District Court Interprets New Guidelines for Regional Center Termination


In December 2019, the U.S. District Court for the Western District of Washington found that USCIS’ termination of a Regional Center was arbitrary and capricious and ordered USCIS to reopen and re-adjudicate the I-526 petitions associated with the regional center.  This is one of the first federal court cases which interpreted USCIS’ Immigrant Investor Program Office’s (“IPO”) positive and negative indicators” test to balance whether a regional center is continuing to promote economic growth.   

In March 2016, IPO terminated the regional center’s designation after determining (1) it was no longer serving the purpose of promoting economic growth, (2) had diverted funds from job creating purposes, and (3) had not met the monitoring and oversight responsibilities set forth in its designation letter.  A lengthy adjudication by the Administrative Appeals Office (“AAO”) affirmed IPO’s decision, despite new evidence that bad actors were removed and that a receivership was appointed, and job creation continued.

The court ruled:  “Just because a regional center failed to promote economic growth for a short period while management changed hands does not mean that the regional center has not continued to promote economic growth after that point, when it in fact provided jobs on a successful construction project.”

The case also shows how, in certain circumstances, criminal actions of a third party should not dictate the outcome of individual investors’ EB-5 cases and may not serve as grounds to terminate a regional center’s designation. 

With the new regulations increasing the minimum EB-5 investment amount to $900,000, and to $1,800,000 for investments not located in a TEA, very few investors are filing new I-526 petitions, making it extremely difficult for regional centers to raise money. Thus, this decision is critical in ensuring the survival of regional centers in this new era.

This post originally appeared on Wolfsdorf Rosenthal. Reprinted with permission.

About The Author

Joseph “Joey” Barnett is a partner at Wolfsdorf Rosenthal LLP and a member of the firm’s EB-5 and business immigration practices. He is licensed as an attorney in Illinois and Wisconsin and practices exclusively in immigration and nationality law. Mr. Barnett represents immigrant investors seeking permanent residency in the United States through USCIS-designated Regional Centers and investment in their own businesses. Mr. Barnett also assists developers with the establishment of complex corporate and financing structures for EB-5 capital. He works with economists, securities lawyers, business plan writers, and other professionals to prepare Regional Center applications, amendments, and project “exemplar” approvals. As the lead member on the firm’s Chinese EB-1 team, Mr. Barnett has successfully represented Chinese executives, researchers, professors, medical professionals, engineers, musicians and artists, media and public relations professionals, and others with extraordinary ability in the sciences, arts, education, business, or athletics seek permanent residency in the U.S. Mr. Barnett also assists executives and managers in multinational companies to obtain permanent residency in the U.S. Mr. Barnett is also responsible for a variety of other immigration matters, including temporary work visas, employment-based petitions, administrative appeals, and federal writ of mandamus lawsuits.

The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.