Expert: EB-5 Lawsuit Unusual

"A recent suit alleging that some EB-5 applications were improperly delayed based on a regional center's ties to Iran may be a harbinger of increased litigation over the program, spurred by growing scrutiny of the visa category and a policy landscape that is problematic for immigrant investors, attorneys say.

In a case filed last Monday in Washington, D.C., district court, California-based immigrant investor regional center American Logistics International LLC claimed U.S. Citizenship and Immigration Services has incorrectly delayed or denied a slew of investor petitions.

Although the agency allegedly denied the EB-5 petitions based on an “incorrect” finding that the investor funds weren’t “at risk,” ALI says the real reason for the denials was likely an ABC News “Nightline” segment suggesting that the regional center has ties to Iran, along with comments from Sen. Chuck Grassley, R-Iowa. ...

Attorneys agree that ALI’s suit is unusual, as most EB-5 cases don’t have quite such a geopolitical bent and are concerned with simply challenging long delays or USCIS legal errors. Regional centers are also typically inclined to settle disputes privately rather than launch highly publicized lawsuits, said Steve Yale-Loehr, a professor at Cornell Law School and an attorney with Miller Mayer LLP.

“Most regional centers don't like publicity — they don’t like to have it known that they had to sue on behalf of their investors,” Yale-Loehr said." - Allissa Wickham, May 11, 2015.