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What happens to the EB-5 investors if the USCIS terminates the regional center they have chosen to work with?

What are the options for investors with pending I-829s when their affiliated EB-5 regional center has been terminated by USCIS? Unfortunately, this is not something in the control of the investors but can be devastating for them. Also, the legal material on this issue is extremely scarce. Are they going to deny all I-829s automatically even if some jobs have been already created? Will we have a chance if we take the case to immigration court and argue that the investment requirements (i.e. the creation of jobs) have been fulfilled?

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    Answered on

    It will depend on the argument. USCIS is fond of saying that the case must be eligible at the time of filing so if the I-829 is filed while the RC is active, it is possible it may go through just fine. However, it will depend on the specifics of the case, which should be handled by an experienced attorney.

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    Answered on

    That would depend on the reason for the termination of the Regional Center. In cases where fraud is the reason for shutting down of the regional center, pending I-829s would not be adjudicated and unless there are extenuating circumstances. The investors may have to start the I-526 Petition over. Your immigration attorney should be able to discuss the ramifications and solution.

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    Answered on

    The general rule is the investors associated with a demise project are likely to lose the opportunity to file I-829 since there is nothing to back up their claims for permanent residency. A case-by-case may have to be made in such a scenario. This is not a very common scenario. In the event there is a possibility of this scenario, consult an EB-5 attorney to analyze all options. Also, there should be a thorough analysis of the business in question, particularly of the likelihood of fraudulent behavior by the operator(s) of the business enterprise.

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    Answered on

    This is a difficult question to answer because there are no regulations to determine how the USCIS must act in such a situation. That leaves us with the option of good faith and substantial compliance. The legal argument for the investors will be that they acted in good faith and substantially complied with the requirements for condition removal. For example, if an investor sustained his or her investment and created the requisite jobs during the conditional period, then it should not matter legally if USCIS terminates the regional center designation. There could be a problem, however, depending on the underlying reason for the termination of the regional center. If the regional center was terminated because it went bankrupt, committed fraud, or did not create the required jobs, then some of the investors may be out of luck. In that situation, the investors will have to plead their case in immigration court or in federal court.

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    Answered on

    The termination of a regional center would be terrible and is actually a very rare occurrence. The USCIS terminates regional centers for two reasons. First, for failing to invest in any projects as required by the original approval from the USCIS. Second, for operating fraudulently. Your question presupposes the latter scenario since there would be economic activity. As for what options the investors have, the best answer is to seek an alternative regional center already approved in the geographic area of the project to sponsor the project through USCIS''s adjudication of all I-829 petitions. This is the best possible outcome for the investors.

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    Answered on

    If the USCIS terminates the Regional Center prior to the approval of the Removal of Conditions Petition on Form I-829, the investor would have a very serious problem given the fact that the investment funds must remain invested until the I-829 petition is favorably adjudicated. Under current law, an EB-5 investor case cannot be transferred from one Regional Center to another during either the initial I-526 petition stage or the I-829 removal of conditions stage. The EB-5 investor would most likely have to start all over again by refiling a new I-526 petition with a new Regional Center sponsoring the projectunless the USCIS decides that changing Regional Centers is not a material change.

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    Answered on

    Your question is a good one, as there is indeed a lack of clarity on issues such as the ones you have raised. That being said, the termination of the Regional Center will require the investors to work together to find another Regional Center to take over the project. This is not as easy as it sounds, as the terminated Regional Center will likely want to remain in the project and get paid for whatever it says it has done to move the project along. If all investors in the project (or at least a majority of them) agree on a course of action and have a Regional Center ready to take things over, they would need to go to Court, have the involvement of the Regional Center in the project terminated (or confirmed as terminated) and have the Court order that the new Regional Center take over the project. People who had pending I-829s that were filed during the involvement of the former Regional Center may well be able to still show job creation, but its termination will not help the veracity of any information that has been provided to USCIS in the past. Challenging a determination like this from USCIS is fraught with uncertainty and is likely cost prohibitive. This is why, in such situations, the investors acting as a group to replace the Regional Center would appear to be a valid option. Whatever the case, you can and should speak with a skilled U.S. securities litigator with immigration experience to deal with both the Regional Center issues, as well as any potential fraud/negligence/conversion issues. Do not try to do any of these sorts of things on your own or even with the counsel that the old Regional Center recommended to you (as there may well be an inherent conflict of interest).

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