’s consent
If a developer refuses to provide these documents, consider it a warning sign.