US Senator calls for probe into Kushner Cos deal
The chairman of the Senate Judiciary Committee has called for an investigation into "potentially fraudulent statements and misrepresentations" made by companies promoting investment in a property development involving the family company of White House advisor Jared Kushner.
Citing a May 12 report by Reuters, Chuck Grassley, a Republican senator from Iowa, requested a review of claims made by Chinese migration agency Qiaowai and the US Immigration Fund (USIF) in the marketing of the One Journal Square project in Jersey City, New Jersey to potential investors in China.
Grassley flagged his concerns to the Department of Homeland Security and the Securities and Exchange Commission in a May 24 letter that was later posted on his website.
Jupiter, Florida-based USIF contracted with Beijing-based Qiaowai to market projects including One Journal Square to potential investors through the controversial EB-5 scheme. The program offers qualified foreign investors the chance at a green card in exchange for a $500,000 investment in a U.S. business.
Kushner Companies is also working with KABR Group, a private equity fund, on the One Journal Square project, according to marketing materials on Qiaowai's website. The developers are seeking to raise $150 million, or 15.4 percent of the funding, from EB-5 investors.
Because the SEC considers some EB-5 investments securities, companies and individuals that market these investments must comply with U.S. securities laws.
EB-5 schemes must also comply with immigration rules. Under United States Citizenship and Immigration Services (USCIS) guidelines, EB-5 investors must put their capital at risk and the green card is not guaranteed. USCIS is part of the Department of Homeland Security.
In an emailed response to a request for comment on Grassley's letter, Stu Loeser, a spokesman for USIF, said: "Qiaowai and U.S. Immigration Fund are fully in compliance with all laws relating to the sale of securities to immigrant investors. These allegations are gross distortions and unsupported by the facts."
Reuters previously revealed that Qiaowai's promotional materials online and on social media, including for the One Journal Square project, sometimes referred to a green card guarantee or “safeguard” and the safety of capital invested in EB-5 projects.
After Reuters contacted Qiaowai for comment, these phrases were deleted. Qiaowai has also dropped the phrase "government-supported" from its online promotion of the One Journal Square project.