Updates (CR to 3/23, AAO sustained appeals, RC List)

EB-5 Legislation and Regulations
I’ve started a Washington Updates page off the Resources tab to keep track of what’s going on with legislation and regulations, and will revise it regularly as I hear about changes, in lieu of endless update posts. The page has details of regional center authorization (currently extended through March 23, 2018) and the immigration debate and new bills as they relate (or mostly do not relate) to EB-5.

AAO decisions: troubled RCs/projects

Do investor petitions fail when the project and/or regional center runs into trouble? Not necessarily, according to recent AAO decisions on EB-5 appeals.

  • In August 2015, the SEC filed a complaint against Path America companies including Path America Kingco LLC and Path America Snoco LLC. The case was settled in August 2017, with the former Path America principal receiving four years in prison. In the meantime, USCIS terminated Path America Kingco in March 2016, denied and revoked a bunch of Path America Kingco I-526 petitions starting in April 2016, and terminated Path America Snoco LLC in November 2016. Path America Kingco appealed its termination and was dismissed (JUN092017_01K2610), the PAK investors appealed their denials and were dismissed (e.g. DEC052016_01B7203, MAY112017_01B7203, JUL192017_01B7203), but Path America Snoco appealed its termination and was sustained (DEC212017_01K1610). PAK and PAS were terminated for malfeasance by the same former principal, but in the PAK case “he diverted proportionally more of the investors’ funds and the comparatively new management has only recently begun the process of renewing the project after its time in receivership.” AAO decided that PAS deserved to keep its designation because “the near completion of the project as proposed and the existence of a new owner committed to promoting future economic growth in the aggregate warrant maintenance of the regional center.” PAK has the same new owner, and the PAK and PAS situations appear to differ in degree more than substance, but at least AAO shows that it can give positive factors some weight. The PAS decision states that “There may be cases where, to maintain program integrity, the nature or degree of bad acts cannot be ameliorated or counter-balanced by positive factors of job creation and economic growth. For the foregoing reasons, this is not such a case.” Path America Snoco has been restored to the USCIS list of approved regional centers.
  • The PhoenixMart project by Central Arizona Regional Center has seen considerable drama and lengthy project delays. In 2017, USCIS denied a bunch of I-526 in the project, finding that “the business plan was not credible because construction did not substantively commence until years after the initially-forecasted completion date.” However, AAO just posted several decisions in the 2018 folder (JAN172018_02B7203, JAN172018_05B7203, JAN172018_06B7203, JAN172018_07B7203) that withdraw those denials, remanding the matter for further proceedings. AAO was impressed by evidence that the project has recently made substantial progress, and “Therefore, we withdraw the Chiefs finding that the business plan was not credible with regard to the construction portion of the plan.” (Reflecting its new sensitivity to return provisions, however, AAO takes the opportunity to bring up an issue not included in the USCIS denial: “whether the granting of first right of refusal to EB-5 investors for the purchase of up to 1,500 shops in ___ constitutes an impermissible redemption agreement.”)
  • The Palm House Hotel project has been the subject of numerous lawsuits and went into receivership in 2015. In 2016, EB-5 investors sued sponsor South Atlantic Regional Center and associated entities, alleging that the project was, in reality, nothing more than a façade pursuant to which their funds were stolen and distributed among the conspirators. However, the project has made some progress under the receiver, and at least two investors appealed their I-526 denials to the AAO (JUN132017_01B7203, JAN172018_03B7203). AAO denied the motions, but in a way that leaves open the possibility that the outcome might have been different had the petitioners presented better documentation regarding availability of funds to complete the project.

LucidText in the news
Suzanne Lazicki is featured in the latest EB5 Investors Magazine as one of the Top 5 Business Plan Writers of 2017, and in a podcast with Mona Shah discussing business plans and the current EB-5 landscape.

Regional Center List Changes
Additions to the USCIS Regional Center List, 12/05/2017 to 02/02/2018

  • Awesome American Regional Center LLC (California, Nevada)
  • Commuter Center Regional Center, LLC (Washington)
  • Florida Capital Group Regional Center (Florida)
  • Grand Commonwealth Regional Center, LLC (California)
  • Hawaii Investment Funds, LLC (Hawaii): www.hawaiieb5.com
  • Live in America – Louisiana Regional Center, LLC (Louisiana): www.liveinamerica.us
  • Midtown NYC Regional Center, LLC (Connecticut, New Jersey, New York)
  • Mugo Regional Center LLC (Connecticut, New Jersey, New York, Pennsylvania)
  • North American Asset Management Regional Center, LLC (Washington)
  • Polaris Regional Center (Guam)
  • Stonehenge Regional Center, LLC (Texas)
  • TS Pacific Regional Center (California)
  • Texo Capital, LLC (Ohio, Pennsylvania): www.texoeb5.com

Additions to the Regional Center Terminations page, 12/05/2017 to 02/02/2018

  • Greater Houston Investment Center, LLC (Texas)
  • Lansing Economic Development Corporation (LEDC) Regional Center (Michigan)
  • Maryland Area Regional Center, LLC (Maryland)
  • Liberty South Regional Center (Arkansas, Mississippi)
  • Southeastern Higher Education Regional Center (South Carolina)
  • EB-5 Fund CA, Inc. (California)
  • EB-5 Regional Center Florida, LLC (Florida)
  • America Development Investment Center Regional Center (Alabama, Georgia)
  • Florida East Coast Regional Center, LLC (Florida)
  • Lakewood Regional Center a/k/a American Life, Inc. – Lakewood Regional Center (Washington)
  • American Logistics [International] Regional Center (California)
  • South East Los Angeles RC (SELARC) California (California)
  • Southwest Florida Regional Center, LLC (Florida) (terminated 5/25/2017 but not listed until 1/30/2018)

Previously listed as terminated, but now restored to the list of approved regional centers:

  • ON Regional Center, LLC (California)

About Suzanne (www.lucidtext.com)
Suzanne Lazicki is a business plan writer, EB-5 expert, and founder of Lucid Professional Writing.

27 Responses to Updates (CR to 3/23, AAO sustained appeals, RC List)

  1. Rommy says:

    Hi Suzanne,Is it possible to find the data of pending I 526 per country ?

    • You could file a Freedom of Information Act with USCIS to request this data, and might get it after 1.5 years. IIUSA has a spreadsheet of I-526 receipts, approvals, and denials by country from 1991 to 2016 (obtained via FOIA request). You could purchase that from IIUSA, and try to calculate pending petitions from those numbers.

      • Rommy says:

        Thank you for quick response, The reason I post this question here to know when India will be having cut off date for visa allocation ? I already have approved EB2 petition which would never see a date in next 40 years, I fear that what if same happens to my EB5 application if it gets approved in a future. From your experience and vast knowledge on this subject , when do you think India will have a cut off date for EB5 application ?

        • According to the IIUSA data, there were 354 I-526 receipts from Indians in 2016. Any one country is limited to 696 visas (7% of 9940 EB-5 visas) when the category is oversubscribed. So if Indian investors who filed I-526 in 2016 applied for visas in 2018, and each investor had 2+ family, then India could get a cut-off date in 2018. (Or 2019 is more likely considering slow I-526 processing time.) However, the cutoff shouldn’t be in place for long because India would not be very far over the limit and there aren’t so many applicants from countries besides China, Vietnam, and India. You can study the data on the 2.Visas tab of my backlog spreadsheet: https://www.dropbox.com/s/gjgkr1kjtcj8tf2/BacklogCalc.xlsx?dl=0

      • Rommy says:

        Thank you Suzanne for sharing the link ,I will wait for FY2017 data to publish in your document which will help me to analyze the demand of India ahead.

      • FYI, I went back to the IIUSA data and summed total India I-526 receipts and approvals from the beginning of time to FY2016. Result: 1,270 receipts, 457 approvals. The difference would be the number of withdrawn, denied, and still-pending I-526.

      • Rommy says:

        Thank you for putting this information for us, Its really helpful ,so If I understood correctly,Total 1270 receipts from oct 15- sept 17 time period, and each I 526 will have a demand for 4 visa so 5080 total visa will be needed for Indians,Seeing this number it seems , year 2019 will have cut off date for India too,

  2. geeta says:

    Hi Suzanne
    The backlog spreadsheet shows that there are 307 pending visa applications from India as of Nov 2017. Does this number only include the 2016 i526 applicants or it includes all the applicants that have filed their i526 as of Nov 2017.

    • Rommy says:

      To my knowledge it shows the data of i 526 from oct2015 to sept16

    • Visa applications and I-526 petitions are different queues. The average EB-5 investor recently spends 2 years in the I-526 queue after filing I-526, then on approval submits a visa application and moves to the visa application queue. So in theory, people with pending visa applications in 2017 probably filed I-526 in 2015 or earlier. But in practice there’s date variation because USCIS isn’t good at processing petitions in FIFO order. See the table starting in Column Q Row 12 on Tab 2 of my visa backlog spreadsheet for a breakdown of visa applications by I-526 priority date for several countries. (The source presentation for that table did not mention India.)

  3. Minh Vo says:

    Hi Suzanne,
    I come from Vietnam. I have one son. His birdthday is 21 Nov 1997 and he is now studying in US.
    I am going to invest for EB5 Programe in next month. Will my son be aged-out due to possible backlog in the future?

    Thank you

  4. raj says:

    hi suzane
    thanks fr your prompt replies

  5. Raj says:

    This might be a silly question, but as per the govt website it says “On January 22, 2017, the President signed Public Law 115-120; extending the Regional Center Program through February 8, 2018.” So technically EB-5 program ended yesterday. Or is it extended? How do we know?

    • I’ve added an explanation on my Washington Updates page of the language tracing regional center program authorization to today’s CR. I expect the USCIS website to be updated soon. But it is confusing. I received a report of one embassy that cancelled an EB-5 visa interview for Monday because they hadn’t yet received official confirmation this morning that the regional center program was reauthorized.

  6. Francesco says:

    Good afternoon Suzanne and thanks for your help, i am an Italian Eb-5 investor and i had case complete from Nvc the Dec 29. I am still waiting for the interview, but as you can imagine i am concerned about the future. What could be happen if they don’t reauthorize the RC? Thanks for your precious help.

  7. rashkender says:

    hi sussane a small query is the direct investment eb5 on tea areas have similar quotas annually .can you please put more light on this thanks ina dvance

  8. rashkender says:

    i mean like you have quotas for indians say 7% and in this 7% is there any sub quota for direct investors on tea areas also. kindly clarify

    • Under current rules, the annual quota is 9,940 visas for the entire EB-5 category. There are two restrictions on that quota: (1) that any one country only has a right to 7% of visas when the category is oversubscribed and there are people from other countries in line, (2) that 3,000 visas are reserved for investment in a TEA, and 3,000 set aside for investment in a regional center. There are no specially-reserved visas for direct investment. Congress could change the rules at some future point (new TEA set-aside visas have been suggested by some), but they haven’t been changed yet.

      • Rashkender says:

        Thank you Suzanne that means out of 9940 eb5 visas 3000 are reserved for regional so balance 6940 are reserved for direct eb5? I hope understanding is correct and if the balance 6940 are unused for direct eb5 then it goes to regional centers ?

        Also are u sure there is no quota for Tea investors

        Thanks in advance

  9. Rashkender says:

    Thanks a lot suzzane
    That means for
    Direct eb5 the subscription is never reached its limit like for regional centers mightbe

    Since as per your above balance 4000 visas are in general pool and never crossed this quota

    Also how
    Does usics differentiate between direct eb5 petitions and regional petitions from receipt number

    • raj says:

      suzanne waiting for your reply to above query please

      • Regarding the visa quota: I don’t know how the RC and TEA set-asides work exactly since they have never been tested and the statute doesn’t give much detail (ie doesn’t specify whether or not the reserves are cumulative, and how the RC set-aside coordinates with the TEA set-aside). It’s my understanding that if there were 7,000+ direct EB-5 visa applications in one year, then the applications over 7,000 would be held back to let all RC applications up to 3,000 go first — and likewise for the TEA set-aside. The 3,000 reserve for RCs is not a quota for RCs — it’s just a guaranteed minimum available for RC applications.

        I don’t know whether USCIS codes the RC/direct distinction in receipt numbers.

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