Forest City Ratner misled foreign investors: Watchdog

From left: Rendering of Atlantic Yards (Credit: SHoP) and a U.S. visa
From left: Rendering of Atlantic Yards (Credit: SHoP) and a U.S. visa

Cause of Action, a watchdog group, has accused Forest City Ratner of misrepresenting the risk to foreign investors of backing its $4.9 billion Atlantic Yards project, and asked federal legislators to investigate the developer.

Forest City allegedly exploited census data to entice foreign investors to use the EB-5 program, which provides visas in exchange for creating American jobs. Cause of Action completed an 18-month investigation of its own before appealing to the U.S. House Committee on Oversight and Government Reform.

A spokesperson for Forest City did not immediately respond to Law360’s request for comment.

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“Our investigation uncovered that not only did FCR violate the law and engage in political profiteering, but the DOJ turned a blind eye to FCR’s criminal activity,” Dan Epstein, executive director of Cause for Action, said in a statement cited by Law360. “We can’t rely on these federal agencies to properly apply their own rules … which is why Congress should intervene and investigate these practices.”

To utilize the EB-5 program, developers must show that a project is located in a high-unemployment area. But the targeted employment area designed for Atlantic Yards only uses census tracks as a basis for its boundaries, Cause of Action said, which effectively creates a gerrymandered EB-5 district. The group claimed that politicians used such gaps as a way around getting prohibited contributions from foreign residents. [Law360]Julie Strickland