"OverDue" Diligence in the Aftermath of SEC Complaint

by Joseph Whalen

Ever since the SEC (Securities and Exchange Commission) filed that complaint against a Chicago-based Regional Center (IRCTC), its crooked principal and pretend developer (Anshoo Sethi); everybody involved in EB-5 is acting like they never heard of something called "Due Diligence". To that I say, bullcrap! Any and every investor is obligated to perform some degree of their own due diligence; it is a concept that goes back hundreds of year, perhaps longer. Caveat emptor (buyer beware) is an ancient concept but is much like due diligence only by another name. As for the EB-5 community, you should have been on high alert at least since the Mamtek sucralose debacle; another case highlighting lack of due diligence! For shame!

Incidentally, IRCTC stands for (of all things) Intercontinental Regional Center TRUST of Chicago, LLC!!! I know and you know that a Trust is financial mechanism but just the same, Be Careful Whom You Trust with your one-half or full million dollar investment. Had some due diligence been done, such as a site visit to the supposed location worth $177 million that the "Regional Center" was contributing; a visit to whichever government agency that had supposedly issued permits in order to verify them; or contacting the major hotel chains to verify their commitment; this could have been stopped dead in its tracks. I will admit that hindsight has always been 20/20 however; recent event should have had folks on high alert. In my teachings, I have always stressed the concepts underlying due diligence.

I am proud to say that I have become part of a group that will be vetting and rating Regional Center Projects by performing various Risk Analysis and Due Diligence tasks from a wide variety of points of view. We are still under development but keep your eyes open at www.EB5M.com.

About The Author

Joseph Whalen is not an attorney. He is a former government employee who is familiar with the INA. His education is in Anthroplogy with a concentration in Archaeology and has both a BA (from SUNY Buffalo) and an MA (from San Francisco State University) in Anthroplogogy. He previously worked as an Archaeologist for the U.S. Forest Service before becoming an Adjudicator with INS which became USCIS.

The opinions expressed in this article are those of the author(s) alone and should not be imputed to ILW.COM.