Navigating the Citizenship & Residency By Investment Minefield: The Rise of Fraud in Investment Migration

The global investment migration market is an industry that generates over $20 billion in annual revenue and offers a tantalizing proposition to potential investors. The industry is expected to grow considerably in the upcoming years as demand for additional residency and citizenship increases. For investors, the industry promises enhanced global mobility, retirement arbitrage, health and education opportunities, and financial security. Unfortunately, this market has its issues as well. A rising tide of sophisticated fraud threatens to violate unsuspecting investors and cost them hundreds of thousands of dollars and jeopardize their newly acquired citizenship status. Some of these cases include blatant scams in the Caribbean to subtle regulatory investment fund traps in Europe. The landscape of investment migration is a minefield that demands high levels of diligence and caution.

What is CBI Fraud?

Fraudulent schemes have proliferated across the globe with certain patterns of deception emerging as common threats to investors. These scams are often characterized by their professional appearance, sophisticated marketing, and a mask of legitimacy to lure in their targets.

The Financing and Discounting Trap

One of the most prevalent scams is within the Caribbean CBI market which involves unauthorized financing agreements that illegally circumvent minimum investment requirements. Fraudulent operators market CBI schemes that allow investors to pay as little as $70,000 USD upfront for real estate options that may require a minimum investment of $200k USD. These developers create artificial paper trials often using foreign banks outside the host government's jurisdiction to deceive Citizenship by Investment units into believing the full investment has been made. Caribbean governments have repeatedly issued warnings that such discounting is illegal.

The consequences for investors are catastrophically damaging as well. When the fraudulent investment is discovered, citizenship is revoked and the investment is forfeited. This was illustrated in April 2025 when the government of St Kitts and Nevis announced it was stripping citizenship from 13 investors and the investors' dependents. The St Kitts and Nevis citizenship by investment unit also permanently blacklisted two major international marketing firms, Latitude Consultancy and RIF Trust, for promoting these illegal discounts.

Real Estate Fraud: Inflated Valuations and Phantom Properties

Real estate-based investment migration programs are particularly vulnerable to fraud, primarily through the manipulation of property valuation and the sale of non-existent assets.

In markets like Turkey and Egypt, schemes involving property valuations have become a significant concern. To qualify for citizenship, an investment must meet a minimum threshold confirmed by an independent appraisal. Certain program marketers have exploited this process by providing manipulated appraisals that show a property meeting the threshold when its actual market value is far lower. In September 2025, Turkish authorities dismantled a criminal network that had facilitated fraudulent real estate transactions for 451 foreign investors. The scheme involved investors receiving significant cash kickbacks after purchasing overvalued properties. As a result, all 451 investors now face citizenship revocation.

Even bolder CBI real estate fraud schemes exist. Fraudulent developers have promoted and sold properties in projects that are not officially approved by the government. These operators collect initial payments and then disappear. This leaves the investor with no property, no citizenship, and little hope of recovering funds.

The Shifting Landscape of European Investment Migration

The European Union has taken an increasingly hard stance against the risk posed by investment migration. The European Commission has argued these schemes threaten the security of the Union and create risks for money laundering, tax evasion, and corruption. These pressures have forced the EU to make significant changes in the investment migration landscape. The shift in practice has made more countries create programs that encourage investment in the economic makeup of the country rather than in real estate and beef up their due diligence. This change has created a tangible benefit for the country and its inhabitants before the golden visa or citizenship is granted.

Portugal's Golden Visa

Portugal's golden visa program has long been Europe's most popular residency by investment program due to Portugal being a popular destination and because of its low physical presence requirements. In October 2023, the government enacted the housing law which eliminated the popular real estate investment program. The program was restricted around regulated financial instruments such as investment funds which placed the program firmly under the supervision of the Portuguese securities market commission (CMVM) and EU anti-money laundering directives.

This shift to a regulated securities model has created a safer investment environment for golden visa applicants. However, the marketing of these programs still has many flaws. A particularly shocking example emerged in December 2025 when a multiyear Ponzi scheme that siphoned 37,000,000 Euros from golden visa investors was exposed. The IR group sold nonexistent luxury apartments while promising guaranteed high returns—a classic red flag in a regulated market.

Red Flags for Golden Visa Fund Investments

Investors in golden visa fund investments must be diligent and look out for the following red flags:

• Promised & Guaranteed High Returns: Publicly marketing specific returns or guaranteeing capital is a big red flag. Only licensed entities can discuss such terms.
• Unlicensed Fund Selling: Firms that are not licensed or authorized distributors are prohibited from marketing or providing detailed terms on specific equity funds.
• Blurred Advisory Roles: A single unregulated firm offering to handle immigration, financial, and tax advice is a major warning sign. In a regulated environment, there are completely different roles and specialties which require separate licensed professionals.
• Disregarding KYC/AML: Any agent who downplays the importance of Know Your Customer and Anti-Money Laundering documentation or promises a shortcut operating outside the law is not to be trusted. A compliant process will involve rigorous documentation of identity, source of funds, and professional background checks.

Other Common Fraud Schemes to Avoid

Fake Government Representatives and Phantom Programs

Sophisticated fraud operations frequently masquerade as official government programs or authorized representatives. These schemes exploit investors' trust in governmental authority through professional-looking websites, official-style documentation, and government-style branding. Legitimate CBI programs operate through clearly identified government agencies with verifiable contact information and published procedures. Investors should always confirm an agent's authorization through official government-published lists of approved representatives.

A related scam that has affected investors is the promotion of programs that do not exist. Fraudsters capitalize on investor confusion about European programs by promoting "EU citizenship" without specifying what jurisdiction they are talking about. Claims of obtaining EU citizenship for less than market pricing is invariably a scam and should be reported to authorities.

How to Protect Yourself

The investment migration industry is a complex and high-stakes environment. To navigate it safely, investors must adopt a mindset of extreme due diligence and skepticism. The following steps are crucial for protection:

• Engage Licensed and Reputable Professionals: Only work with qualified professionals and licensed investment migration consultants who have a long track record in the relevant jurisdictions. Use independent, licensed financial advisors to vet any investment.
• Direct Government Verification: Never rely on the word or claims of developers or agents. Independently verify all information through official government channels. This includes checking the official lists of approved investments, licensed agents, and minimum statutory costs on government websites.
• Scrutinize the Investment: Be wary of any investment that promises guaranteed returns or seems too good to be true. Interview fund managers or real estate developers extensively.
• Understand the Payment Structure: Legitimate programs align payment schedules with approval milestones. A demand for full upfront payment before your application is even submitted is a major red flag.

Conclusion

The investment migration industry has the potential to change lives for the better and create unique and rare opportunities if executed correctly. On the other hand, it has become a hunting ground for sophisticated criminals and a source of concern for international regulatory bodies. The cases examined in this article demonstrate that no jurisdiction is immune to these threats.

A compliant, credible approach to investment migration treats the process first and foremost as a legal and regulatory project. It involves working with properly licensed professionals that understand the boundaries of their expertise and verifying all claims through official government channels while maintaining a healthy skepticism toward any offer that seems too good to be true.

The golden visa can still offer a key that can unlock doors into a better and more fruitful life. However, investors must be ready to obtain it through legitimate means and lots of due diligence.

References

• Financial Action Task Force (FATF). (2023, November 22). Misuse of Citizenship and Residency by Investment Programmes. FATF
• Global Financial Integrity. Citizenship by Investment. GFI
• IMI Daily. (2025, April 8). St Kitts Revokes 13 Citizenships, Blacklists 2 Well-Known Marketing Agents. IMI Daily
• IMI Daily. (2025, September 28). Turkey to Revoke Citizenship for 451 Investors in CBI Real Estate Fraud Case. IMI Daily
• Transparency International. Ending corrupt abuse of EU golden passports & visas. Transparency International
• IMI Daily. Portuguese Golden Visa Pyramid Scheme. IMI Daily