USCIS Debuts Online Regional Center Termination Hub
In a message sent to stakeholders today, U.S. Citizenship and Immigration Services (USCIS) unveiled a new feature on its website: an up-to-date database of Regional Center termination notices. Regional Centers, which are part of the Immigrant Investor Pilot Program, are qualifying vehicles for investment in a commercial enterprise for purposes of an EB-5 visa application.
Overview
Disclosing for public consumption this information builds off comments that Nicholas Colucci, the Immigrant Investor Pilot Program Office Chief, made during an EB-5 stakeholder engagement earlier this spring. During the teleconference, Colucci previewed the online hub, characterizing it as “in keeping with our commitment to transparency in the EB-5 program” and serving to inform “investors, the EB-5 industry, and the public” the reasons for rescinding designation of Regional Center status. Publishing the information centrally also precludes the need for individuals to file Freedom of Information Act (FOIA) requests, which are time-consuming for both federal agencies like USCIS and for information-seekers themselves.
The database includes copies of official, USCIS-issued Regional Center termination notices, as well as dates of the rescissions, and names of and agents associated with the now-defunct Regional Centers. Termination notices themselves contain a wealth of interesting information, including the underlying reasons for stripping Regional Center status. An example of the most recent termination notice USCIS has uploaded can be viewed here.
Process
Designation of an EB-5 commercial enterprise as a Regional Center in the Immigrant Investor Pilot Program is granted by way of an approved Form I-924 (Application for Regional Center Designation under the Immigrant Investor Program). Investing in Regional Centers is particularly attractive to EB-5 beneficiaries because the capital requirement of $1 million is reduced to $500,000.
Broadly speaking, 8 CFR § 204.6(m)(6) gives USCIS the authority to rescind Regional Center designation. This statute underlines the purpose of the EB-5 visa, which is “promoting economic growth, including increased export sales, improved regional productivity, job creation, or increased domestic capital investment.” Regional Centers shirking this overarching requirement are, unsurprisingly, readily deemed ineligible to serve as EB-5 visa investment options.
When a Regional Center has jeopardized its designation by failing to submit required information to USCIS or by failing to serve the purpose of economic growth, USCIS sends said Regional Center a Notice of Intent to Terminate. This notice provides the Regional Center 30 days to offer evidence in opposition to the grounds for a potential termination from the program. Failure to respond to this notice or failure to sufficiently rebut the grounds listed in the notice result in USCIS’s issuance of a Notice of Termination (which itself may also be appealed).
Analysis
A review of the more than 30 published Regional Center termination notices dated between January and December 2016 reveals that the vast majority of these Regional Centers were terminated from the program as a result of basic inactivity. Most of the notices indicate that the Regional Centers had no capital investment or job creation to report for their years in operation, and similarly had no Form I-526s (Immigrant Petitions by Alien Entrepreneur) or Form I-829s (Petition by Entrepreneur to Remove Conditions on Permanent Resident Status) associated with them on file.
Notably, just one of the Regional Center termination notices of the roughly three dozen reviewed reflected the high-profile episodes of fraud and abuse that have given the EB-5 visa its controversial reputation. This termination notice, dated February 2, 2016, and addressed to Luca Energy Fund, LLC, includes a slate of severe allegations against the enterprise and its principals and officers:
-The Regional Center was effectively “running a Ponzi-like scheme,” according to the notice.
-The Regional Center principal “diverted EB-5 funds to purchase a $2.5 million home, pay for a family vacation to Hawaii and a golf junket, pool and gardening services, and three luxury vehicles,” according to the notice.
-As the notice describes, the Regional Center and associated enterprises filed for Chapter 11 bankruptcy on the same day a federal district court barred several of the people associated with the Regional Center from “participating in the routine business activities required.”
Last summer, on July 6, the U.S. Securities and Exchange Commission (SEC) announced that it had secured a sizable settlement against Luca Energy Fund, LLC and related entities: a nearly $70 million judgment. To view the termination notice that preceded this judgment, click here.
Our Thoughts
Foreign investors are among the thousands of clients our experienced attorneys have successfully represented over the past 20 years. A considerable portion of our EB-5 clients, in fact, have chosen to make their requisite investments in Regional Centers.
Like many, we’re generally in favor of increased transparency, and we accordingly applaud USCIS’s step in this direction today. We would even more emphatically welcome an indication of the future of the Immigrant Investor Pilot Program, however. Though Congress first authorized it in 1992, in the intervening 25 years, our representatives have failed to permanently codify the pilot program in immigration law. Instead, as we reminded our readers last month, the program has been kept alive through recurrent, short-term reauthorizations, the most recent of which expires on September 30, 2017.
If you are interested in applying for an EB-5 visa—particularly through investment in a Regional Center, while the pilot program still exists—our seasoned EB-5 attorneys are available for a free consultation with you. You can begin a conversation with us about your immigration plans by clicking here.
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Former U.S. Consular officer, Attorney Sechyi Laiu joined Zhang & Associates, P.C. on June 26, 2017
At Zhang & Associates, P.C., Attorney Laiu specializes on Consular Processing cases and business development. Attorney Laiu also focuses on TN visas, E visas, CBP administrative proceedings (monetary confiscation, deferred inspection), and overseas financial compliance.
Prior to joining Zhang & Associates, P.C., Attorney Laiu worked for the U.S. Department of State as a Chinese and Portuguese speaking diplomat. As a consular-coned officer who served in Vancouver (Canada), Shenyang (P.R. China), and Rio de Janeiro (Brazil), Attorney Laiu processed over 30,000 visa cases and worked in every section of Consular Affairs overseas (Fraud Prevention Unit, Immigrant Visas, Non-Immigrant Visas, and American Citizen Services).
He will use his experience and expertise to deliver the highest quality of service to our clients.
Founded in 1996, Zhang & Associates, P.C. offers legal services to clients nationwide in all aspects of U.S immigration law. We have successfully handled thousands of immigration cases.
At Zhang & Associates, P.C., our attorneys and supporting professionals are committed to providing high-quality immigration and non-immigration visa services. We specialize in NIW, EB-1, PERM, and I-485 cases. In the past
twenty years, we have successfully helped thousands of clients get green cards. If you plan to apply for a green card, please send your CV to Attorney Jerry Zhang (info@hooyou.com) for a free evaluation.
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(05/31/2017)