DHS Wants Suit Over Investor Visa Denials Tossed

The U.S. Department of Homeland Security moved Thursday to throw out a lawsuit claiming it capriciously denied EB-5 investor visas to more than a dozen U.S. resident aliens, telling a D.C. federal judge there was no real risk the individuals could lose their investment funds.

American Logistics International LLC sued DHS in May, claiming the agency violated federal law and U.S. Citizenship and Immigration Services policy when it denied form I-526 petitions by immigrant investors or delayed action on form I-526 or I-829 petitions. I-829 petitions are filed to remove the conditional status of permanent residency and obtain permanent green cards.

In a motion to dismiss, the DHS defended its decision to deny the petitions, saying the individuals weren’t eligible for a visa because their investments were not “at risk,” which is a requirement of the EB-5 program. The agency pointed to an agreement the investors signed with American Logistics’ corporate partners, which it claims allowed them to withdraw their money during the petition process.

“An alien investor cannot satisfy the ‘at risk’ requirement ... by merely transferring the required capital amount into a bank account held by the new commercial enterprise while retaining the unilateral right to withdraw the capital during the I-526 petition process,” wrote an attorney for the U.S. Department of Justice, which is representing DHS and USCIS in the suit.

The government added that there were questions in three cases as to whether the invested capital was obtained through “lawful means.”

DHS also argued that American Logistics, an approved USCIC-designated regional center under the Immigrant Investor Program, and its affiliated corporate entities failed to show they have been injured by the denials, leaving them with no standing to bring the lawsuit.

“Because USCIS did not abuse its discretion, plaintiffs fail to state a claim for relief under the [Administrative Procedures Act],” the agency wrote.

Jason D. Wright of Mark S. Zaid PC, an attorney for the plaintiffs, told Law360 on Friday his clients looked forward to addressing the government's arguments with court filings in the days ahead.

"The case is not only about preserving the integrity of the EB-5 immigrant-investor program, but also about protecting American jobs," Wright wrote in an email. "This is a very real and processing concern that the government continues to overlook - real jobs for American workers hang in the balance.”

The EB-5 visa provides green cards to foreign citizens who invest more than $500,000 in "job creating" industries within the U.S.

According to its lawsuit, American Logistics pools this amount from individual investors to create an equity investment into new commercial enterprises, which it then uses to acquire and upgrade certain assets. The suit named a number of new commercial enterprises and affiliated corporate entities, as well as 15 individual investors from Iran and Vietnam as plaintiffs.

The plaintiffs' attorneys said previously the 15 individuals represent a sample of the total number of investors involved. The complaint seeks declaratory and injunctive relief under the APA.

American Logistics contends the underlying motivation for the petition denials was likely because of an unsubstantiated claim made by Senate Judiciary Committee Chairman Charles E. Grassley, R-Iowa, in 2013, and a “sensational” ABC News “Nightline” segment that aired in February suggesting that the regional center has concerning ties to Iran.

Responding on Thursday, the federal government called these claims a “fanciful allegation" and said the statements were not evidence the agency abused it discretion.

“Additionally, plaintiffs’ allegation that ‘ABC’s Nightline reporting’ had any bearing on USCIS’s decisions is easily debunked where all but three of the petitions were denied before the Feb. 3, 2015, airdate,” the government argued.

The plaintiffs are represented by Bradley P. Moss, Mark S. Zaid and Jason D. Wright of Mark S. Zaid PC.

The government is represented by Yamileth G. Davila of the U.S. Department of Justice.

https://www.law360.com/articles/685660/dhs-wants-suit-over-investor-visa-denials-tossed

Mentions

• U.S. Citizenship and Immigration Services
• American Logistics International, LLC

Litigation Cases

• American Logistics International, LLC vs U.S. Citizenship and Immigration Services