On February 28, 2018, it was reported that a restaurant owner in Depoe Bay, Oregon had pleaded guilty to forced labor and visa fraud conspiracy at U.S District Court, Portland.

It is alleged that the restaurant owner in question, an American citizen born in Thailand, fraudulently obtained E-2 visas to enable Thai nationals to enter the US, for the purpose of providing cheap labor at his restaurants. According to reports, between 2011 and 2014, the restaurant owner manipulated, threatened, abused and controlled the four E-2 visa holders in question, forcing them to work for 12 hours a day, 7 days a week for nominal pay.

The restaurant owner is due to be sentenced on May 24, 2018. He faces a maximum of 20 years in prison for false labor and five years in prison for visa fraud conspiracy.

The E-2 Treaty Investor Visa

While incidences of E-2 visa fraud are undoubtedly rare, cases such as this are concerning.

In this case, it is unclear how the restaurant owner in question successfully obtained E-2 company registration for his business. In order to obtain E-2 company registration, a business owner generally needs to prove that a minimum of 50% of the shares/membership interests of the company in question are owned by nationals of the Treaty country (in this case, Thailand). As a naturalized American, the restaurant owner’s share/membership interest would be considered US owned, as opposed to Thai owned, regardless of any claim he may have had to Thai citizenship. It is possible that the restaurant owner in question had a Thai business partner, who held a 50% shareholding in the business. However, this is not suggested or confirmed by the Press reports.

Similarly, it is unclear how the restaurant owner was able to obtain E-2 Employee visas for the Thai nationals in question, given the intense level of scrutiny to which E-2 visa applications are generally subjected.

In order to obtain an E-2 Employee Visa, the E-2 Treaty Investor in question needs to demonstrate that the proposed E-2 employee:

  • Has the same nationality as the treaty employer; and will
  • Either be employed in a position which is executive or supervisory in nature; or
  • Be an essential employee, in a non-supervisory role, with special qualifications.

In this case, it is clear that the employees in question were not destined for executive or supervisory roles or, indeed, roles requiring essential knowledge.

Sadly cases such as this – while rare – are inevitably used to justify increasing restrictions on the availability of E-2 visas and detract from the benefits afforded to the US by the investment of foreign nationals in the US including, inter alia, the generation of wealth and job opportunities in local communities.

Davies Legal Immigration

At Davies Legal Immigration, we offer a “one stop shop” for all of your US business immigration needs. Our team of attorneys, an MBA, a Doctor of Business and a CPA offer a comprehensive and efficient service and provide the highest standards of client care. Call now to discuss your case with a licensed US immigration attorney for a complimentary eligibility check and receive a free, no obligation quote.

Published: 19th May 2018