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EB-5 investors sue USCIS for intentional processing delays

A group of foreign investors who have put substantial money into a solar energy plant were expecting to receive EB-5 investor visas in exchange. After more than two years, the first step toward those visas has yet to be approved. They have filed suit against the U.S. Citizenship and Immigration Services, accusing the agency of dragging its feet when it has a duty to approve such projects in a timely fashion.

EB-5 visas are available to international entrepreneurs who are willing to put funds into commercial projects in the U.S. The program is intended to stimulate economic growth, particularly in under-developed areas of the country.

In order to qualify for an EB-5 visa, the applicant must make an investment of at least $500,000 toward an approved U.S. project that will create or preserve at least 10 permanent, full-time positions for American workers. EB-5 visa holders qualify to adjust their status to lawful permanent residents (green card holders).

The problem in this case is obtaining the USCIS’s approval for the project. According to the lawsuit, the agency reviewed the project, a solar energy concern in California, for 16 months before issuing a notice of intent to deny the project. A broker representing the group of 200 investors addressed those objections promptly and thoroughly.

Seven months later, the broker received a second notice of intent to deny the project -- this one with new objections. The broker also addressed the new objections, but the project approval still hasn’t been issued. Until the project is approved, the investors -- who provided a combined $100 million in funding for this project -- cannot have their EB-5 visa applications considered.

The delay has certainly been extensive. The solar power plant is now complete and is now in operation, selling power to Southern California Edison. Thousands of jobs have been created and are currently filled.

Is it legal for the USCIS to delay a project approval for over two years?

The investment broker representing the international investors says that the federal Administrative Procedures Act requires the USCIS to adjudicate the project application within a timely fashion. Moreover, Congress designated 180 days as a reasonable turn-around period for reviewing the application. The plaintiffs allege that the agency’s failure to reasonably adjudicate the application is “arbitrary, capricious and/or motivated by animus.”

Part of the delay was understandable. A bill that would have delayed visas for foreign investors was considered in 2015. The bill did not pass into law, but it did cause a flood of filings from investors and developers who hoped to get visas through before any legal change was made.

The USCIS says that this rush did affect its filing times, but the backlog does not fully explain the delay for this group of investors. According to the lawsuit, the project application was submitted in August 2015, and the USCIS’s website now says it is processing applications submitted in November 2015.

The group of investors and its broker claim that the 26 months (and counting) that they have waited for project approval constitute, as a matter of law and the USCIS’s own policy, an excessive delay. The lawsuit seeks to force the agency to adjudicate the qualifications of the project within 30 days.

This is an extraordinary situation. The EB-5 visa program provides opportunities for relatively non-controversial immigrants to join communities in the United States. And, although the project in this case is taking place in California, the same issue could arise regarding projects in any state for which EB-5 visas are on the table.

If you are an international investor who is interested in an EB-5 or any investor visa, you should know that your visa may allow your immediate family members to obtain visas, as well. If you are having trouble with an EB-5 visa, we recommend discussing your situation with an experienced immigration attorney. An attorney who has handled these visas can offer you a range of options.

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