EB-5 stakeholders ’ conferences February 26 , 2014 EB-5 Stakeholders ’ Teleconference
USCIS held its long-awaited EB-5 stakeholder teleconference where Nicholas Colucci , the new chief of the EB-5 program office , began discussions with updates on the EB-5 program , addressed the goals and challenges that his division faced , and ended the session with a Q & A segment . Some of the notable highlights included :
Washington , D . C . Office : Starting February 2014 , all Form I-924 applications and I-526 petitions will be adjudicated in the new Washington , D . C . office . Form I-829 petitions and EB-5-related adjustment of status applications will continue to be adjudicated at the California Service Center .
Processing Times 1 : There are plans to update processing times on a monthly basis and goals to achieve better processing times for I-526 and I-829 petitions by the end of this fiscal year , with even faster processing times for I-924 applications .
Electronic Filing (“ ELIS ”): USCIS has now implemented the use of the online case filing system , ELIS , for the intake of I-526 petitions . Further details are to be provided at future stakeholder meetings .
Regional Center Geographic Scope : Pursuant to the May Memo , regional centers can now sponsor projects beyond the industry and geographic scope for which they have been approved , provided that it meets certain conditions , including geographic proximity . It was explicitly noted that a California regional center cannot sponsor a New York project .
Bridge Financing : It was reiterated that per the May Memo , the replacement of bridge financing with EB-5 investor capital should generally have been contemplated prior to acquiring the original financing . However , even if this was not contemplated prior to acquiring the temporary financing , so long as the financing to be replaced was contemplated as shortterm financing , the infusion of EB-5 financing could still result in the creation and credit of new jobs .
Guest Expenditures : Jobs created by hotel guest expenditures may be credited : ( 1 ) to meet unmet aggregate demand ; ( 2 ) in the absence of existence of comparable facilities ; and ( 3 ) in response to the demand generated by another establishment such as a sports arena .
April 23 , 2014 EB-5 Stakeholders Teleconference
USCIS held a teleconference to solicit feedback in improving and clarifying current EB-5 regulations . Some of the highlights from this stakeholder input session include : implementing premium processing ; regional center liability for overseas broker misrepresentations ; allowing direct investment projects to calculate and include indirect and induced jobs ; and releasing up-to-date information relating to I-924 and I-526 RFEs to provide more guidance to applicants . In a one-way interaction , USCIS listened to speakers but gave no specific answers or direction on what is to be expected in new regulations to come .
Due diligence
In light of the aftermath from the Securities and Exchange Commission ( SEC ) enforcement lawsuits brought in 2013 , many foreign nationals have grown increasingly focused on conducting due diligence on all of the EB-5 program ’ s components , including the regional center , project , and managing principals . The seminal case , SEC v . A Chicago Convention Center , et al ., which was the first SEC action filed under the EB-5 program in February 2013 , also reached a final judgment this quarter as the defendants were ordered to disgorge $ 11.5 million in proceeds and pay $ 3.9 million in civil penalties to settle the lawsuit without the defendants admitting or denying allegations . As I covered in my last series , this lawsuit involved a fraudulent investment scheme in which the defendants allegedly sold more than $ 145 million in securities to prospective EB-5 investors . The investors all received their capital investment money back but not the administrative fee .
Conclusion
These past two quarters have not only proven to be eventful , but also shown very positive interest and acceptance indeed . With improved processing times and more transparency in the new EB-5 program developments , the federal program has proven that it is , once again , a stimulator to the U . S . economy at almost no cost to U . S . taxpayers . To date , the agency estimates that the program has raised $ 8.6 billion and created at least 57,300 jobs since 1990 , with intentions of increasing these numbers in the years to come .
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David Hirson would like to acknowledge Katie Wu , Associate Attorney , Fragomen , for her contribution to this article .
1
Please note that at the time of publication , published processing times were : 13.2 months for I-526 petitions ; 8.9 months for I-829 petitions ; and 10.6 months for I-924 applications .
David Hirson is managing partner at David Hirson & Partners , LLP . There he leads a dedicated team of EB-5 legal professionals to provide a full scope of services for investors , projects and regional centers . David can be reached at dhirson @ hirsonimmigrationlawyers . com
David Hirson
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