A federal program promised to bring foreign investment to remote parts of the country. It soon became rife with fraud. Sheelah Kolhatkar reports.

"The idea behind the EB-5 program was that visa-seeking foreigners might be more willing to pour money into low-income areas than domestic investors. After the program was signed into law, in 1990, ten thousand green cards were set aside each year for people willing to invest. Doug Bereuter, then a Republican congressman, framed the law as a violation of American values, noting that he was saddened to learn that American citizenship was “for sale to the highest bidder.” But the arrangement also had its fans. “The EB-5 program, in a nutshell, is a job-creation program,” Matt Gordon, who runs the E3 Investment Group, which advises foreign...

A federal program promised to bring foreign investment to remote parts of the country. It soon became rife with fraud. Sheelah Kolhatkar reports.

"The idea behind the EB-5 program was that visa-seeking foreigners might be more willing to pour money into low-income areas than domestic investors. After the program was signed into law, in 1990, ten thousand green cards were set aside each year for people willing to invest. Doug Bereuter, then a Republican congressman, framed the law as a violation of American values, noting that he was saddened to learn that American citizenship was “for sale to the highest bidder.” But the arrangement also had its fans. “The EB-5 program, in a nutshell, is a job-creation program,” Matt Gordon, who runs the E3 Investment Group, which advises foreign investors, told me. “You have wonderful people who are immigrating to America, and they’re investing their capital with U.S. entrepreneurs.”

In the first decades of the program, a tiny fraction of the visas were used. But, over the years, a few changes made it more attractive. Congress allowed for pooled investments—the combining of funds to finance larger, potentially more lucrative developments..."