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EB-5 Investment Voice
Mona Shah & Associates Global Podcast Series
Reported by Hermione Krumm, Esq.
EB-5 Investment Voice is the only Podcast series that focuses on the United States immigrant investor visa, EB-5 and foreign direct investment. Mona Shah, Esq. welcomes guests from the industry, including: Developers, Regional Center Operatives, Attorneys, Legislators and Politicians.
The proposed EB-5 update is a compromise still in the works. In this episode, Mona is joined by Ira Kurzban, Esq., who brings in a leading litigation attorney’s perspective to the proposed legislation, to discuss various important but overlooked issues. They also discuss the work Mr. Kurzban and other pioneers are doing with the Immigrant’s List and their dedication to reforming the immigration system.
For many, Ira Kurzban is the living legend within the immigration community that no further introduction needs to be given. Many know him from the Kurzban’s Immigration Law Sourcebook – the go-to reference on U.S. immigration law, but he is also the founding partner of the law firm Kurzban, Kurzban, Weinger, Tetzeli & Pratt, P.A., located in Miami, Florida. Considered as one of the country’s leading immigration attorneys, Mr. Kurzban has been extensively involved in the EB-5 program since its inception. He was lead counsel in Chang v. U.S., the most significant decision to date involving the EB-5 program.
Mr. Kurzbam is currently litigating a wide variety of EB-5 cases on behalf of immigrant investors. He serves as an advisor to many regional centers concerning problems that have arisen regarding USCIS’ interpretation of the laws on the Immigrant Investor Program.
Regarding Mr. Kurzban’s take on the proposed legislation, to sum up, he is not a fan. When asked whether we will ever get a legislative fix, Mr. Kurzban bluntly comments that he is not optimistic. He traces the uncertainty around any proposal’s implementation to the conceivably vast number of competing interests. Both Mona and Mr. Kurzban agree that waiting until the eleventh hour to present the last bill to the Democrats also contributed to the ultimate failure in reaching consensus on some of the most important issues, like TEA designation (one such question is who should have the authority to make determinations - should it be USCIS or state agencies).
Imputed Liability for Regional Centers:
Mr. Kurzban believes that the most pertinent, but often mysteriously overlooked, issue is the question of imputing liability for Regional Centers. This was not even raised by IIUSA (the largest trade association in the EB-5 industry)’s Public Policy Committee. One might speculate a scenario where a Regional Center does nothing wrong, learns of a problem caused by, for example, an external agent who has made a misrepresentation to an investor, and acts on it, but would still be held responsible and face punishment, such as disbarment or serious fines.
The current imputed liability framework limits the tools that people within the immigration community could use to protect themselves from agency overreach. It is crucial for it to be addressed properly and enjoy a fair share of attention, especially considering imputed liability was included in the failed proposal and is in the DHS regulations pending finalization in October 2018.
From the outset, the ability for engaging in judicial review in the EB-5 realm is already limited. In 1996, Congress passed the Illegal Immigration Reform and Immigrant Responsibility Act which stripped the federal courts in about 17 ways from suing the federal government or the immigration agency if they did anything improper or even flat-out wrong.
The proposed legislation further strengthens this by insulating from judicial review the most serious actions of USCIS, particularly actions that are directed towards Regional Centers and people who represent individual investors. Essentially, the government can engage in sanctions, yet the ability to correct the sanctions through legislation is highly circumscribed. The consequence would be severe and we, as an industry, should take strong stance on the issue as a result, and bring it to the attention of the regulators and members of Congress.
As Mr. Kurzban accurately points out, the difficulty is compounded since most people do not think about/feel the effect until they are subject to arbitrary action.
Has Too Much Authority Been Given to the SEC?
The SEC arrived late in the EB-5 program life. They did not have the opportunity to challenge the initial EB5 regulations. Mr. Kurzban believes there has been a failure to regulate some of the worst practices early on as they went unchecked until the SEC came in. The issue now is where the SEC should draw the line and what will be considered an overreach.
USCIS’ Ever-changing Interpretations
USCIS IPO has come up with new interpretations of their own regulations, even turning against themselves sometimes, along the way. One such classic example is USCIS’s denial in acknowledging EB-5 investment where an investor uses a loan against their family collateral as the source for his investment. USCIS has recently determined that this does not constitute a “cash investment” because the investor does not have ownership of the real property. Mr. Kurzban believes otherwise, arguing it should be considered as “cash”, as the funds are liquid cash ready to invest. If USCIS wants to judge otherwise, they should have left it as a source of funds question subject to regulation they do have authority over. Here, the issue is with USCIS’ misinterpretation or their own regulation or overzealousness as soon as they hear the word “fraud”.
Again, the limit of judicial review and imputed liability make it hard to counteract if an agency is being overzealous.
There is a sweeping consensus within the EB-5 industry that the 10,000-person EB-5 cap should not include the dependents of immigrant investors, such as spouses and children. Currently, only about 1 in 4 EB-5 visas go towards the investors themselves. The remaining visas are used up by the spouses and children of those investors. Even without addressing this through a new regulation, both Mona and Mr. Kurzban believe that there is an interpretation of the current language and power within the authorities to not count the derivatives against the 10,000-person EB-5 cap. Mr. Kurzban is currently working against this and Mona points out that some are being held as not to be impacted by retrogression.
Mr. Kurzban and five other immigration lawyers founded Immigrants’ List in 2006 as a response to the Illegal Immigration Reform and Immigrant Responsibility Act passed a decade earlier. It was the first and remains the largest pro-immigration political action committee.
Mr. Kurzban acknowledges that many people are not fans of political action committees. He felt the same way himself, but upon realization that hundreds of millions are being spent for candidates in opposition to immigration policies, he felt it would be a good tool to support pro-immigration initiatives.
Since then, about 70% of the pro-immigration candidates they have supported have won elections. Some were challenging but still successful as was the case for Catherine Cortez Mastos for the Nevada seat in the U.S. Senate.
Currently, Immigrants’ List is supporting Beto O’Rourke for one of a Senate seat from Texas. O’Rourke introduced a bill that would allow for waivers for limitations first presented in the Illegal Immigration Reform and Immigrant Responsibility Act.
In addition to supporting the campaigns of pro-immigration candidates, Immigrant’s List also recognizes the contributions of elected officials through the annual Michael Maggio Awards. This year they are recognizing a Senator for their support of Deferred Action for Childhood Arrivals (DACA) and Congresswoman Pramila Jayapal for her outspoken criticism of some of the Executive policies on immigration.
Support Immigrants’ List
Anyone can become a member of Immigrants’ List and U.S. Citizens are invited to support the Political Action Committee.
There are many reasons why the EB-5 community should consider supporting Immigrants’ List. Mr. Kurzban lays out a few, but here are a couple to note:
Visit http://www.ImmigrantsList.org/ to learn more.
Please see the link below for access to the podcast episode: http://mshahlaw.com/imputed-liability-immigrants-list-with-ira-kurzban/.
About the Author:
Hermione Krumm, Esq. is an associate attorney with Mona Shah and Associates Global. Hermione works with EB-5, corporate, merger and acquisition (M&A), intellectual property and foreign direct investment (FDI) matters involving China, the UK and the US. Hermione writes and comments frequently on current business and immigration issues. Her articles have been published by LexisNexis, ILW, EB-5info, EB-5 Supermarket, etc. Hermione received her LL.B. (Hons) from the University of Manchester School of Law (UK), and obtained her LL.M. from Cornell Law School. Hermione speaks fluent English, Mandarin and Cantonese.