EB-5 Litigation Update Post #11: Behring Files Second EB-5 Lawsuit Against USCIS. EB-5 Regional Center Program Expiration Contrary to Law
Over the weekend, Behring Regional Center filed a second lawsuit against DHS and USCIS, and including the Department of State (DOS), because these agencies have wrongfully canceled the EB-5 regional center program and are unlawfully withholding adjudication of pending EB-5 petitions and visa applications.
One of our investors informed us that the law firm Wasden Banias determined that the EB-5 regional center program actually cannot expire, and that DHS, USCIS and DOS have, in fact, misinterpreted the statute for years. As a result, USCIS is wrongfully withholding processing regional center-associated petitions and DOS is refusing to issue EB-5 visa applications based on approved EB-5 regional center petitions. Our investor asked us if we might consider joining the lawsuit. We carefully looked into this issue and consulted the legal team at Wasden Banias. For various strategic and technical reasons, it made sense to bring a separate lawsuit parallel to the investor-led lawsuit brought by their team. Because of our prior experience with our attorneys at Greenberg Traurig, who represented us when we successfully vacated the 2019 EB-5 Modernization Rule on June 22, 2021, we thought it would be best to pursue our claims with Greenberg Traurig to follow up on the issues and content raised in the prior case. After careful consideration, we likewise concluded that these agencies are wrong and that Congress, in fact, intended on a permanent program, leaving only a predetermined set aside of visas to be time-limited.
February 18th Update and EB-5 Program Status
On February 18, 2022, the U.S. Senate passed a short-term Continuing Resolution extending federal funding through March 11, 2022. Congress has already agreed to the framework for the budget, and this extension is reported to primarily be logistical to give lawmakers time to finalize drafting of the multi-bill omnibus. It is expected to be passed in March.
Meanwhile, negotiations over a reform bill for the EB-5 program, including the regional center program, continue. These reforms include increases to the investment amount, integrity measures such as agency site visits and criminal background checks on regional center sponsors, and investor procedural measures, such as concurrent filing and advance parole. Behring continues to support a comprehensive reform bill that increases the integrity of program, but also makes the program more efficient so that investors’ petitions are processed timely and consistently. Importantly, any final reform bill must include grandfathering of existing investors according to the Program rules at the time of filing to prevent future disruption to thousands of EB-5 investors’ lives as they had to grapple with uncertainty over their EB-5 petitions and current visa status and the ramifications that USCIS’ wrongful halt of processing EB-5 petitions has brought.
We fully support EB-5 reform, but the existence of the regional center program should not be in doubt, and the existing 40,000 EB-5 investors who timely filed, made their investments into job-creating projects, and paid millions in fees to these agencies should not be held hostage to U.S. politics.
A Permanent Program is the Surest Means to Stronger Program Integrity
We have long argued that the most effective integrity measure is permanency. Erroneous sunset dates create rushes to beat an artificial deadline. Investors feel compelled to rush to file to preserve their investment amount and priority date. And bad actors – whether inferior regional center sponsors, agents, or other third parties – take advantage of a rush by withholding information, filing shoddy paperwork, etc. knowing that because of long processing times, USCIS won’t do its job and discover problems until it is too late.
Congress intended for the Regional Center Program to be permanent. Permanency provides stability and prevents dangerous deadline rushes. Permanency creates consistency that attracts institutional participation for higher quality offerings. Permanency maintains efficiency by enabling USCIS to avoid an influx of petitions or wasting time with additional review measures required for sloppy filings.
Behring’s lawsuit intends to correct agency misinterpretation of the statute and to order DHS, USCIS and DOS to recognize that the EB-5 regional center program is permanent and to continue processing EB-5 petitions and visa applications for new and existing EB-5 investor families.
Please contact Behring if you would like to learn more about its lawsuit against DHS, USCIS and DOS.