Chinese Investor Money Used in EB-5 Visa Scheme to Purchase Iconic Texas State Park

Todd Interests purchased an idyllic Texas state park by using a loan from a regional business center specializing in Chinese EB-5 investors, which would reportedly crush small businesses and rob Texans of a nearby recreational center.

Fairfield Lake State Park, a park centrally located between Dallas, Austin, and Houston, which is known for its scenic vistas as well as its hiking, camping, and “world-class” bass fishing, was recently purchased by a private developer, Todd Interests, in June 2023. Todd Interests purchased the property in an “unprecedented” circumstance as the Texas Parks and Wildlife Commission (TPWD) was unable to secure the funds needed to purchase the state park.

The TPWD has done everything in its power to reclaim the state park and reopen it for all Texans to enjoy. However, Todd Interests has moved forward to demolish the state park and turn it into a “luxury gated community.”

Todd Interests hopes to transform Fairfield Lake State Park into a development called Freestone Club, which is billed as a “more than $1 billion project,” which will include a championship golf course. Developers estimate that the once-tranquil state park will now feature mansions valued between $5 and $7 million.

“Membership capacity is intentionally limited to ensure members fully enjoy the uncrowded waters on holidays and weekends,” the marketing book for the project states.

Todd Interests noted in its marketing plan that it would shut off public access to the lake as part of its development plans.

Local citizens have complained that the privatization of the state park would devastate local businesses.

The Texas Observer reported:

There are likely economic impacts as well. During my visit, I stopped in at the Armadillo Emporium, an antiques and crafts store on the main street of Fairfield, the tiny town of 6,000 for which the park is named. The store is one of the community’s largest businesses. Its owner, Julie Emons, sat at the counter unpacking El Arroyo-branded mugs, while her brother Andy — a local artist — sat in a nearby rocking chair. The siblings are fifth generation Fairfielders: Julie was 3 when the park opened in 1976, and she and her brother have grown up with the park.

Many locals leave Fairfield on the weekends, Julie said. With the mine long-since closed, the lake is pretty much all they have to offer. That morning, five different out-of-town couples had stopped in, from Oklahoma and East Texas, all drawn by the park. “Our business is off of people traveling and touring here. On an average weekend, we get probably 75 percent of our business from campers at the state park,” Julie said.  If the park’s turned into a gated development, they’ll lose all that traffic. “All these businesses downtown and especially out toward the lake are going to suffer.” [Emphasis added]

According to public records, Todd Interests used $92 million for the purchase of the Fairfield Lake State Park, which was provided via a loan from a group called CMB Infrastructure Investment Group (CMB), an organization that provides a vehicle for foreign investors to obtain Green Cards through the obscure yet lucrative EB-5 visa program.

Congress created the EB-5 visa program as an attempt to boost the U.S. Economy through job creation and capital investment through foreign investors. The federal government would grant visas to foreign investors who invest in commercial enterprises with regional centers approved by the U.S. Citizenship and Immigration Services (USCIS).

Anyone willing to put $1 million into any U.S. business, $500,00 for a rural area, is eligible for an EB-5 visa.

The visa program attempts to stimulate the economy; however, as Breitbart News has frequently reported, the program’s perverse incentives make the visa program rife with corruption and graft.

Ann Lee, a senior fellow at Demos, wrote in the New York Times that the program is “rife with fraud and corruption” so much that the program that “it could actually have the opposite impact and deter investment.”

Lee explained that the “most egregious problems” with the program surround its 218 regional centers, of which CMB Regional Center is the focal point of the controversy surrounding the purchase of Fairfield Lake State Park:

The most egregious problems with the EB-5 program can be found in its 218 regional centers, which work with private-sector brokers to identify local investments and direct foreign participants to them. Examples abound of centers and brokers playing down risky investments and misrepresenting how the program works, including a promise that EB-5 investments are guaranteed by the federal government — when the government in fact does nothing of the sort. Many investments have failed to create the required 10 jobs and even gone bankrupt, leaving the investor without his money or his green card.

While many EB-5 regional centers have solid records, a disturbing number have directed investor money to risky projects and companies that pay little to no return, overseen by brokers who get a commission regardless of how the investment plays out.

In 2018, the SEC and CMB agreed to settle charges relating to securities issued under the EB-5 Immigrant Investor Program:

According to the SEC’s order, from 2011 to 2015, 37 entities affiliated with CMB Export LLC offered EB-5 securities in the form of limited partnership interests without registering them with the SEC and without a valid exemption from registration. The order also found that CMB Export, at the direction of its CEO Patrick Hogan, paid transaction-based compensation to U.S. individuals and entities for soliciting foreign investors to purchase these securities. In 2015, CMB and Hogan began developing and implementing a compliance program to ensure compliance with the federal securities laws.

CMB Export agreed to pay a $5.15 million penalty, Hogan agreed to pay a penalty of $515,000, and each of the 37 CMB limited partnerships paid a penalty of $160,000, for a total monetary relief of $11.585 million.

EB5Projects reported about CMB Regional Centers:

Of the families that have trusted CMB with their EB-5 pursuit, CMB has helped over 5,000 investor families achieve an I-526 approval, which allows them to apply for a permanent green card for themselves and their qualified family members. CMB has helped over 1,800 families achieve success of permanent residency in the United States and has returned capital to over 2,000 investors. There are very few regional centers that can come close to this level of success for their EB-5 investors.

In 2016, Hogan touted the success of CMB Regional Centers in getting Chinese investors into his company’s EB-5 program, noting it had a 200-person waiting list.

“82 different countries so far. There’s a lot of projects [in China], and last year we had 200 people on a waiting list that wanted to join a CMB project,” Hogan said in 2016.

Texas State Sen. Lois Kolkhorst (R) expressed concerns about this issue in an August release. Kolkhorst unveiled her bill, S.B. 147, which sought to restrict purchases of agricultural land, rare earth materials, timberland, and oil and gas rights by entities that are associated with any country that poses a national security risk. She said the bill passed through the state Senate, but died in the Texas House.

She wrote:

The debate over foreign purchases of our natural resources is a tough conversation- but it’s the right conversation. Should we allow anyone from anywhere to buy a Texas park — just blindly letting it go to the highest bidder? What if the lien is carried by citizens from China, Russia, Iran or North Korea — nations listed on the U.S. National Threat Assessment?

That’s why the agreement between Todd Interests and CMB deserves more scrutiny. Questions must be answered. Right now, we don’t know anything about these investors, how many there are, or their country of origin. Todd Interests was required to offer the land, current and future income, and water rights as collateral for the $92 million loan. Do we really want the rights to a major source of Texas freshwater to fall into foreign hands?

Kolkhorst concluded in her release, “Fairfield Lake State Park is a natural gem. Texans should know exactly where all this money is coming from and who is holding the purse strings before it slips from the public’s hands forever.”