In an extremely odd turn of events in court yesterday for Behring’s second hearing in its lawsuit to stop USCIS from deauthorizing EB-5 Regional Centers, USCIS flip flops on their position regarding last years EB-5 Regional Center program expiration and appeared to agree with Behring that the EB-5 Regional Center Program did not lapse after June 30, 2021.
Learn about Behring’s current lawsuit. What is Appropriate Remedy for Behring?
Prior to the hearing, the court specifically requested that the government be prepared to explain “on what statutory authority was [USCIS] able to oversee and collect fees from the Regional Centers during the periods following the December 2018 sunset [government shutdown] and the June 2021 sunset.”
When responding to this question, the government’s attorney said that USCIS had authority to oversee and collect fees from the Regional Centers based on Section 610(a) of the 1993 Appropriations Act. The government stated that because it was Subsection (b) (that creates the visa set aside for Regional Centers) that lapsed, the basic structure of the Regional Center Program, established by Subsection (a), remained.
The court was visibly surprised while the plaintiff Colin Behring almost fell out of his chair, when both USCIS openly confirmed what Behring claimed all along in its prior lawsuit. The two parties seemingly agreed that the Regional Center Program remained intact under Section 610(a) after the sunset. The judge directly asked: “If that is correct, then only the 3,000-visa set aside expired, but the [EB-5 Regional Center] Pilot Program remained?” In response, USCIS said it read Subsection (a) to create the Program, while (b) established the numerical visa limits, but that Subsection (a) enabled USCIS to continue to monitor the Program after the sunset. However, in reality, any EB-5 practitioner knows that is not even remotely true.
Previously, Behring filed its second lawsuit against USCIS in February 2022, challenging the validity of the lapse with this exact argument. There, Behring similarly pointed out that it was only the visa set-aside (incentive-based visas) reserved for Regional Centers that had lapsed, but the Regional Center Program established by Subsection (a) continued and that while Regional Center-associated applications no longer had visas set aside as an incentive, USCIS still had authority to issue visas based on Regional Center-associated applications under the general pool.
Of course, USCIS certainly would not have adopted this position at the time Behring filed the second lawsuit. Moreover, before shifting to issues more relevant to the current lawsuit, USCIS indicated that it interprets Subsection (b) differently and that there is a difference in “visas” and “visa numbers.” That cannot be true as that would suggest there was a numerical limit of 3,000 visas available to the Regional Center program, whereas USCIS and the Department of State have been repeatedly offering the entire EB-5 visa pool of 10,000 visas directly to the Regional Center program as Regional Center investor petitions have outnumbered direct investors exponentially.
Nevertheless, Behring was given a moral victory, reinforcing it made the right decision to file its claim. After the enactment of the EB-5 Reform and Integrity Act of 2022, Behring voluntarily dismissed its lawsuit because the issue was rendered moot. But Behring will continue to lead in holding USCIS accountable in properly administering the EB-5 Program.
However, if the program never expired, why were tens of thousands of investor and regional center petitions thrown into a closet and “held in abeyance” when they could have been adjudicated?
USCIS has invited tens of thousands of petitioners to file mandamus actions as their adjudications were wrongfully withheld from the period of July 1, 2021 to March 15, 2022. Why did USCIS make this claim? During the purported expiration, USCIS was still forcing over 630+ “expired” regional centers to pay an annual fee of $3,035, a combined $1.97 million in fees for no service. Behring’s current lawsuit attacked this wrongful profiteering by USCIS, and when a judge asked them directly point blank, “what authority did you have to collect fees at this time?” USCIS answered simply that the program never expired… USCIS trying to have it both ways has potentially exposed the agency to battle thousands of mandamus actions, lawsuits and demands for refunds.
The damage USCIS has caused with unilaterally implementing a “false sunset” decimated the EB-5 industry no less than 27 times over 7 years. And it caused the very problems that the EB-5 Reform and Integrity Act was intended to solve. It also gave leverage to those who opposed the EB-5 Industry Consensus bill proposed by Chairman Nadler and a host of Congress members and eventually resulted in the complete mess in the 2022 EB-5 Reform and Integrity Act.