EB-5 Program Has More Generals than Privates

By David North on September 2, 2021

Like some comic-opera army, the EB-5 program has more generals than privates.

There are supposed to be lots of alien investors (the privates) with their money being pooled by a smaller number of U.S.-based regional centers (the generals). Each alien investor was to get a family-size bunch of green cards for a minimum investment, the size of which has varied from $500,000 to $900,000 to $500,000 again, as regulations and law suits have varied that number. The regional centers then pooled the funds into, usually, big-city real estate ventures; a substantial portion of these funds fell into the hands of corrupt middlemen.

The regional center part of the program was not re-authorized by Congress and so expired on June 30, but well before that date the generals/privates balance was all out of whack, and it is even more so now.

Numbers. While Google reports 673 regional centers (as of January 7 of this year), the total has dropped to 637 as of June 30, and to 595 as of the latest CIS tabulation on August 30. In the last two months, the net regional center death rate has been about one every 34 hours, undermining attempts to revive the program in Congress.

My prediction is that with 545 EB-5 centers currently counted as terminated, and another center dying every 34 hours, that by early October the number of operating EB-5 regional centers will be exceeded by the number of dead ones.

Thus, participating recently in the EB-5 regional center program, far from being an economic stimulator, has been a disaster to numerous American businesses.

Using the 595 still-alive centers as a base, let’s look at how that number (of the surviving generals) compares to the number of immigrant investors (the privates) in the last year for which we have data.

There were 282 I-526 forms filed by would-be alien investors in the period April 1, 2020, through March 31, 2021. Given the pattern in prior years of a 10,000 visa congressional ceiling, and about 2.5 visas per investment, that produced about 4,000 applications a year on average. The number 282 is about 7 percent of the usual number of such petitions, and about half the number of currently existing regional centers.

So, for every private there were two generals, a ratio totally suitable for a comic-opera army.

The author is grateful to Adam Morys, a CIS intern, for his repeated calculations of the numbers of regional centers from raw USCIS data.