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Johnny Depp’s Sister and Friends Dragged Into Dispute With Ex …

Johnny Depp’s sister, his assistant, and several friends are being dragged into the actor’s bitter legal feud with his former management company.

Depp sued the Management Group (TMG) in January, alleging that the firm mismanaged his finances and made nearly $10 million in unauthorized loans. In an amended cross-complaint filed on Tuesday, TMG alleges that the loans were approved and that they went to Depp’s close associates.

TMG adds each of the members of Depp’s circle as cross-defendants, essentially arguing that if he wants repayment he should seek it from them.


A Kentucky Horse Farm Owned by Johnny Depp Heads to Auction

“Depp’s closest friends, family, and colleagues who have been added as new Cross-Defendants in this action have only Depp to blame for their involvement in this charade,” the cross-complaint states.

According to the filing, Depp loaned his sister, Christi Dembrowski, $7.1 million over the course of 17 years. The suit states that Depp and Dembrowski agreed that she would be compensated through informal loans, that he has not asked her to return any of the money, and that she remains president of his production company, which recently entered a first-look deal with IM Global.

“It is absurd that Depp would trust his sister to oversee this important joint venture if he sincerely believed that she had actually accepted and signed for over $7 million in unauthorized payments,” the cross-complaint states.

The filing lays out several additional loans, all of which it states were initiated and approved by Depp: $199,000 to his nephew, Bill Rassel, to help buy a house in Kentucky; $737,000 to his assistant, Nathan Holmes, to buy and renovate a house in the United Kingdom; $412,000 to actor Jimmy Russo, to help him avoid foreclosure; $262,000 to tattoo artist Jonathan Shaw, to defend him from criminal weapons charges; and $237,000 to actor Sal Genco, to help him through a costly divorce.

The cross-complaint also names Depp’s closest childhood friend, Bruce Witkin, as a defendant. It alleges that Depp invested more than $4 million in a music label run by Witkin, which did not generate revenues, until TMG finally persuaded him to stop. Depp now alleges that he never authorized the investment, according to the filing.

TMG is seeking repayment of a $4.2 million loan to Depp, in addition to several hundred thousand dollars in unpaid fees. TMG commenced non-judicial foreclosure proceedings against one of Depp’s properties in 2016, which the company alleges caused Depp to concoct false allegations.

“Depp does not want to repay his debts to TMG. Depp’s objective in filing this action are transparent and designed to falsely stave off the foreclosure of Depp’s real properties in Los Angeles,” the cross-complaint states. “Depp should be ashamed of the ridiculous, false and baseless positions he is taking in this action.”

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HUD Secretary Ben Carson helps open a North Philly high school

U.S. Housing and Urban Development Secretary Ben Carson, in town to help open a new Philadelphia school, said Tuesday that the partnership that made Vaux Big Picture High School possible ought to be replicated across the country.

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The school represents an unusual partnership between the Philadelphia Housing Authority, the Philadelphia School District, and Big Picture Philadelphia, a nonprofit education provider hired to run Vaux.

Carson said the Vaux concept — with its public-private partnerships — was the way to go, rather than the old model of the government coming in “with a big bucket of money,” building a project, then letting it languish. When community partners rely on projects for part of their income, that’s a game changer, Carson said.

“You’re pretty much guaranteed that it’s going to be successful,” said Carson, who also stressed the importance of education in his own rise to prominence. He implored Vaux’s 126 current students — enrollment will eventually grow to 500 — to take advantage of the opportunities in front of them.

“People who are well-educated are very difficult to manipulate and to control,” said Carson, a retired surgeon and former presidential candidate.

Vaux is a public school, with Philadelphia School District students and Philadelphia Federation of Teachers educators. But it operates in a former district building purchased by the Philadelphia Housing Authority after the school system closed the old Vaux in 2013. PHA, as part of its $500 million plan to remake the Sharswood neighborhood, is giving the school system a $500-per-student annual subsidy, and Big Picture is raising additional funds to support its model — small classes, project-based learning, intense supports.

“We will meet students where they are, ask them where they want to be, and give them the tools to get there,” said Superintendent William R. Hite Jr.

Mayor Kenney thanked Carson for the “invaluable federal funding that is making the revitalization of Sharswood possible,” but also underscored the need for “continuing support from our federal partners.” The Trump administration has proposed billions in cuts to the federal housing authority’s budget.

Philadelphia police had a heavy presence at the school, keeping a small group of protesters two blocks away from the HUD secretary.

Protesters said they were concerned about proposed cuts to HUD here in the poorest big city in the country, and called for more affordable housing and responsible development.

“Ben Carson, don’t be a puppet for Donald Trump!” yelled Barry Thompson, vice president of the Philadelphia Tenants Union. He was advocating for a city law that, like HUD’s own rules, would require landlords to evict tenants only with just cause. The proposed cuts, he said, would do “a lot of harm to the city.”

“We have to let Carson know how important affordable housing is,” said Constance Morrow, a board member at the affordable development group Women’s Community Revitalization Project. “The people he’s talking to are the people who run the PHA. He should be talking to real people.”

After a tour of Vaux, Carson traveled to a veterans’ multiservice facility in Center City. Asked in a brief interview there what programs he found most effective in Philadelphia, Carson said he had been particularly struck by the fact that Philadelphia has essentially ended veteran homelessness  — and by the efforts at the high school.

“I was very impressed with Vaux, and the educational concepts — the practical education they can use on the streets,” he said. “PHA is in the process of revitalizing a neighborhood.”

In March, Trump alarmed city officials when he announced $6 billion in cuts to HUD funding; the PHA gets 94 percent of its funding from the federal agency, and the city has used funding from the Community Development Block Grants program, which Trump proposed be cut entirely, to fund small business loans in low-income areas and programs that help residents avoid foreclosure.

Asked how those cuts could affect Philadelphia, Carson said that the final budget is up to Congress, and that he wants to use what funds he gets in “the most effective and efficient way.” He said the department is evaluating its programs for effectiveness and wants to “make sure we continue” particularly successful programs. On Trump’s decision to slash his agency’s budget, Carson said he agreed “we need to be fiscally responsible.”

“Some of the programs have been a little careless,” he said, and needed, if not cuts, a “reexamination and tightening up.” comments are intended to be civil, friendly conversations. Please treat other participants with respect and in a way that you would want to be treated. You are responsible for what you say. And please, stay on topic. If you see an objectionable post, please report it to us using the “Report Abuse” option.

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It’s Time to Hone Your Marketing & Reseach Skills to Locate …

Sure, you are using Facebook, but do you have a business page just for your investing? If not, get one, as it’s free and you can have it up and running in minutes. You’ll post about your rental homes, a way to market for tenants with images, text and even video. When you want to market a vacant property for rent, Facebook Ads are very inexpensive and can be targeted to renters in the areas you choose. You can also post about how you help homeowners in distress to sell their homes and/or avoid foreclosure.

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3 Foreclosure Alternatives: What to Do Before Your Mortgage Goes Underwater

Maybe you’ve missed a couple of monthly mortgage payments. Maybe a notice of default from your lender is looming right now. You understand the severity of the situation, but what most homeowners don’t know is that foreclosure is not the only option you have when you’re no longer able to afford your house.

The first step for anyone in risk of foreclosure is to get in contact with your lender. This shows that you are aware of the problem and committed to finding a solution—and trust us, that will go a long way. The earlier you reach out, the greater shot you have of amicably rectifying the problem.

After you speak with your lender, your lender will lay out your options, including the foreclosure alternatives that you might be able to take advantage of. Let’s take a closer look at some of the alternatives so you—and your credit history—don’t suffer the ultimate blow.

1. Standard sale or rental

If your home is currently valued at more than you owe and if you are up to date on your mortgage payments (but you anticipate that paying your mortgage could become a problem), you can hold out as long as possible for a buyer.

You can also try to rent out the home to cover the mortgage payments until the house sells, says Carolyn Rae Cole, a Realtor® with Nourmand Associates. In the end, virtually all homes eventually sell—it’s just about pricing.

2. Short sale

When a home has fallen in value and is priced so low that there isn’t enough equity to cover the mortgage, you might have the option to conduct a short sale. It’s also known as going “underwater.” This means the lender agrees to accept less than the amount the borrower owes through a sale of the property to a third party.

A short sale works like this: A specialist brokers a deal with the mortgage lender to sell the home for whatever the market will bear. If the amount of the sale is for less than what’s owed on the mortgage, the lender gets the money from the sale and relinquishes the remaining debt. (This means you won’t owe anything else.) In a short sale, the lender usually pays for the seller’s closing costs. A traditional sale takes about 30 to 45 days to close after the offer is accepted, whereas a short sale can take 90 to 120 days, sometimes even longer.

Sellers will need to prove hardship—like a loss of primary income or death of a spouse—to their lender. In addition to explaining why they’re unable to make mortgage payments, sellers will have to provide supporting financial documents to the lender to consider for a short sale.

3. Deed in lieu of foreclosure agreement

A deed in lieu of foreclosure is a transaction between a lender and borrower that effectively ends a home loan. Essentially both parties agree to avoid a lengthy foreclosure proceeding by the borrower voluntarily turning over the home’s deed to a lender, says professor David Reiss of Brooklyn Law School
. The lender then releases the borrower from any further liability relating to the mortgage. However, if the property is worth significantly less than the outstanding mortgage, the lender may require the borrower to pay a portion of the remaining loan balance.

You might be eligible for a deed in lieu if you’re experiencing financial hardship, can’t afford your current mortgage payment, and were unable to sell your property at fair market value for at least 90 days.

Bottom line: This agreement is a negotiated solution to a bad situation—borrowers who have fallen behind on their payments are going to lose their house and the lender is not getting paid back in full.

Here are a couple of rules of thumb on dealing with this extremely unfortunate situation:

Go into foreclosure only as a last resort

Many distressed homeowners proceed with the foreclosure process often without being fully aware of the short sale option. But the truth is, banks don’t want the expense and hassle of a foreclosure. It can cost them thousands of dollars to take a home through the process and will force them to report the house as a “non-performing asset,” which can reduce the amount of money they have to loan out to other people.

Foreclosures can range from bad to worse depending on whether you live in a nonrecourse state.

“In a nonrecourse state, if the bank forecloses and doesn’t recover all of its money, it can’t come after you for the difference,” says Casey Fleming, author of “The Loan Guide: How to Get the Best Possible Mortgage.”

In a recourse state, you’ll owe the bank the difference between the foreclosure price and the amount you owe on your mortgage.

How short sales and foreclosures affect your credit history

In both short sales and foreclosures, the delinquent mortgage will negatively affect your credit rating. But short sellers avoid having a “debt discharged due to foreclosure” on their credit reports—something that could reduce their credit score by over 250 points! You might also have to wait up to several years to requalify for a mortgage at a reasonable rate.

Short sales, however, show up on credit reports as a “pre-foreclosure in redemption” status and result in a credit score reduction of 100 points or less. People who successfully complete a short sale might also qualify for a mortgage at a reasonable interest rate in as little as 18 months.

For more smart financial news and advice, head over to MarketWatch.

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County Program Tackles Real Estate Fraud, Scams

The county of Los Angeles works diligently to protect homeowners and combat the scourge of real estate fraud every day.

It is imperative that the public has accurate information about the services the County is able to provide, as well the fraud notification program we have put in place to protect our residents from scams such as home title fraud.

For more than 20 years, the Los Angeles County’s Registrar-Recorder/County Clerk (RRCC) and Department of Consumer and Business Affairs (DCBA) have collaborated on the Homeowner Notification Program. As part of the program, instituted in 1996, homeowners are notified by mail any time a document that changes ownership is recorded with the RRCC; this includes, deeds, quitclaim deeds, and deed of trusts.

To ensure homeowners are properly informed, a copy of the recorded document is mailed to the property address as well as the homeowner’s mailing address on file with the Assessor’s office for the property tax bill, if it is different than the property address.

This gives homeowners the best opportunity to review the real estate documents to be sure they are legitimate and to avoid fraud. Each insert provides the homeowner with information explaining what type of transaction is occurring and are instructs them to immediately call DCBA or RRCC for information or help.

In 2013, the Homeowner Notification Program was expanded to include recorded documents involved in a foreclosure.

The Department of Consumer and Business Affairs offers free, reliable assistance to help homeowners avoid becoming a victim of real estate or foreclosure fraud.

“The County of Los Angeles fights to protect consumer and homeowners from all types of fraud,” said Brian J. Stiger, Director of the Department of Consumer and Business Affairs. “The Homeowner Notification Program is the first line of defense against fraud. Our team of trained and dedicated counselors and investigators are there to provide the help and support homeowners need when they need it.”

DCBA investigators coordinate with law enforcement, and prosecuting and regulatory agencies to identify and investigate real estate fraud cases for referral for civil or criminal prosecution. DCBA works directly with lenders to explore all options to avoid foreclosure.

In addition, the office of the Registrar-Recorder/County Clerk ensures documents submitted for recording that change ownership meet the legal recording requirements as specified in the government code. Additionally, customers are required to show their California identification to prove that they are a party to the action when recording a document that will change ownership.

“We continually work with our industry partners to ensure we are implementing processes that will strengthen our oversight role in recognizing fraudulent activity. Although the Recorder’s role does not include the review of legal sufficiency in the recording process, when fraudulent or legal concerns arise, they are referred to DCBA and the appropriate authorities.” said Dean Logan, Registrar-Recorder/County Clerk. “The public should feel safe and confident knowing our department is proactive about fraud prevention at all times.”

Los Angeles County sends hundreds of thousands of notifications out each year. Each year, more than 10,000 homeowners contact DCBA for help in fighting potential real estate fraud. A recent survey sent along with notifications show more than 96 percent of homeowners approve of the program.

Contact the Department of Consumer and Business Affairs at (800) 593-8222 to receive more information or you believe you have been the victim of real estate fraud. To reach the Registrar-Recorder/County Clerk, call (800) 201-8999, option 2 or visit You can also file a complaint online.

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The Pros And Cons Of Buying A Distressed Property

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How Rich Chinese Use Visa Fixers to Move to the US

One summer Saturday in 2013, Vivian Ding took the stage in the grand ballroom of Shanghai’s Shangri-La Hotel to hold forth on a subject in which she was both an expert and an inspiration: emigrating to the U.S.

Tall, with a commanding presence, Ding is what you might get if Tony Robbins were a Chinese woman capable of both pumping up a cavernous ballroom and filling out an I-526, the Immigrant Petition by Alien Entrepreneur form. Standing next to a 6-foot-high pyramid draped in black velvet, she recounted her own move to America and described the prestigious U.S. high school her daughters attended, thanks to a program that lets immigrants invest in new commercial enterprises in exchange for permanent residency visas—green cards. The cloth was pulled to reveal a model of a Manhattan building: the glassy residences on the Hudson River now known as Via 57 West. Sign a contract that day to lend $500,000, help build a “landmark for mankind”—and take home a prize, Ding implored the audience. That day, the prize was an iPad mini.

Ellis Liu, a finance manager at a company that runs internet cafes, was in the audience. He didn’t sign up on the spot, but he couldn’t shake the idea. Shanghai had become so smoggy; his young son was constantly sneezing. A few months later, he paid $50,000 in fees to Ding’s company, Qiaowai, and got money from his father to make a $500,000 investment in another New York project, to bring Wi-Fi to the city’s subway system. Then he settled in for the four-year wait before, conditional visa in hand, he’d be able to begin job hunting in Los Angeles.

Some immigrants pile into rafts or fishing boats to get to America. Others try to slip past the cameras and sensors along the southern border. And many simply pay up via the EB-5 visa program, through which U.S. Citizenship and Immigration Services issues 10,000 conditional green cards annually. By investing $500,000 in areas deemed economically distressed, prospective immigrants can get temporary U.S. residence for themselves and their families. Anyone whose investment creates 10 jobs can apply to become a permanent resident.

When the program started, in 1990, Congress was squeamish about creating the impression that U.S. visas were for sale, so the law specifies that investors’ money must be at risk. The hope was that the program would jump-start development in moribund rural areas. But it languished unused for years, until developers in New York and other large cities figured out how to get just about any area to qualify as distressed, and the program took off. In recent years more than 90 percent of EB-5 investments have been in cities, and about three-quarters in real estate—often luxury residential properties in Manhattan. Most of the money comes from Chinese investors lined up by fixers such as Ding, who flood WeChat with advertisements and bring over American politicians to attach their names to projects, like Hollywood stars hawking whiskey in Japan.

Post-Brexit, mid-Trump, borders appear to be tightening, but China’s visa fixers still sell a world of limitless possibilities. They’ve turned some of the world’s most forbidding bureaucratic machinery into a kind of consumer good for China’s rising wealthy class. “No other country in the world comes anywhere near the Chinese market in terms of the network of agents,” says Philadelphia attorney Ron Klasko, who heads the American Immigration Lawyers Association’s EB-5 committee. At least 1,000 migration agents are registered in China, and industry participants say there are many more unofficial ones. “Some operate at an exceedingly high level,” Klasko says, “and some do not.”

Ding’s company, Qiaowai, inadvertently put the industry under additional scrutiny in May when it hosted an event at the Beijing Ritz-Carlton headlined by Nicole Meyer, the sister of Jared Kushner, President Trump’s son-in-law and a White House adviser. She was seeking investors for One Journal Square, a pair of apartment towers Kushner Cos. is building in Jersey City overlooking Manhattan. Meyer said the project “means a lot to me and my entire family.” At one point in the session, a photo of Trump was displayed on a giant screen. Qiaowai had published advertisements inviting investors to consider the “government-supported” development, which, it claimed, “in a real sense guarantees a permanent green card and the safety of the investment principal.”

Meyer’s remarks were immediately reported by international news agencies, and a Kushner Cos. spokesman apologized. Qiaowai pulled the advertisements. Federal prosecutors later sought emails and documents from Kushner Cos., which said it “did nothing improper” and is “cooperating with legal requests for information.” Kushner Cos.’ partner in One Journal Square, KABR Group, told CNN in August that the two companies were no longer seeking EB-5 financing for the project.

The incident was a gift for the significant number of congressional members who’ve grown to despise the EB-5 program. Some can’t get over the idea that it smacks of selling citizenship. Others say the program is dirty and point to a series of scams that have defrauded foreign investors and put U.S. citizens in jail. Still others say the program has enriched middlemen and a few big-city developers while doing almost nothing for the parts of the country it was designed to help. Republican Senator Charles Grassley of Iowa—a state that hasn’t seen an EB-5 project since 2010, according to the Iowa Economic Development Authority—is perhaps the most vocal and vehement critic. He’s asked the Department of Homeland Security, which oversees immigration to the U.S., to investigate “potentially fraudulent statements and misrepresentations” made by Qiaowai in promoting the Kushner buildings.

Chinese agents have heard this all before. “An agent said to me once, ‘You know, we make a lot of money every time you cry wolf,’ ” recalls Robert Whyte, a Los Angeles banker who advises U.S. developers on EB-5 compliance. “They go out there and sell ‘This is your last opportunity!’ knowing full well it’s not.”

Mickey Rowley was running the Greater Philadelphia Hotel Association when Pennsylvania Governor Ed Rendell named him, in 2003, deputy secretary for tourism, film, and economic development marketing. A few years into his tenure, someone asked him to look into using EB-5 funding to attract film production to the state. After all, moviemaking, like condo construction, creates jobs. His colleagues shrugged when he told them he was headed to China to round up $60 million from immigrant investors. “They were like, ‘Go get ’em, sport,’ ” he recalls.

He had the commitments in 12 days. EB-5 loans were eventually used to make the Russell Crowe thriller The Next Three Days and the slasher flick My Bloody Valentine 3D, among others, in Pittsburgh. And Rowley—suddenly regarded as a China expert—returned a half-dozen times to raise money for projects across the state.

What made it so easy, Rowley says, were the agents. They waited in his hotel lobby each morning. They stood at attention until he took his seat at dinner. And during meals, he says, “no one takes food off the Lazy Susan until I take food off the Lazy Susan. These agents really suck up to you.” They would offer him a car and driver, restaurant reservations, invitations to karaoke. “I never paid for anything,” Rowley says. “I was never alone. I was handled right up to the hotel lobby.”

He also came to understand the extent to which the agents traded in proximity to power—sometimes physically. One agent sublet space in Pennsylvania’s trade office in Shanghai to impress clients. At presentations, Rowley spoke in English as an agent translated. It could be awkward. Standing before an audience in Wuhan, wearing a tie with a map of Pittsburgh on it, he tried to connect by saying he felt at home because rivers flowed through both cities. But what he’d meant as a little flourish died as the agent held up his own tie, pointed to it, and told the audience something like, “This guy’s tie has a map of Pittsburgh.” As Rowley gave more speeches, he noticed that people listened intently when the governor’s name came up. So he made it part of his talks. “I always made casual mention of a conversation when ‘I was just speaking to our governor the other day about Chinese investment,’ ” he says.

Agents sometimes exploited the language barrier. Rowley remembers one having a long and animated discussion in Chinese with an audience member. Others jumped in. A Chinese-speaking American told him afterward that the agent had reassured the audience member he didn’t need to worry that he’d been in the Communist Party. Someone told the agent she was mistaken. The U.S. generally denies visas to current and former party members.

With EB-5 loans, developers pay interest rates of 4 percent to 8 percent a year, compared with commercial alternatives of 10 percent to 18 percent. The developers latched onto the program during the Great Recession and now count on it for a big part of their financing; the value of all EB-5 loans jumped from $240 million in 2007 to $4.4 billion in 2015, according to financial adviser Brandlin Associates.

Agents make money on both sides of the deal. In addition to a fee of about $50,000 paid by each investor, they claim as much as half of the interest payments made by the developer. Middlemen in the U.S., who bundle EB-5 investments for developers, get most of the rest. The immigrant investor typically gets 0.5 percent or less.

But many aren’t interested in their rate of return. They want the visa—and a project that’s sure to succeed. If it fails, there’s a chance they’ll lose both their principal and their shot at a green card. Agents who can quickly deliver investors likely to get initial approval from U.S. immigration can get a bigger piece of the interest payments from developers, Klasko says. And agents connected to good projects can charge investors more. “China is nothing if not a capitalist society—it’s all negotiated,” he says.

The pay quickly adds up, particularly for large companies such as Qiaowai, which says it has 600 employees in 15 Chinese cities. Last year the U.S. received about 11,000 immigration petitions from Chinese investors, and Qiaowai claims it accounts for a third of the EB-5 market in China. If each of those approximately 3,700 petitioners who were Qiaowai clients paid a typical $50,000 fee, Ding’s company made something like $185 million, not including interest payments. Qiaowai and Ding didn’t respond to multiple requests for comment for this article.

Ding places her personal American success story at the center of Qiaowai’s marketing, sometimes inviting her twin daughters, who went to the same prep school in Dallas as George W. Bush’s twins, to join her on stage. The company has posted photos on social media of Ding at Trump’s inauguration and at a post-inaugural party called the Liberty Ball.

Agents are responsible for finding the hook that will make each project appeal to Chinese investors. Often, it’s an American politician or celebrity. “They completely trust the American government,” Rowley says, “despite the fact they don’t trust their own government.” Last year former New York Mayor Rudy Giuliani spoke in Beijing and Shanghai at Qiaowai seminars for Maefield Development’s renovation of a Times Square theatre. Giuliani, who was billed as “the father of the Times Square revival,” gave short speeches on the strength of the New York economy.

In 2013, Qiaowai helped raise $50 million in EB-5 loans for a Jersey City tower known as Trump Bay Street, built by Kushner Cos. It was a fallow moment for the family brand. “Nobody knew who Kushner was, and we felt Trump was a funny character,” recalls Lily Wang, a former Qiaowai manager who now runs the competing Guanyi Investment Consulting Group. “He was no Buffett, and leveraging on him could not be convincing.” Qiaowai instead promoted the project’s proximity to Manhattan. A video put viewers behind the wheel of a car driving through Jersey City as Woke Up This Morning, the theme song from The Sopranos, played. It was still a difficult sell; Wang says it took Qiaowai a year to find 100 investors for the Trump-Kushner project.

In June, a month after Qiaowai held the event in Beijing featuring Nicole Meyer and the big photo of Trump, people crowded into the grand ballroom in Shanghai’s Four Seasons Hotel for another Qiaowai seminar. Two massive TV screens looped a video profile of Ding and shorter stories about successful immigrants. “These are all true stories,” Song Ying, a sales manager, told the crowd. Qiaowai hadn’t had an easy start with the EB-5 program, she confided. Early clients doubted they’d get their $500,000 back. When the first of them did, Song recalled, they threw a party.

This day, Song was announcing the company’s newest project (its 88th, according to the company website), a Criterion Group development on the Astoria waterfront in Queens, N.Y. Even though congressional critics were calling for an investigation of Qiaowai’s claims at the Kushner event, Song repeated the pitch. “Choose Qiaowai,” she told attendees, “you will get what you want. Guaranteed.”

At the seminar’s next session, a tax expert highlighted an important benefit of emigrating to the U.S.: The country hasn’t signed on to an automated international information exchange, designed to reduce tax evasion, that China had just joined. “The Chinese government won’t know how much money you have in the U.S.,” he said to a room of investors, some of whom rose to snap photos of his slide presentation.

The families, some with toddlers, spilled from the ballroom into a foyer. There, more experts stood by to answer prospective investors’ questions on housing, education, and other aspects of resettlement. Jannie Zhang, a business development officer from the China offices of Standard Chartered Plc, was there to advise on perhaps the most important concern: getting money out of the country. China allows its citizens to move only $50,000 abroad each year, far below the minimum EB-5 investment of $500,000. To get around this, investors often line up friends and family, or even pay strangers, to wire money overseas, a process known as “ant moving.”

China monitors transfers from multiple sources into a single overseas account. Zhang told people that transferring money out of mainland China into multiple overseas accounts, instead of just one, should be enough to avoid the government’s attention. She said investors could open an account at one of the bank’s branches in China for 500,000 yuan ($76,500) and get additional accounts in Hong Kong or Singapore. From there, the money could be routed freely to the U.S. “This is a service that we are not allowed to promote proactively,” Zhang said. “But we can answer questions.”

Not every agent can afford Qiaowai’s trappings at the Four Seasons. Two smaller operations set up shop in smaller conference rooms next door, and in the lobby, a man approached every person leaving the hotel who carried one of Qiaowai’s gray tote bags. “Do you need immigration service?” he asked. “Take my card.”

In 2009, as Chinese investors were flocking to EB-5, Larry Wang, founder of Well Trend United Consulting, a large immigration agency based in Beijing, joined a nationally televised debate about the program. Some participants argued that it was unfair to China—just a way for the U.S. to squeeze money out of the country during the Great Recession. Wang, an EB-5 supporter, countered that the program was good so long as agents brought solid projects to their customers. Thinking back on that debate today, he says, he wishes he’d been more critical. “It’s getting too popular in China,” he says. “Are most Chinese clients knowledgeable enough? Are most agents good enough, capable enough to handle the situations? I don’t think so.” Wang learned the hard way about the risk that clients will be swept up in fraud. In 2010, Well Trend found four investors to supply $500,000 apiece in EB-5 funding for a factory that a Beverly Hills businessman was proposing to build in Moberly, Mo., 130 miles east of Kansas City. The facility was meant to produce Sweet-O, an artificial sugar substitute developed by a company called Mamtek. The city of Moberly sold $39 million in bonds to help fund the project.

A year later, Mamtek was broke. The businessman, Bruce Cole, was charged with theft and fraud after it emerged that he’d used the money to avoid foreclosure on his California home. He pleaded guilty and was sentenced in 2014 to seven years in prison. The city defaulted on its bonds, and investors lost their money. Wang says he personally repaid his clients $2.5 million to cover their lost investment and other fees.

In 2013 the U.S. Securities and Exchange Commission issued an alert warning investors to avoid companies that guarantee returns or visas or that claim to be supported by the U.S. government. But frauds big and small continue to haunt the program. In Seattle, a Tibetan monk-turned-developer was recently sentenced to four years in federal prison for misusing money he raised from more than 280 Chinese investors. Another developer misused $200 million in EB-5 money raised from 731 investors to build a biotech center in rural Vermont, according to the SEC. The commission also says it’s stopped some scams in progress, including one in which a man raised about $160 million from more than 290 Chinese nationals for the “World’s First Zero Carbon Emission Platinum LEED certified” hotel in Chicago, then never even went so far as to apply for building permits. The investors got $147 million of their money back—and those who were still interested had no choice but to start the process over again.

The U.S. hit its annual quota of 10,000 EB-5 visas for the first time in 2014. Eighty-five percent of them went to Chinese nationals. The quota system stipulates that no country’s citizens can claim more than 7 percent of the total EB-5 visas in a year, as long as any other country wants them. But demand from outside China is small—though it’s growing—so in practice, citizens of every other country go directly to the front of the line and Chinese investors hoover up whatever’s left. The most visas ever claimed by a country other than China was 903, by South Korea in 2009.

Just before Trump took office, Homeland Security proposed rules that would raise the minimum investment for an EB-5 visa to $1.35 million and tighten the qualifications for distressed areas. The Trump administration hasn’t yet made clear whether the rules will go into effect.

Congress, for its part, continues to scrutinize the program. Primarily because of opposition by Grassley, Democratic Senator Dianne Feinstein of California, and a few others, EB-5 has been surviving on short-term extensions for the past two years. Feinstein wants to kill the program entirely.

But that appears to be a minority view. Most politicians find it hard to turn down any program that promises economic development, and even some of those who take a hard line on immigration can stomach EB-5. In July, Senator Ted Cruz spoke in San Francisco at the EB-5 Investment Immigration Convention. The Texas Republican told attendees that EB-5 creates jobs at zero taxpayer expense. The program also meshes with the priorities Trump set in his immigration proposal to curtail family preferences while maintaining those based on skills or wealth. Trump and his son-in-law, of course, have benefited from the program themselves through the Jersey City project. Kushner says he’s recused himself from any administration decisions on EB-5.

It may be that the only losers in this system are the prospective immigrants. Over the past four years, 13 percent of EB-5 loans failed to perform, more than twice the rate of commercial mortgage-backed securities, according to Mark Elletson, managing director at Brandlin Associates. Lance Jurich, a Los Angeles bankruptcy attorney, says he’s been hearing lately from more EB-5 investors, and they’re often in a tough spot, because their loans are typically junior to others in bankruptcy proceedings. In addition to getting their principal back, Jurich’s EB-5 clients want help proving their money created jobs while the project was still viable, so they can maintain their immigration status. “When you’re representing a financial institution like a bank, the loan officers don’t get deported if the project fails,” Jurich says.

Basic math is also working against aspiring immigrants. The number of visas available to Chinese nationals is falling—to about 7,500 in 2016—as more people from other countries apply for the program. There are now so many pending applications from China that the U.S. government estimates a Chinese investor filing now may have to wait 10 years from the time he forks over his $500,000 to when he gets approval to move to the U.S. Liu, who paid his money in late 2013, didn’t get an interview with a U.S. visa officer until this May. He flew to Guangzhou, where a visa officer at a U.S. field office, seemingly without a glance at the files Qiaowai had prepared for him, granted him, his wife, and their son conditional visas good for two years.

In September, Liu plans to visit Los Angeles and see Disneyland with his family. Then he’ll start looking for a job in the area. He’s trying not to share his unease about the uncertainty of the visa process. “I’m actually quite worried,” he says. “But I leave the pressure to myself.”

As the backlog in the U.S. builds, Chinese agents see a new kind of opportunity: They’re trying to sell clients on destinations where investor visas are easier to obtain. At the seminar in June, Qiaowai’s Song suggested investors check out Malta, which is part of the European Union. It’s pricey, but fast. And there are other options. Whyte, the consultant, isn’t convinced of the potential. “The agents say to me, ‘My clients are also considering Australia,’ ” he says. “And I say, ‘Let them go to Australia. Go ahead!’ They want to come to America.”


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Long-dormant Bridgeview Crossing site in Garfield Heights finally will transfer to Craig Realty Group

GARFIELD HEIGHTS, Ohio – A California retail developer finally is poised to take control of the failed Bridgeview Crossing project in Garfield Heights, where 70 acres have been sitting fallow since the start of the Great Recession in 2008.

On Wednesday, a local judge paved the way for the site to change hands as soon as next week. Craig Realty Group, a Newport Beach-based outlet-mall developer that bought distressed debt on Bridgeview in 2011, will take possession of the property to avoid a foreclosure.

After dropping plans to bring outlet shopping to the site, developer Steve Craig hasn’t said what he aims to do with the property, at Interstate 480 and Transportation Boulevard. He didn’t respond to a request for comment. Attorney Rob Glickman, who appeared on Craig’s behalf in court, said he didn’t know the details.

Mayor Vic Collova wasn’t available to discuss the project Wednesday afternoon. In past interviews, the mayor has talked about the possibility of a mix of retail and other uses, with the potential to support 900 jobs. He’s stopped short of identifying tenants, though rumors abound that Swedish furniture retailer Ikea is eyeing part of the site.

An Ikea spokesman told The Plain Dealer late last month that the company still hopes to open a Northeast Ohio store. But Ikea hasn’t committed to a location.

Bridgeview Crossing was a casualty of the financial crisis and a nationwide pullback by lenders and retailers.

Then-partners David Snider and Sam Cannata prepared the site for a $90 million office-and-retail project, anchored by JCPenney, Target and Lowe’s. But they lost their financing and, gradually, their tenants as the turmoil of the housing bust spread to other parts of the economy. For eight years, the land has yielded only delinquent property-tax bills and frustration for Garfield Heights and Cuyahoga County.

On Wednesday, Cuyahoga County Common Pleas Court Judge John Sutula signed off on a motion giving the court-appointed receiver in charge of the property the authority to transfer it to Craig. No one showed up in court to protest that course of action, and the hearing turned out to be more of a behind-the-scenes conference between attorneys.

A copy of the judge’s order had not appeared on the court docket by late Wednesday, but Glickman and receiver David Browning confirmed the details. The final filing on the matter should appear by Sept. 22, triggering an immediate real estate transaction, said Glickman, who is a principal with the McCarthy, Lebit, Crystal Liffman law firm in downtown Cleveland.

Browning, managing director of the CBRE real estate brokerage in Cleveland, confirmed that timeline. He, also, declined to comment on what Craig might be planning.

The Bridgeview Crossing litigation, initiated by contractors hired for the original project, started in August 2009.

A similarly long-running real estate dispute, over the largely vacant City View Center retail project across the freeway from Bridgeview, also showed some life this week.

On Tuesday, U.S. District Court Judge James Gwin approved a request to let a new plaintiff – who recently bought the note on City View at a deep discount – step into that case. The big-box shopping center, built on former municipal landfills, has been in receivership since 2009.

A filing late last month identified George Simon, an entrepreneur and attorney who has a relationship with McCarthy Lebit, as counsel for the new lender on the property. The sinking parking lot, past environmental concerns and stigmas cast by departed tenants including Walmart make City View a tougher redevelopment proposition than the Bridegview site.

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Ex-director of HUD-accredited nonprofit pleads guilty to fraud

CFPB warns against using reverse mortgages to delay Social Security payments

The CFPB claims that the tactic, which is being touted by several reverse lenders, could cost more in the long run

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Distressed Homeowner Leads for Less than the Price of a Cup of Coffee

You can start out with the image and an introductory post and have that up in minutes. Then you should be posting about what you do. Whatever your real estate investment strategy, if you’re searching for sellers, then you must be providing a service they need. Usually, it’s getting them out of a house they need to sell so that they can avoid foreclosure or just move on to employment out of the area. You’re helping them to accomplish their goal and making a profit in the process. If you have a business website, you’ve already probably created content that you can introduce and link to from your Facebook page.

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