John Burson  edited Wednesday, July 31, 2024

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Federal Judge Blocks USCIS from Terminating EB-5 Regional Center Over Unpaid Fees

Court ruling highlights the necessity of due process in administrative actions, ensuring stability for EB-5 investors and regional centers

A recent court ruling has provided a significant victory for EB-5 Regional Centers across the United States. A federal judge in Montana has ruled that the US Citizenship and Immigration Services (USCIS) cannot terminate an immigrant investor enterprise's authorization solely due to unpaid program fees. This decision is a pivotal moment for the EB-5 Immigrant Investor Program, which has faced increasing scrutiny and regulatory challenges.

The Case

The Missoula, Montana-based Northern Rockies Regional Center was among over 100 EB-5 regional centers threatened with the loss of approval or authorization from USCIS for failing to pay program integrity fees. The center filed a lawsuit seeking an injunction against USCIS, arguing that the termination was unjust and procedurally flawed.

Court’s Decision

On Monday, Judge Donald W. Molloy of the US District Court for the District of Montana granted the injunction, effectively blocking USCIS from terminating the Northern Rockies Regional Center's authorization pending a final decision on the case's merits. Judge Molloy found that the injunction was warranted, highlighting the need for due process and fair notice in administrative actions that have significant implications for investors and regional centers.

Implications for EB-5 Stakeholders

This ruling carries substantial implications for the EB-5 program:

1. Legal Precedent: The decision sets a legal precedent, reinforcing that USCIS must follow due process and provide adequate notice before terminating regional center authorizations for unpaid fees.
2. Investor Confidence: The ruling helps maintain investor confidence and stability within the EB-5 program by preventing abrupt terminations.
3. Regulatory Compliance: Regional centers are reminded of the critical importance of maintaining compliance with all regulatory requirements to avoid legal challenges and potential terminations.

Future Outlook

This court decision may prompt USCIS to review and revise its procedures for handling fee-related terminations to ensure they align with legal standards for due process. Regional centers are likely to be more vigilant in managing fee payments and maintaining compliance to avoid similar issues.

The federal judge's intervention in blocking the termination of the Northern Rockies Regional Center over unpaid fees marks a significant development in the administration of the EB-5 Immigrant Investor Program. This decision underscores the balance between regulatory enforcement and the protection of stakeholders' rights, ensuring a more stable and predictable environment for EB-5 investors and regional centers.

Source:

• https://news.bloomberglaw.com/daily-labor-report/eb-5-regional-center-termination-for-unpaid-fee-blocked-by-court