When collecting the money, Former Air Force Col. Timothy Milbrath claimed the funds would be used to build a giant hotel complex in New Orleans that would produce jobs for investors, according to the allegations. Five years later, the money has disappeared, the hotel project is nothing but an empty lot, and the investors are left without Green Cards.
The plan was set up under a US immigration program known as EB-5, which allows foreign investors to obtain visas, and eventually Green Cards, if they invest at least $500,000 in projects that will create American jobs.
“They were saying it was going to help the New Orleans people after Katrina, we would get our Green Card, and we’d get a return on top of that,” retired British police officer Terry Sumpter said to ABC. “It really did seem like a good deal.”
Milbrath denies doing anything illegal, telling ABC News that the allegations “are not correct,” and that “everything is accounted for.”
“I can honestly say that what we have here – the claims are not substantiated,” he told the news outlet.
More than 30 EB-5 projects have been investigated for criminal activity, including the one set up by Milbrath and another business partner, called Noble Outreach.
Noble Outreach produced promotional videos and materials, highlighting Milbrath’s White House ties to Presidents Ronald Reagan, George H.W. Bush, and Bill Clinton, to entice foreign investors.
Investors claim much of the $16 million they invested with Noble Outreach was given to Milbrath, his partner William “Bart” Hungerford, Jr., and their companies.
“We were duped,” said Terry Sumpter, a retired British police officer who says he lost the bulk of his savings investing with Noble Outreach. “It’s gut wrenching, it really is.”
Although it is being investigated, Noble Outreach remains certified by the Department of Homeland Security to operate as part of the EB-5 immigrant investor program.
According to DHS, without concrete proof of wrongdoing or authority from Congress, it can’t take away a firm’s certification or shut a project down. Homeland Security Secretary Jeh Johnson said he is asking lawmakers for such authority.
