EB-5’s WeChat wars Chinese investors are taking to the messaging app to organize. But misinformation runs rampant
EB-5 projects 702 Seventh Avenue and The Wheel (Credit: iStock)
Not long after developers pulled the plug on the $900 million New York Wheel – the biggest EB5-backed project ever to go belly-up – a group on the popular Chinese messaging app WeChat lit up over the possible ramifications for investors.
When the planned 630-foot-tall Ferris wheel project went bankrupt in October, a $206 million loan, made through the regional center CanAm Enterprises, appeared to have been wiped out. But the question of whether the Wheel had created enough jobs to secure visas for the EB-5 investors remained.
“The money is doubtful, but there s still hope for green cards via litigation,” wrote chat member Yujin CMB 54 2016.9.29, who does not appear to be one of the NY Wheel EB5 investors. (In order to establish trust, many investor chatrooms request that users create an alias containing their project name and application date.)
Another chat member, Jenny 555TEN 2015.11, put it more bluntly.
“It s time to sue.”
The Wheel’s EB-5 investors — who it appears have not filed a lawsuit — are in a now-familiar predicament. A visa backlog at the United States Citizenship and Immigration Services and some high-profile instances of alleged fraud have led to a spike in litigation surrounding the contro爱上海同城论坛 versial “cash-for-visa” program, which for years has supplied major U.S. developers with billions of dollars in cheap debt. Frustrated investors in China, sitting thousands of miles away from the projects and facing a gulf of information just as wide, are taking to WeChat to discuss the myriad twists and turns of the program, air grievances, and, in some cases, band together to discuss their legal options.
Though the closed nature of WeChat groups makes it difficult to get a full picture of EB-5-related activity, WeChat group administrators contacted by The Real Deal estimate that there are hundreds of such groups in total. Many are dedicated to specific projects and agencies, while others host general discussions on EB-5 topics such as the visa backlog, redeployment of funds, and lobbying.
“Since investors can’t find a legal way to ask regional centers or agents for a list of other investors to contact, they have to use WeChat to get connected,” said Connor Chen, founder of popular EB-5 blog EB5Sir, noting that these intermediaries have little incentive to help investors organize.
Find your tribe
For investors trying to make sense of troubled projects, WeChat is a means of tracking down co-investors, with an eye to taking a stronger and more well-funded case to court.
“The WeChat thing is the investors now organizing to sue the regional centers,” said Michael Gibson of USAdvisors, which works with EB-5 applicants to determine where to invest.
“The investors typically don’t know who else is involved in the investment, so they put together these investment groups on WeChat w[……]