By: Joseph Barnett
In December 2019, the U.S. District Court for the Western District of Washington found that USCIS’ termination of a Regional Center was arbitrary and capricious and ordered USCIS to reopen and re-adjudicate the I-526 petitions associated with the regional center. This is one of the first federal court cases which interpreted USCIS’ Immigrant Investor Program Office’s (“IPO”) “positive and negative indicators” test to balance whether a regional center is continuing to promote economic growth.
In March 2016, IPO terminated the regional center’s designation after determining (1) it was no longer serving the purpose of promoting economic growth, (2) had diverted funds from job creating purposes, and (3) had not met the monitoring and oversight responsibilities set forth in its designation letter. A lengthy adjudication by the Administrative Appeals Office (“AAO”) affirmed IPO’s decision, despite new evidence that bad actors were removed and that a receivership was appointed, and job creation continued.
The court ruled: “Just because a regional center failed to promote economic growth for a short period while management changed hands does not mean that the regional center has not continued to promote economic growth after that point, when it in fact provided jobs on a successful construction project.”
The case also shows how, in certain circumstances, criminal actions of a third party should not dictate the outcome of individual investors’ EB-5 cases and may not serve as grounds to terminate a regional center’s designation.
With the new regulations increasing the minimum EB-5 investment amount to $900,000, and to $1,800,000 for investments not located in a TEA, very few investors are filing new I-526 petitions, making it extremely difficult for regional centers to raise money. Thus, this decision is critical in ensuring the survival of regional centers in this new era.