EB-5 Modernization Update to take Effect November 21st

USCIS is set to move forward with the EB-5 Immigrant Investor Program Modernization rule that was announced on July 24, 2019. The EB-5 visa's purpose is to allow foreign investors that invest in the U.S. economy and create jobs to adjust their status. The changes will affect I-526 investor petitions filed on or after November 21st, 2019 and are meant to account for inflation and current unemployment.

Minimum investment values have increased. The minimum investment for a targeted employment area (TEA) is now $900,000 USD, while the non-TEA investment minimum is $1.8 million USD. The old values were $500,000 USD and $1 million USD, respectively.

The changes are mostly to do with the definition of targeted employment areas (TEA). TEA are regions that would benefit greatly from economic investment. They are either rural or high unemployment areas. The definition of "rural" is clarified in the new rule as an area that is both 1) not a Metropolitan Statistical Area (MSA) and 2) not within the boundary of a city or town that has 20,000 or more in population, according to the most recent decennial census. 

"High unemployment area" has been redefined, as well. States will no longer have the ability to designate areas within their boundaries as high unemployment. Hence, letters from the State government doing so are no longer accepted as evidence that an area is a TEA. Instead, applicants wanting to invest in a TEA must provide unemployment data for the relevant MSA, county, or town/city. A case-specific area can also be accepted as a TEA if sufficient levels of unemployment are demonstrated. This is done by calculating the average unemployment rate of the area's and adjacent area's census tracts and demonstrating that it meets the threshold of 150% of the average national unemployment rate. Accepted unemployment data can come from U.S. Census Bureau or the Bureau of Labor Statistics.

The new rule includes a section on priority dates. The priority date from a previously approved EB-5 petition can be carried over to any EB-5 petition filed on or after November 21st, 2019. Petitions filed before November 21st, 2019 will be subject to the old investment standards and definition of TEA. 

New Rule to increase minimum EB-5 investments to $800K and $1.9 million

The employment-based investor visa, or EB-5 visa, will be undergoing significant changes as shown in a final rule published by USCIS on Wednesday.  These changes, which will take effect on November 21, 2019, are meant to update the visa requirements to account for inflation and procedural changes, which have not been addressed since 1993.

The EB-5 visa is intended to encourage foreign investors to bring capital investment and create jobs in the U.S. The visa allows for permanent residence with conditions, which can be removed two years later. Job creation requirements remain the same -- investors must create at least 10 full-time jobs for qualified workers in the U.S or help a troubled business maintain its number of employees.  Jobs created for the investor or his family members do not count.  

Capital investment requirements have undergone significant changes. An investor can invest capital in certain economically depressed areas targeted by the government called Targeted Employment Areas (TEA).  The minimum investment required for TEA by investors is being raised from $500,000 to $900,000.

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TEA can refer to rural areas or areas with high unemployment rates, both of which would benefit greatly from economic investment. TEA definition has been narrowed to cities and towns outside of metropolitan statistical areas (MSA, or areas of high population density and close economic ties). Technical changes have also been made to the TEA definition to better identify economically distressed communities.  DHS will also take over from the States the responsibility of designating specific areas to be TEAs.  The TEA investments are usually facilitated through specific business entities called "regional centers," which invest in projects located in targeted areas. As of July 8, 2019, there are 880 regional centers approved by the USCIS.

On the other hand, an investor can invest funds directly in other parts of the U.S. economy.  The minimum investment for non-TEA will also increase, from $1 million to $1.8 million.

Petitions filed before 11/21/2019 will be held to the old minimum investments and those filed on or after 11/21/2019 must follow the increased minimum investments. According to the final rule, these amounts will continue to change every five years to adjust for inflation.

The procedure to removing conditions on EB-5 permanent residence has changed. Dependent children that reached the age of 21 or married during their conditional residence, as well as dependent spouses that divorced from the principal investor during this time, must file Form I-829 separately. They will no longer have to option to be included in the principal investor's I-829 petition.

Investors will also be able to keep priority dates for previously approved EB-5 petitions when they file a new one.  

DHS Proposes to Remove International Entrepeneur Rule

The Department of Homeland Security (DHS) is proposing to block foreign entrepreneurs from coming to the U.S. on parole status to create start-up businesses.  On May 29, 2018, DHS published a formal proposal to cancel the International Entrepreneur Rule (IE rule) created in 2017. 

The IE rule was originally formulated during the Obama administration. Its purpose is to encourage international entrepreneurs to start their businesses in the United States. It confers a temporary parole period of 2.5 years during which foreign investors may create and operate start-up businesses in the U.S.  The period can be extended for another 2.5 years if certain conditions are met. The purpose of the IE rule is to provide an opportunity for these new businesses to grow so that they may provide benefits to the public. 

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Now, the DHS is proposing to completely remove the IE rule. It cites reasons of lacking protection for domestic shareholders and too broad an interpretation of "parole". In its proposal to scrape the IE rule, DHS also cites other other visa categories under which international entrepreneurs may apply to bring their start-up to America. 

E-2, EB-2 and EB-5 visas are possible alternatives to the IE rule but are not framed as favorably for entrepreneurs. Each of these visas have specific requirements.  The E-2 visa is only available if a trading treaty exists between the U.S. and the foreigner's nation. The EB-2 immigrant visa has strict eligibility requirements based on education, skills, and achievement.  Further, the EB-2 immigrant visa requires sponsorship by a U.S. employer unless a "national interest waver" is obtained. The adjudication standards for such a waiver are quite high. The other issue with EB-2 is that there is a huge backlog of applicants from certain countries. Larger countries with many applicants like China and India are subject to long waiting times. Entrepreneurs taking this route would therefore face much larger competition and longer waiting times.

The employment-based fifth preference visa is actually intended for entrepreneurs, granting them and their families permanent residence if certain requirements are met.  The EB-5 requirements are investing in domestic business and creating jobs for American workers. The main difference between EB-5 and the IE rule is that the former requires the foreigner to put up with a large sum of investment capital while the latter may receive investment capital form U.S. investors. The EB-5 visa application process is also long and complicated.

The public has 30 days to provide comments to the proposal.  DHS has received thus far 13 IE applications and has not yet approved any application.  These applications may be rejected or denied on the effective date of the new rule or may be granted an opportunity to establish that the applicants are eligible for parole under the traditional parole rule, i.e., for urgent humanitarian reasons or significant public benefits. 

EB-5 Investment Program Fraud Alert

In light of the increasing number of EB-5 investor visa cases involving fraud and illegal practices, the U.S. Securities and Exchange Commission's ("SEC") and U.S. Citizenship and Immigration Services ("USCIS") recently issued a fraud alert to prospective foreign investors to help them identify potential fraudulent or illegal EB-5 Program activities. 

The main points of the fraud alert are summarized below:

1. Confirm that the regional center has been designated by USCIS. If you intend to invest through a regional center, check the list of current regional centers on the USCIS website. If the regional center is not on the list, exercise extreme caution. Even if it is on the list, understand that USCIS has not endorsed the regional center or any of the investments it offers.

2. Obtain copies of documents provided to USCIS. Regional centers must file an initial application (Form I-924) to obtain USCIS approval and designation, and must submit an information collection supplement (Form I-924A) at the end of every calendar year. Ask the regional center for copies of these forms and supporting documentation provided to USCIS.

3. Request investment information in writing. Ask for a copy of the investment offering memorandum or private placement memorandum from the issuer. Examine it carefully and research similar projects in evaluating the proposal. Follow up with any questions you may have. If you do not understand the information in the document or the issuer is unwilling or unable to answer your questions to your satisfaction, do not invest.

4. Ask if promoters are being paid. If there are supposedly unaffiliated consultants, lawyers, or agencies recommending or endorsing the investment, ask how much money or what type of benefits they expect to receive in connection with recommending the investment. Be skeptical of information from promoters that is inconsistent with the investment offering memorandum or private placement memorandum from the issuer.

5. Seek independent verification. Confirm whether claims made about the investment are true. For example, if the investment involves construction of commercial real estate, check county records to see if the issuer has obtained the proper permits and whether state and local property tax assessments correspond with the values the regional center attributes to the property. If other companies have purportedly signed onto the project, go directly to those companies for confirmation.

6. Examine structural risk. Understand that you may be investing in a new commercial enterprise that has no assets and has been established to loan funds to a company that will use the funds to develop projects. Carefully examine loan documents and offering statements to determine if the loan is secured by any collateral pledged to investors.

7. Consider the developer's incentives. EB-5 regional center principals and developers often make capital investments in the projects they manage. Recognize that if principals and developers do not make an equity investment in the project, their financial incentives may not be linked to the success of the project.

8. Look for warning signs of fraud. Beware if you spot any of these hallmarks of fraud:

• Promises of a visa or becoming a lawful permanent resident. Investing through EB-5 makes you eligible to apply for a conditional visa, but there is no guarantee that USCIS will grant you a conditional visa or subsequently remove the conditions on your lawful permanent residency. USCIS carefully reviews each case and denies cases where eligibility rules are not met. Guarantees of the receipt or timing of a visa or green card are warning signs of fraud.
• Guaranteed investment returns or no investment risk. Money invested through EB-5 must be at risk for the purpose of generating a return. If you are guaranteed investment returns or told you will get back a portion of the money you invested, be suspicious.
• Overly consistent high investment returns. Investments tend to go up and down over time, particularly those that offer high returns. Be suspicious of an investment that claims to provide, or continues to generate, high rates of return regardless of overall market conditions.
• Unregistered investments. Even though a regional center may be designated as a regional center by USCIS, most new commercial enterprise investment opportunities offered through regional centers are not registered with the SEC or any state regulator. When an offering is unregistered, the issuer may not provide investors with access to key information about the company's management, products, services, and finances that registration requires. In such circumstances, investors should obtain additional information about the company to help ensure that the investment opportunity is bona fide.
• Unlicensed sellers. Federal and state securities laws require investment professionals and their firms who offer and sell investments to be licensed or registered. Designation as a regional center does not satisfy this requirement. Many fraudulent investment schemes involve unlicensed individuals or unregistered firms.
• Layers of companies run by the same individuals. Some EB-5 regional center investments are structured through layers of different companies that are managed by the same individuals. In such circumstances, confirm that conflicts of interest have been fully disclosed and are minimized. 

(For more information, see the full alert at: http://www.sec.gov/investor/alerts/ia_immigrant.htm)

The EB-5 Investment Visa - A Quick Summary

Summary of the EB-5 Visa Program:

• A special visa to allow foreign nationals to obtain U.S. permanent residence (“green card”) if they invest capital in a new or troubled enterprise and create at least 10 full time jobs for U.S. workers.

Benefits of the EB-5 Program: 

• Generally faster than other categories as the visa numbers are currently available for all countries including China and India (although China may have a cut-off date in 2015).
• Does not have specific qualifications or experience requirements.
• Family members including spouses and children under 21 can also obtain U.S. green cards.
• Can invest directly or indirectly through third party companies. 

How many EB-5 visas may be issued every year?       

• Up to 10,000 EB-5 visas may be issued annually.  3,000 are set aside for targeted employment area (with high unemployment) 

How much capital is required to invest in the EB-5 visa program?

• US$1,000,000 of investment is required in the regular program – Investors choose the business to invest their capital. 
• US$500,000 of capital is required if investor invests in Regional Centers 

Do I need to invest the total sum of capital immediately?

• No, capital can be invested in installments depending on the type of business, as long as there is a concrete plan to invest the required amount of money in the U.S. enterprise. 

Which investment option should I choose – $1,000,000 or the $500,000?

• The investment of one million dollars allows the investor to choose any business to invest in.  It is more suitable for investors who already have certain type of business in mind and who intend to be actively involved in the business enterprise.  The Regional Centers ($500,000) may be more suitable for the passive investors who do not want to be actively running the business. 

What documents are required to prove that I have the capital to invest?

• The U.S. government would like to know that you have the stated capital to invest, and also that the capital comes from legal sources.  Typically, financial documents from the last five years are required including, for examples, personal or company income tax returns, foreign business licenses and registration, salary records, bank account records,  real estate documents, stock and security ownership documents, etc. 

What other documents are needed to prove the case?

• Depending on the applicant and the business being invested, other documents may be required including: bank statements showing amounts deposited in the U.S. business accounts for the enterprise, evidence of assets purchased for the U.S. enterprise, evidence of property transferred from abroad to the U.S., mortgage agreement, promissory note, security agreement, evidence that U.S. workers have been hired, etc.   

Would it be a problem if I have had a pending court case against me before?

• It depends.  Provide certified copies of any judgments or evidence of all pending governmental civil or criminal actions, governmental administrative proceedings, and any private civil actions (pending or otherwise) involving monetary judgments against the immigrant investor from any court in or outside the United States within the past fifteen years. 

Are there risks involved in my investment?     

• EB-5 is an investment visa and carries all the “normal” risks associated with investing in a business.  Investors must perform their due diligence before making an investment decision.  In fact, the EB-5 regulations require that the investment must be placed “at risk” in order to qualify for the EB-5 visa.  

Before my EB-5 visa application is approved, is there a way to protect my investment?

• Yes, it may be possible to place the funds in an escrow account during the adjudication process. Once the I-526 petition is approved, the funds will be transferred to the Eb-5 enterprise upon approval of the immigration visa petition.  

What are the basic procedures of applying for EB-5 green card?         

There are two major steps:

• File I-526 with evidence to apply for 2 years of conditional lawful permanent resident status
• File I-829 with evidence to remove conditions 90 days before the 2nd anniversary (evidence must match the initial business plan) 

What U.S. government office will be handling my EB-5 applications? 

• Generally, the United States Citizenship and Immigration Services (USCIS), a branch of the Department of Homeland Security, will be adjudicating the EB-5 petitions. 

What does it mean by “conditional lawful permanent resident status” or green card?

• Even if the USCIS agrees that the evidence is sufficient to support a I-526 EB-5 petition, the  petitioner (foreigner) will only be approved for a temporary green card for 2 years. This is called the conditional green card.  A second petition I-829 must be filed within two years to remove the conditions to make the green card permanent. 

How can I remove my conditional status?

• Ninety (90) days prior to the two-year anniversary of the date on which the immigrant investor obtained conditional lawful permanent resident status, the immigrant investor must file a Form I-829 to remove the conditions.  Additional evidence must be filed to prove that the required capital has been invested or being actively invested as initially planned, and 10 full-time jobs have been or are expected to be created within a reasonable time.  

What are Regional Centers?

• A Regional Center is a business entity approved by the USCIS to be involved with the promotion of economic growth, improved regional productivity, job creation and increased domestic capital investment.  However, just because it has been approved by USCIS, it does not mean that it is a “safe” or “good” investment. Currently there are about 290 to 300 Regional Centers approved. 

How do I know which Regional Center to invest in?    

• It is ultimately an immigrant investor’s decision to choose which Regional Center to invest in.   Professionals such as attorneys, accountants, business and financial professionals may provide professional guidance and advice to help you make the decision. 

Should I use an agent, consultant or other middlemen to help me invest in the EB-5 visa program?

• Many intermediaries (agents, immigration consultants, investment companies, etc.) receive financial incentives from the regional centers or other related parties.  Therefore, their advice may not be objective.  In fact, some of them have been found to use exaggerated or even untruthful information to attract foreign investment.  Consequently, it is very important for foreign investors to hire independent business, financial and legal professionals to do due diligence and to investigate the offer of investment program thoroughly. 

EB-5 Regional Center Eligibility Update: Form I-924A

USCIS reminds existing Regional Centers to file their annual update to demonstrate their continued eligibility for the EB-5 Program.  Specifically, all approved EB-5 regional centers with a designation letter dated on or before September 30, 2014 must file Form I-924A, Supplement to Form I-924, for fiscal year 2014 no later than Dec. 29, 2014.

USCIS will issue a notice of intent to terminate participation in the EB-5 Immigrant Investor Program if a regional center fails to timely file or files an incomplete Form I-924A.

EB-5 Program vs. L-1 Visa

Foreign investors who are interested in applying for U.S. green cards often ask this question - Should I apply for the EB-5 employment creation visa or the L-1 multinational executive and manager visa? The answer often depends on the individual circumstances and the facts of each particular case.  This article attempts to highlight the most important considerations.

EB-5 vs. L-1: The Basics

The EB-5 Program allows foreigners to apply for U.S. permanent resident status by investing $500,000 or $1,000,000 dollars in a U.S. enterprise and creating or preserving at least 10 full-time job openings.   The advantages are that applicants do not have to meet any educational or qualification requirements.  Further, the visa numbers are still abundant in general, although demand for EB-5 China visa numbers has been under pressure as of late.

The L-1 visa allows a multinational company to temporarily transfer foreign nationals with management, executive, and specialized knowledge skills to the United States to continue employment with an office of the same employer. The basic requirement is that the foreigner must have worked at a foreign company for at least one year as an executive, manager or specialized knowledge employee.  The advantages are that, unlike the EB-5 visa, no specific amount of capital investment is required for the L-1 visa.  There are no upper limits as to how many L-1 visas are issued each year. Further, L-1 visa holders may subsequently apply for U.S. green cards through the EB-1C visa category.

Under both EB-5 and L-1 visa programs, the dependents (spouses and minor children) may also live in the U.S. with the principal applicant.

Approval Rates

Many foreigners often ask about the "success rate" of these two visa program categories. However, there really is no simple answer to this question.  For instance, the approval rates of these applications vary each year, and one should not rely on the statistics of a particular year.   For example, according to the statistics released by USCIS, the denial rates for L-1A petitions increased from 8 percent in FY 2007 to 14 percent in FY 2011 for no apparent reasons.  Further, the approval rates also vary between different countries and industries. For instance, the approval rates of L-1B cases (specialized knowledge employee) have been declining in recent years for IT professionals.

Within the EB-5 category, the USCIS reported that the approval rate of the I-526 application (Immigrant Petition by Alien Entrepreneur) has increased from 53% in 2005 to 79% in 2012.  But it is important to note that many petitions are not adjudicated in the year that it was filed.  These numbers only take into account cases that have been decided by the agency during the particular fiscal quarter or year.  For example, USCIS reported an approval rate of 81% in 2011, when it receipted 3,805 I-526 petitions, approved 1,503 cases and denied 371 cases.  One thing is clear is that the approval rates of each visa category might change due to the agency's changes in internal policy and other administrative reasons. Hence, foreign investor should not rely on the statistics of one particular year as basis for their investment decisions.

Foreign Investor's Situation

Perhaps the more important consideration in choosing between the L-1 visa and the EB-5 visa is the investor's personal circumstances.  The personal investor must evaluate if she has met the basic requirements of either or both of these visa programs.  For example, if an investor has not been working as an executive or high-level managerial position in a foreign company for at least one year, then she will not be qualified for the L-1A visa.  Likewise, if an investor does not have at least US$500K to invest, then he should not consider the EB-5 program.

Some investors actually meet the basic requirements for both visa programs. In those situations, the investor should consider his personal preferences.  If a person prefers to run his own business and does not want to invest substantial amount of money, she probably should consider the L-1 visa. Unlike the EB-5 program, to qualify for an L-1 visa, the U.S. business does not have to employ at least 10 full time employees.

On the other hand, if money is not an issue and the investor has no problem letting other people invest his money, then he should consider an EB-5 Regional Center program.  An EB-5 Regional Center is a legal entity that is established to invest foreign investors' capital in certain pre-defined projects.  There are several hundred regional centers in existence.  Foreign investors must choose carefully which program to invest their capital.   It is important to note that an investor may also choose to invest a million dollars in his own business without using a regional center.  In this situation, the investor is free to choose any type of business to invest in and make his own business decisions.

Risks

Finally, investors must also consider the risks involved when choosing a visa program.  Generally speaking, all investment opportunities involve risks.  Since the L-1 visa requires less initial capital investment and usually allows the investor to "start small". So the risks of financial loss is somewhat limited. Further, to the extent that the L-1 visa holder generally makes his own business decisions, he should be able to control how much risks to take.  On the other hand, since the EB-5 program involves a large amount of capital investment, the risks involved are naturally greater.  Further, if one invests through a Regional Center program, all business decisions will be made by others without any guarantee of a return.   Hence, it is very important to carefully evaluate an investment program before making a decision.  Do not solely rely on the recommendation of intermediaries as these middle companies usually receive kickbacks or commissions from the investment programs.

China EB-5 Visa Quota Used up for 2014

The EB-5 immigrant visa numbers have been used up for China for fiscal year 2014 as of August 23, according to Charles Oppenheim, Chief of Immigrant Visa Control and Reporting Division, U.S. Department of State. 

This action is necessary because all available visa numbers for China in the EB-5 category have been allocated to existing cases. 

The EB-5 visa provides a method of obtaining a green card for foreign nationals who invest money in the United States. To obtain the visa, individuals must invest $1,000,000 (or at least $500,000 in a "Targeted Employment Area" - high unemployment or rural area), creating or preserving at least 10 jobs for U.S. workers excluding the investor and their immediate family.

However, this development does not affect applicants whose cases that have already been processed and scheduled for interviews. These cases have already been reviewed and allocated visa numbers, including cases that have been scheduled for interviews. Therefore, Chinese EB-5 applicants who have been scheduled for an interview at an overseas American Consulate based on the original establishment of the August and September cut-off dates would not be impacted by the exhaustion of visa numbers as they already have been allotted visa numbers.  

The State Department states that no additional numbers are available for cases originally scheduled for interview in an earlier month who are just now returning, or for those first requesting an interview.  However if there are Chinese applicants who fail to appear or failed to overcome a refusal during August or September, then additional visa numbers will be available.

USCIS offices may continue to accept and process China Employment Fifth preference cases and submit them in the normal manner. However, instead of being acted upon immediately, those cases will be held in the Visa Office's "Pending Demand" file until October 1, 2014. At that time, all eligible cases will be automatically authorized from the "Pending Demand" file under the FY-2015 annual numerical limitation. Each USCIS requesting office will receive an e-mail notification of such authorizations, which will be effective immediately.

Applicants who are impacted by the unavailability of visa numbers or otherwise do not qualify for EB-5 investment visas may consider applying for L-1 visa if they own or currently working for a foreign enterprise. 

The L-1 visa is a temporary, non-immigrant visa which allows qualified overseas companies to relocate foreign qualified employees to its U.S. parent, branch, affiliate, or subsidiary of that company. There are several different types of L1 visas. L-1A visa is specifically designed for intra-company executive or manager transferees. The L-1B visa is designed for intra-company transfers of employees with specialized knowledge. 

It is also important to note that additional visa numbers will be available starting October 1, 2014.  However, demand will likely continue to be strong for this visa category.

"Youhuitong" Program and EB-5 Investment

The modernization of the Chinese economy has created unprecedented number of wealthy individuals. Many are them are interested in immigrating to other countries especially the United States for educational, business, and other opportunities.

For a foreign investor to participate in the U.S. EB-5 immigrant visa program, he or she must invest either US$500,000 or $1,000,000 in a U.S. enterprise and create 10 full-time job opportunities.  However, the Chinese government has a $50,000 annual limitation on currency transfers on its citizens.  Traditionally, to invest in the U.S. EB-5 program, a Chinese investor would ask 10 or 20 friends to each receive and convert the Chinese equivalent of US$50,000 or $1,000,000, and then transfer the funds to a bank outside of China. The funds would then be grouped together again outside of China before they are invested in either an EB-5 Regional Center or direct investment program.

However, this process of funneling funds outside of China has proven to be quite complicated and inconvenient; also, it is not always easy to find "friends" to act as conduit to transfer money for foreign investments.  As a response to this situation, some Chinese national banks started some pilot “youhuitong” programs which would allow unlimited transfers of funds to overseas in a single transaction. The bank usually charges a certain percentage of the total remittance as processing fee.  The bank also profits from the fluctuations of the foreign current exchange rates.  Because of the convenience of this type of youhuitong programs, they have quickly become very popular among EB-5 investors.

On July 10, 2014 the official state broadcasting TV channel in China, the China Central Television network (CCTV),  recently issued a report on these "youhuitong" money transfer programs, accusing some banks of acting inappropriately in providing services to help wealthy Chinese citizens to convert large sums of currency and transfer them abroad to invest in the U.S. EB-5 investor immigration program. Although the report has been withdrawn since then, the banks have temporarily suspended the youhuitong unlimited-transfer programs.

Some U.S. and overseas commentators and media speculate that the CCTV report was politically motivated.  Because of the demand for the EB-5 investment visas has been on the rise in recent years, it is possible that this type of "youhuitong" programs will re-surface again later on to facilitate investors to transfer funds to overseas countries for investment purposes.

Indian EB-2 Expected to Retrogress to 2004 or 2005 in the December

The following is an Visa Office Update on Priority Dates and Demand (Updated 11/1/13), as reported by AILA:

On Wednesday, October 23, 2013, Mr. Charlie Oppenheim of the Department of State's Visa Office spoke to the Washington D.C. Chapter dinner. Below are notes from that meeting. These notes are Mr. Oppenheim's impressions at this time, and are subject to change based on usage or new developments.

• His office is concerned again this year that the EB-5 numbers for China are moving too fast and there could be a cut-off for China EB-5 in June 2014 or later, if usage remains at the current levels. Worldwide EB-5 usage is up as well.
• The India EB-2 cutoff date is expected to retrogress from June 2008 (which is what it is in the November 2013 Visa Bulletin) to 2004 or 2005 in December 2013. This is due in large part to Indian nationals "upgrading" from EB-3 to EB-2. See below for more on upgrades.
• India EB-3 will continue to move very slowly.
• Upgrades continue to be a tough issue to manage. USCIS does not appear to be working to develop any processes or procedures to better capture upgraded employment-based cases so there is no better information expected from that agency to assist Mr. Oppenheim's office in better managing these numbers.
• Worldwide EB-2 is expected to remain current.
• Worldwide EB-3 could move up to 2011 in the December Visa Bulletin.
• Worldwide EB-1 is expected to remain current.
• China EB-2 will continue to move slowly.
• China EB-3 is expected to continue to be ahead of a China's EB-2 priority date. Members are reminded that they may be able to use an expired EB-2 PERM for a new EB-3 category. As long as the first EB-2 I-140 was approved, the PERM can be used to file a second I-140 under EB-3. See this USCIS memo for more information (AILA Doc. No. 07062172)
• EB-4 is expected to remain current.
• Family-based 2A is expected to hold at its current date. Mexico FB-2A may need to retrogress in the future. Many FB-2A applicants are not showing up for their appointments, or their applications are being returned from the posts.

AILA InfoNet Doc. No. 12012349 (posted Nov. 1, 2013)

EB-5 Ponzi Scheme Indicted by SEC

A Texan couple and their companies were charged by the U.S. Securities and Exchange Commission (SEC) for allegedly running a Ponzi scheme to defraud at least 10 foreign investors more than US$5,000,000 under the guise of the EB-5 investment visa program.

The EB-5 investment visa program (EB-5 Program) allows foreigners to apply for U.S. permanent resident status (commonly known as the "Green Card") by investing $500,000 or $1,000,000 dollars in a U.S. enterprise and creating or preserving at least 10 full-time job openings.   There are no specific qualification requirements of the EB-5 investors, and currently there is an abundance of EB-5 visa numbers.  Because of these advantages, many wealthy foreign investors are interested in the EB-5 Program.  At the same time, the EB-5 Program has also been abused by unscrupulous individuals and companies as a marketing tool to defraud innocent foreigners large sums of money.

By law, business entities called Regional Centers are established for the economic development of specific geographic areas and industries under the EB-5 Program. The Texan couple, Mr. and Mrs. Ramirez, formed a Regional Center called "USA Now LLC" to solicit foreign funds to invest in the EB-5 Program.  However, even before the Regional Center's application was approved by the U.S. government, the couple was already taking money from foreign investors. The Ramirezes initially targeted investors in Mexico, but later on also solicited money from investors in Nigeria and Egypt.

The Texan couple also allegedly made false promises to investors that the funds would be kept in escrow account, and would only be released for legitimate business purposes after the U.S. Citizenship and Immigration Services (USCIS) had approved their immigrant visa applications.  In reality, the couple would allegedly take the money out from the escrow account for their own illegal use.  Some alleged misappropriations of investor funds include the purchase of a Mercedes Benz and other automobiles for company employees, and financing of a Cajun-themed restaurant in Texas.  Further, the SEC also alleges that the Ramirezes would use the payments of subsequent investors to make Ponzi-payments to earlier investors.  For example, an initial EB-5 investor discovered that USA Now was not yet approved as a Regional Center and demanded a refund of investment. Because the Ramirezes already spent the funds of the first investor, they therefore used the investment funds from subsequent investors to pay back the first investor.

The Texan couple also allegedly promoted to foreign investors that the funds would be invested in an energy business, although they never included such an investment plan in the Regional Center application filed with the USCIS.  They also allegedly promised prospective investors a 5% return of investment without explaining how they were going to make good that promise.

This is not the first time that the SEC has investigated an EB-5 Regional Centers.  Because large sums of funds are involved in EB-5 Program, scammers often prey on foreign investors who are usually not sophisticated enough to understand all the legal intricacies of the U.S. legal system.  Hence, it is important for foreign investors to do their due diligence before choosing a Regional Center as an investment tool.  If in doubt, they should seek advice from independent professionals such as lawyers and business advisers.

October 2012 Visa Bulletin: Employment 2nd Preference Major Retrogression

The Visa Bulletin for October 2012 is disappointing to many foreign nationals who have pending employment based petitions, especially those from India and China.  Employment-based, second preference (EB2) India has retrogressed to a cutoff date of September 1, 2004, and EB2 China to July 15, 2007 due to the large number of pending adjustment of status applications before the USCIS.  This is far worse that what was previously predicted by the State Department.  “Other Countries” in the EB2 category are still not current, but it is expected that may change soon.

On the family side, F1 continues to move forward slowly. F2A moves forward by three weeks to June 1, 2010 for China, India, Philippines, and “Other Countries”.  F2B remain unchanged for most countries except Mexico and Philippines.  Please see below for details:

Family	Other Countries	China	India	Mexico	Philippines
F1	8-Oct-05	8-Oct-05	8-Oct-05	15-Jun-93	1-Apr-96
F2A	1-Jun-10	1-Jun-10	1-Jun-10	15-May-10	1-Jun-10
F2B	15-Sep-04	15-Sep-04	15-Sep-04	1-Oct-92	22-Jan-02
F3	22-May-02	22-May-02	22-May-02	8-Feb-93	22-Jul-92
F4	15-Mar-01	15-Feb-01	15-Mar-01	22-Jun-96	8-Feb-89

1st: Unmarried Sons and Daughters of Citizens (about 23,000 per year).

2A: The 2 "A" preference is for Spouses and Children (under 21 & unmarried) of LPR's.

2B: The 2 "B" Preference is for Unmarried Sons and Daughters (21 or older) of LPR's.

3rd: Married Sons and Daughters of Citizens.(about 23,000 per year)

4th: Brothers and Sisters of Adult Citizens.(about 65,000 per year)

Employment	Other Countries	China	India	Mexico	Philippines
1st	C	C	C	C	C
2nd	1-Jan-12	15-Jul-07	1-Sep-04	1-Jan-12	1-Jan-12
3rd	22-Oct-06	8-Feb-06	15-Oct-02	22-Oct-06	1-Aug-06
Other Workers	22-Oct-06	22-Jun-03	15-Oct-02	22-Oct-06	1-Aug-06
4th	C	C	C	C	C
5th	C	C	C	C	C

1st: Priority Workers (Extraordinary ability aliens, multinational companies executives/managers, outstanding prof./researchers)

2nd: Members of the Professions Holding Advanced Degrees or Persons of Exceptional Ability.

3rd: Skilled Workers, Professionals, and Other Workers (Unskilled.)

4th: "Special Immigrants" (Religious & others)

5th: Employment Creation (Investors)