One California regional center has upended the EB-5 program — yet again — as the industry goes to court — again — to avoid the reforms of the program carefully worked out by the Obama, Trump, and Biden administrations and then by the U.S. Congress.
Previously, the Behring Regional Center, a DHS-licensed middleman agency that pools the money of immigrant investors, successfully sued to overturn reform regulations backed by the three administrations on the narrow (and non-substantive) issue that one of President Trump’s many acting Homeland Security secretaries who signed the new regulations had not been properly appointed to his job.
Those regulations raised the minimum amount that an alien had to pay from a 25-year-old minimum of $500,000 to a more rational $900,000, and made it less easy for regional centers to gerrymander the areas in which the investments are to be made. In March, Congress, after long and detailed (off-stage) negotiations, and a nearly nine-month hiatus in authorizing the program, gave new life to the controversial program and also created new and stiffer standards for the regional centers. It also changed the $900,000 to $800,000. For greater detail on these developments, see this report by my colleague George Fishman.
Shortly thereafter, in keeping with the new provisions for being a regional center, USCIS declared that all the regional centers had to re-apply for status. Behring sued again, this time against the new forms that the centers were required to file, and the new fees that went with them.
Then, last week, a federal judge ruled that the government had to work with the existing regional centers while the latest Behring case was being litigated, according to Law360.
The ruling, by Federal Judge Vince Chhabria, was challenged by the government this past weekend, as Law360 did not report. Its article on the ruling was chock full of comments about the unreasonableness of the demand for new applications and did not mention the other side of the argument at all. There was not a whisper in the Law360 coverage that large numbers of regional centers have been charged with fraud in the federal courts and that Congress changed the law as a result.
The PACER case file is 3:22-cv-02487-VC; it is in the federal courts in the Northern District of California.