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Recap of the Feb. 3, 2016, EB-5 Program Stakeholder Engagement

Posted in EB-5 Investment, EB-5 Program, Immigrant Investor, USCIS

The USCIS Immigrant Investor Program Office (IPO) held its first stakeholder engagement of 2016 on Feb. 3. Primarily speaking for USCIS were Nicholas Colucci, Chief of the IPO, Julia Harrison, Deputy Chief of the IPO, and Laurie McKenzie, the new Division Chief of Policy and Performance.

Processing Times and Backlog Reduction Issues

As has been the case of the past 2 years, the IPO continues to expand its staffing. Staff levels currently stand at 113 and are expected to be increased to 171 by the end of the fiscal year. This is being done with the goal of reducing case processing times to under 6 months.

However, as of Jan. 26, 2016, the preliminary processing times reported by Mr. Colucci were 15.5 months for I-526 Petitions, 7.9 months for I-924 Applications, and 15.7 months for I-829 Petitions. These are expected to increase as the IPO currently has 21,790 pending I-526 Petitions, 902 pending I-924 Applications, and 4,314 pending I-829 Petitions. If each I-526 Petition represents a $500,000 investment, that would equate to approximately $10.895 billion worth of capital potentially waiting to be deployed in the U.S. Additionally, even assuming only 90 percent of the I-526 Petitions will be successful in creating 10 U.S. jobs, 19,611 (90 percent of 21,790) I-526 Petitions equates to approximately 196,110 U.S. jobs potentially held in the balance as the IPO works through this backlog.

Mr. Colucci expounded on the recent rise in processing times being attributed to the incredible volume of I-526 Petitions filed prior to Sept. 30, 2015 and Dec. 11, 2015, as well as the IPO’s desire to adjudicate the oldest pending cases. Mr. Colucci also discussed the fact that senior adjudicators spent time training many junior individuals to handle complex cases so that processing times could decrease in the future.

Regional Center Compliance and Other Issues

With respect to regional center matters, Mr. Colucci expanded on the compliance division he previously announced to review Form I-924As, the annual compliance filing for regional centers. He also reported that seven (7) notices of intent to terminate for failure to promote economic growth have been issued to regional centers. It appears most of these likely dealt with fraud allegations or other impermissible uses of funds (i.e., spending EB-5 funds on recruiting trips to China, commission payments to agents, etc.). However, the majority of terminations are still for those regional centers who simply fail to file.

Mr. Colucci also reported that 25 regional centers had changed their names at the request of USCIS and 18 had removed the Department of Homeland Security seal from their logos or marketing materials. In order to ease this process, Mr. Colucci stated that the USCIS website, which lists regional centers, now includes ID numbers and former names. Unfortunately, this information is not yet listed in the HTML list but in a separate PDF link accessible on that page.

Mr. Colucci also noted that USCIS was expanding its site visit program where Fraud Detection and National Security offices would make unannounced visits to sites of projects or addresses of the new commercial enterprise or job creating enterprise. He also stated that the IPO is developing an audit program for auditing a regional center’s records. This audit program could include site visits to a regional center’s designated address for auditing purposes.

Ms. Harrison provided helpful guidance that if a regional center is terminated, an EB-5 investor in conditional permanent residency will not have his or her conditional permanent residency terminated or revoked. The EB-5 investor will still have the opportunity to apply for removal of conditions. However, when questioned about whether this would apply to someone with a pending I-526 Petition, or someone with an approved I-526 Petition who had not yet entered the U.S., the IPO deflected.

Lastly, despite multiple callers requesting this information, USCIS reiterated that it has no capacity or plans to break out processing times for regional center applications by exemplar, hypothetical or actual.

I-829 Petition Issues

Mr. Colucci stated that they would begin to issue interview notices for I-829 Petitions. This is something that traditionally has never happened. When asked in the question and answer session if regional centers would have standing to attend such interviews, the IPO responded that they do anticipate allowing attorneys and regional center representatives attend such interviews if the petitioner so chooses. It remains to be seen how effective this will be at addressing project specific issues with EB-5 investors. For example, this is in contrast to the ability of a regional center applicant filing an I-924 application to request a hearing or in-person review of the application during or after the adjudication process.

USCIS also went over the process for denial of an I-829 Petition. If USCIS has a record that the person is in the country, USCIS will issue a Notice to Appear before an immigration judge to begin removal proceedings for that person.

New Division of Policy and Performance

Laurie McKenzie was introduced as the head of a new division which is focusing on policy and performance of the IPO. To that end, she discussed that her division was in charge of considering comments and revisions to the August 2015 draft memorandum. She is also going to be reviewing all the forms, including the Form I-526, Form I-924 and Form I-924A, for potential updates. Lastly, she noted that USCIS and the Department of State have prepared guidance in the event the EB-5 Program sunsets, but that it will not be issued unless sunset occurs.

Source of Funds Issues – Authenticated Documents and Private Currency Exchanges

Ms. Harrison responded with some general answers to popular submitted questions, mostly dealing with source of funds. She reiterated that a private currency exchange or exchange of funds is permissible but that USCIS may require evidence to validate that 3 party’s source of funds for the exchange of funds.  Ms. Harrison also stated that USCIS may request authenticated documents if it receives documents which it believes are fraudulent. However, there is no requirement to submit authenticated documents unless USCIS requests them explicitly.

Odds and Ends

Of particular note was that USCIS was coordinating with the SEC regarding guidance on the reinvestment of capital, which may implicate the Investment Advisers Act of 1940, which governs Registered Investment Advisers. Registered Investment Advisers are the individuals or firms who provide advice on investments to clients.

Requests were made for USCIS to publish Form I-924A data which were taken under consideration, as was the suggestion that it be publicly available to the regional centers that receive Notices of Intent to Terminate. Mr. Colucci also stated that he expected the Commerce Department to issue its report on the EB-5 Program, but not before the end of February. The next stakeholder engagement is preliminarily planned for April 25, 2016, and it will include an in-person component.