EB5 Investors Magazine Volume 2 Issue 1 | Page 76

Continued from page 72 I-924, clearly demonstrating how a regional center will promote growth and job creation in a specific area of the United States, and providing verifiable detail of how the center will create jobs. Because the Form I-924 projects can be “hypothetical” projects with just general proposals and predictions, the number of designated regional centers has grown to nearly 450 from 20 since 2007. Not only has the number of regional centers exploded, but also interest in the program. USCIS reported that the number of applications being submitted through regional centers has more than quadrupled from 2009 to 2012. Despite attempts to strengthen the program and protect against its misuse, some actors still try to abuse the program for personal gain. The recent Chicago case reverberated throughout the industry and recalled early scandals. The SEC cracked down on A Chicago Convention Center, announcing charges in February 2013, for misleading investors, falsifying documents, and pocketing investments.10 The case demonstrates the program’s vulnerability, but also the SEC’s and USCIS’s focus on oversight, regulation and security. Though the scandal had a chilling effect on the industry, and has made investors more cautious, the regional center program continues to develop and nurture success stories. Because many of the early setbacks stemmed from unclear regulations, stakeholders in the industry have pushed USCIS to issue clear guidelines on the program. In what may be the most illuminating policy release to date, USCIS clarified their position on key aspects of the EB-5 program in their EB-5 Adjudications Policy Memorandum issued on May 30, 2013.11 While a number of the stipulations applied directly to regional centers, the general clarity offered by the May memo has allowed regional centers to operate with more realistic expectations and consistency. Steady success and growth over the past decade has not protected the EB-5 program from political attacks. Senator Chuck Grassley (R-IA), ranking member of the Senate Judiciary Committee, has reservations regarding the EB-5 program, particularly in light of former USCIS director Alejandro Mayorkas’s nomination and subsequent confirmation to a high-level position at the Department of Homeland Security. Furthermore, the Office of the Inspector General, an arm of the Department of Homeland Security, recently released a report on their audit of the EB-5 program, concluding that USCIS was incapable of appropriately administering the regional center program. The report was criticized for ignoring key reforms that USCIS had made in recent years to strengthen the program and increase security. Nonetheless, the report issued four recommendations that included updating regulations to give USCIS the authority to terminate regional center status, establishing interagency cooperation, measuring the economic effects of the program, and establishing quality assurance checks (for further discussion on this report see The Tug of War Between the Hill and the Agency on page 22). the program, especially in light of the comprehensive immigration reform debate. Some of their suggestions include regulating the gerrymandering of TEAs,12 increasing the minimum required investment each year according to the Consumer Price Index,13 and hastening USCIS’s adjudication process. One of the biggest frustrations for regional center operators and investors is lengthy USCIS processing times; developers are often paralyzed and forced to sit on funds in escrow until investors’ petitions are adjudicated. It is hoped that in streamlining the adjudication process, clarifying regulations, and disseminating information about the program, USCIS can handle the applications more quickly. Though the regional center program has grown over the