Seven-year-old Daisy Cuevas, thrilled to see herself on television with U.S. First Lady Michelle Obama, didn't quite understand the predicament in which she had innocently placed her undocumented Peruvian parents.

"She laughed, she jumped up and down. She was excited" after the encounter at Daisy's suburban Washington, D.C., elementary school, the girl's maternal grandfather, Genaro Juica, told The Associated Press.

The TV appearance made the pigtailed second grader a voice of the estimated 12 million immigrants living in the United States illegally— and a source of pride for Peru's president, who visits Washington on Tuesday.

"My mom says that Barack Obama is taking away everybody that doesn't have papers," Daisy told the U.S. first lady on May 19 at the New Hampshire Estates Elementary School in Silver Spring, Maryland.

"Well, that's something that we have to work on, right, to make sure that people can be here with the right kind of papers," Michelle Obama replied.

"But my mom doesn't have papers," said Daisy, a U.S. citizen by virtue of her birth.

The color immediately drained from her mother's face. She ran crying to call her parents in Lima, then went into hiding, fearful of being deported.

These are tense times for people like Daisy's mother, a maid who arrived in the United States with her carpenter husband when she was two months pregnant with Daisy.

Daisy's parents are fearful of U.S.anti-immigrant sentiment, which for many Latin Americans is epitomized by an Arizona law taking effect in July that gives police the right to demand ID papers of anyone suspected of being in the country illegally.

The U.S. Department of Homeland Security has said it is not pursuing Daisy's parents. Immigration investigations, it said in a statement, "are based on making sure the law is followed and not on a question-and-answer discussion in a classroom."

Nonetheless, Daisy's mother asked the AP after the May 19 incident not to name her or her husband.

And Juica, heeding an attorney's advice, asked the news agency not to take photographs of him or other relatives in Peru.

Daisy, meanwhile, has become a celebrity in Peru.

"I'm really proud that a young girl of Peruvian origin is highlighting the enormous problem with Latin American immigration in the United States," President Alan Garcia told reporters last week.

He said it would be scandalous if her parents were deported.

"Do you know how much President Obama and Mrs. Michelle Obama would stand to lose?" he said. Garcia called the Arizona Law a "completely irrational response" to the illegal-immigration question, and said he would express his thoughts on the matter to President Obama during his visit to Washington.

An estimated 1.5 million Peruvians currently live in the U.S. Of those, three in five are either undocumented or in the process of legalizing their status, said Peru's consul-general in Washington, Cesar Augusto Jordan.

Peruvian Foreign Minister Jose Antonio Belaunde said in a Radioprogramas radio interview that he considers Daisy a "successful ambassador" for compatriots in similar predicaments.

While Daisy has automatic U.S. citizenship and lives full time with her parents, her 9-year-old sister, July, has not been so lucky. July was left behind with her grandparents when her parents moved to the United States to escape poverty.

The two sisters met for the first time last year when Daisy spent a month visiting her grandparents in the working-class San Juan de Lurigancho district of Lima.

But July misses her parents, who are unlikely to visit Peru because of their illegal status in the U.S.

July has only seen them in photographs and in video chats with a webcam.

"She cries," Juica said.

You've got half a million dollars. You crave the American dream. May I interest you in a green card?

This may sound like a back-alley deal, but this is the arrangement thousands of wealthy foreigners have made with the U.S. government. The EB-5 visa offers a path to citizenship in exchange for investing in an American business. The numbers of these types of visas issued in the past two years have tripled, and around half of the visas are being snatched up by wealthy Chinese.

You know those mini malls you see off rural freeway exits? Developer Justin Huang and his company YK America used to build them before the recession. These days, Huang's office feels kind of like a mini-mall purgatory. Huang points to one of the many project blueprints covering the walls — all of them are in limbo.

"In late '08, we got Bank of America to commit $50 million on this project, and in '09 they just said we can't help you anymore," Huang says. "That's it."

Getting Foreign Investment

Huang's now discovered a bail-out of sorts in the form of a tiny, obscure U.S. immigration program. The EB-5 visa offers permanent residency to immigrants in return for a half a million dollar investment into an American business, creating at least 10 new jobs in the process.

Businesses looking for these investors have to register with the U.S. government to be designated a so-called regional center. And that's what YK America has been doing to fund its projects.

"It's not really our primary job or business that we'd like to do. It's just, again, right now, we're in survival mode," Huang says.

At YK America's office in southern California, an employee discusses a project with a Chinese EB-5 visa holder. The office is located in a Chinese-themed mall. They've just hired five Mandarin-speaking employees to help find investors. They've recruited 14 so far and hope to have a hundred by the end of the year.

The Debate

Cornell University immigration law professor Stephen Yale-Loehr, says in this economy, the program is a win-win-win.

"It's a win for U.S. workers because they're able to get jobs through this program. It's a win for project developers and cities and states because they are able to get money that they wouldn't be able to tap into otherwise to fund their projects. And it's a win obviously for the foreign investors because it allows them to get a green card," he says.

But not everyone is a fan of EB-5 investors.

"Sure, we want their money, but that doesn't mean we want them," says Dan Stein, the president of the Federation for American Immigration Reform.

He adds, "If there was some evidence that they were actually doing something besides just ponying up some cash in exchange for a green card. But it's essentially a pay-to-play system: You put up the money, you get a green card."

Who Is Applying?

Even though the applicant pool has grown in recent years, there were only around 4,000 EB-5 visas issued last year. The U.S. estimates the program has generated $1 billion for the economy in its 20-year history. Lawyer Linda Lau helps companies with EB-5 applications. She point out that eight of 10 EB-5 visa applicants these days are Asian, and they're less interested in a green card for themselves — it's for their children.

"They would love to have them to be able to come here and be exposed to the U.S. way of living, education and doing business," Lau says.

Back at YK America headquarters, Huang has a chat with his newest EB-5 applicant: 22-year-old Wang Wei. Wei's student visa set to expire this spring, so his father is giving him a half a million dollars to invest in a mini-mall in the city of El Centro so that he can stick around.

The tall, spikey-haired Wei admits Dad's money may be helping him stay here, but it's not a job. These days, finding one of those is an entirely different challenge.