What Do Children and Shrimp Have in Common? Think Mamtek.

Missourians may remember the debacle known as Mamtek, the investment scheme that blew up for Moberly Missouri citizens.  Bruce Cole, an American investor from California, swooped into the small rural town and charmed Missouri Department of Development staff and Moberly city officials to invest in his business venture involving significant overseas investments. Chinese investors were taking advantage of EB-5 investment program designed by the US government designed to spur American employment.  From businessweek.com:

The 21-year-old initiative makes 10,000 green cards available to
foreigners who invest a minimum of $500,000 in U.S. companies that
create or preserve at least 10 jobs in the country. The U.S. Citizenship
and Immigration Services estimates that EB-5 has attracted more than
$1.5 billion in investment since its inception, creating some 31,000
jobs.

 “This is a unique way for immigration to enhance the U.S. economy …
at no expense to the U.S. taxpayer,” says Stephen Yale-Loehr, who
teaches immigration law at Cornell Law School. The primary
conduit of investments for the EB-5 program, though, faces an uncertain
future. About 90 percent of the money is funneled through private
companies, known as regional centers, which match overseas investors
with businesses in need of capital. These companies are authorized to
participate in the program by legislation that expires every few years. 

Chinese investors can gain green cards for themselves and their families by providing money for start ups.  It didn’t work out so well for Mamtek as Bruce Cole promised phantom investors and didn’t deliver a suctrose plant.

What does Mamtek have in common with education and shrimp?  Mamtek is the same blueprint used in other investment ventures.  The Chinese are currently investing in Florida charter schools and a shrimp farm in Miami, Florida to gain their green cards and provide a service.  From miamitodaynews.com:

Chinese
investors are taking advantage of the EB-5 investment visa program, the
so-called “green card via red carpet,” by putting millions into
Florida’s charter schools and an aquaculture farm in Central Florida.

 Under
the EB-5 program, through investments of at least $1 million — or
$500,000 for “targeted employment areas” — foreign nationals are able to
obtain legal residency in the US so long as the money they invest will
help secure or create at least 10 full-time jobs.

A
group of Chinese investors have put $30 million into the state’s
charter school program to date and are looking to invest three times
that amount in the next year, Ilona Vega Jaramillo, director of
international business development for Enterprise Florida, the state’s
economic development arm, said in a US-China roundtable discussion last
week. 

In
addition, about 12 other Chinese investors have put their $500,000 into
a $16 million aquaculture project on 100 acres in Fellsmere, FL.  

She would not name any of the investors, citing confidentiality.

At least $30 Million has been invested in charter schools and this
figure may balloon to $90 Million in the next year.  Sucrose, shrimp and
human capital sure are attractive investment opportunities these days in America. 
Remember, taxpayer dollars are being used to open these charter schools (they are NOT private schools)
and pay for these green cards.  And since Florida has signed onto common
core and will be adopting “internationally” benchmarked standards, it
should make perfect sense that Chinese nationals own the schools
American children will attend.

I hope Florida children and taxpayers don’t get shortchanged like the Moberly citizens did believing in Bruce Cole and his promises of a product in exchange for green cards.  Who should taxpayers be angry with, the investors or the politicians allowing these investments?  I believe the Federal programs should bear the brunt of taxpayer fury.  These investors are just doing what investors do: taking advantage of crony capitalistic programs designed by politicians and bureaucrats.  If these programs didn’t exist, there would be no foreign investments in American schools propped up by taxpayer dollars.

The education investment is just that…an investment.  It’s not so much about the education, it’s just another investment for the investor and a way for Chinese nationals to gain green cards. 

Update:

Here is the information tying Mamtek into the EB5 Program, the same program Chinese investors are using to invest in Florida charter schools.  From eb5info.com and Bloomberg on Mamtek EB-5 Visa Regional Center Investment Failure:

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In the recent article from Bloomberg Businessweek’s Susan Berfield, A Missouri Town’s Sweet Dreams Turn Sour,
the author describes in great detail how the hopes of one small
midwestern town collapsed under the weight of lofty promises and false
promotion involving a project partially funded by EB-5 visa investors.
This follows our reporting of the story in September.

Her investigation reveals that, in the rush to create desperately
needed jobs in a small town without many options, city planners and
economic development officials did not ask many questions about
promoter/developer Bruce Cole and his plans to create a large
manufacturing plant despite having little experience or financial
resources:

Although Cole would not comment, interviews with former
Mamtek executives, consultants, and city officials, as well as a review
of the bond offering, legal filings, and other records made public, tell
the story of Mamtek’s collapse. It’s a tale of economic desperation,
the lure of Chinese wealth, and, most of all, people’s need to believe.
“We all thought this was going to be awesome. We thought everything had
been checked out,” says Lindsey. “Shame on us.

The following saga of development and mismanagement is well
chronicled in the article, including the injection of equity from
private investors and the bond offering made by the City of Moberly.
Throughout this stage, developer Cole was constantly short of cash, a
problem for which he was counting on EB-5 visa funding to help make
payments:

Although Cole didn’t mention it in his official pitch, he
was counting on raising millions through the U.S. EB-5 visa
program…Mamtek intended to set up its own center to attract Chinese
investors for the sucralose plant and other Moberly projects. Mamtek
applied for expedited approval in January, which Cole hoped would come
in April. The government denied the request.  Cole told Lindsey and
other Mamtek employees that the company’s EB-5 application would be
approved later through the regular process. In the meantime, he said, he
was close to raising a great deal of money from other investors. No one
had any reason not to believe him.

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This should raise red flags for taxpayers and their money being used by Chinese investors opening charter schools in the United States.  The taxpayers in Moberly, just as the taxpayers in Florida, did not have access to the supposed investors for these promised ventures.