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Immigrant investors on edge as EB-5 lapse enters eighth month

After the program sunsetted on July 1, USCIS put those investors’ green card applications on hold

Cardiologist Chandra Ojha is pictured during a recent medical procedure. He is among investors whose immigration applications are on hold.
Cardiologist Chandra Ojha is pictured during a recent medical procedure. He is among investors whose immigration applications are on hold. (Courtesy Chandra Ojha)

Dr. Chandra Ojha, a cardiologist in El Paso, Texas, is used to demanding work.

But lately, Ojha, who has waited more than three years for his green card through a since-expired government program, has been “feeling the stress.” It became so intense that a recent bout of chest pain spurred him to have a heart investigation done on himself.

Born in India and trained in London and the U.S., the 44-year-old Ojha filed his initial green card petition in 2018 based on a $500,000 investment in a California hotel under the EB-5 visa program. The program allows foreign investors who sink a certain amount of capital into a U.S. enterprise that creates American jobs to apply for permanent residency.

Investors may invest $500,000 in a project in an area of low employment, or $1 million elsewhere.

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“Now a lot of us investors are in limbo. We don’t know what’s going to happen. It’s not just about money. Our immigration is at stake,” Ojha said.

Strict country caps on visas, especially affecting people from India, have created such a long backlog for permanent resident status that some immigrants turned to EB-5 visas as an alternative.

But the EB-5 regional center program has lapsed twice since Ojha filed his request, first for over a month during a government shutdown in December 2018 and again after Congress did not reauthorize the program last summer.

Ojha is one of roughly 80,000 foreign citizens, including investors and their families, affected by the expiration of the EB-5 visa regional center program, a lapse that has stretched more than seven months.

“I feel like we have been completely abandoned, despite it not being our fault,” Ojha said.

While foreign citizens may still invest their money directly, the option to go through a government-designated regional center is now closed, and the fate of investors who already invested through one remains uncertain.

After the program sunsetted on July 1, U.S. Citizenship and Immigration Services put those investors’ green card applications on hold, leaving thousands in limbo at varying stages of the process.

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In late December, USCIS said it was “reevaluating the decision to hold, or not act on, any pending petition or application” related to an investment made through the regional center program filed before the program expired, and it would “provide additional guidance as soon as practical.”

A USCIS spokesperson confirmed last week the agency has put pending requests to become permanent residents on hold but would not comment on any future agency actions if the program remains lapsed.

“I have no idea what’s going to happen with getting even the investment back, let alone the green card,” said Sharad Reddy, a California-based EB-5 investor whose application was stalled by the lapse. “I might end up losing my money and not end up getting my green card at the end of the day.”

Congressional battles

The program’s lapse came amid a congressional stalemate over proposed “integrity” measures to make the EB-5 program, which has been rocked by high-profile scandals, less vulnerable to fraud.

For years, Sens. Patrick J. Leahy, D-Vt., whose home state dealt with one such EB-5 fraud case related to a ski resort, and Charles E. Grassley, R-Iowa, tried to usher through bipartisan legislation to reauthorize the regional center program for five years while adding in more safeguards to prevent fraud.

The EB-5 regional center program’s expiration date had been tied to federal government spending bills. But in December 2020, the program’s sunset was decoupled from annual appropriations and given an end date of June 30, 2021. Grassley made a last-ditch attempt to pass his bill to reauthorize and revise the program through unanimous consent in June, but Sen. Lindsey Graham, R-S.C., shot it down.

Since then, the regional center program has been left to languish, and the green card seekers who already made their investments with it.

Congress has tried to kick the can down the road with a stopgap bill to fund the government through March 11 that does not include language to reauthorize the regional centers. The bill is still in the Senate.

Grassley blamed Congress’ failure to revive the immigrant investor program on EB-5 visa abusers who “fought us at every turn, effectively sealing the program’s fate last summer.”

“The program is now dead, and it’ll remain that way until all corners of the industry wake up to the reality that Congress is not going to allow these abuses to continue,” he said in a statement.

Falling dominoes

If the program remains lapsed, key industry players say the U.S. could see significant fallout.

Ishaan Khanna, co-founder of the American Immigrant Investor Alliance, which represents the interests of EB-5 investors, predicted a “bank run” if EB-5 investors have their green cards denied because of the program’s expiration.

Litigation is also likely, both against USCIS to force the agency to process their applications and against the regional centers in an attempt to reclaim EB-5 investors’ funds, lawyers said.

“Anytime you’ve got somebody who’s disappointed with their investment, there’s always potential for lawsuits,” said Mark A. Katzoff, an attorney with Seyfarth Shaw LLP who represents EB-5 regional centers.

Aaron Grau, executive director of IIUSA, a nonprofit trade association for EB-5 regional centers, compared the scenario to the game Jenga — if enough investors pull their funds, whole projects will topple.

“The dominoes start to fall when the EB-5 investors start to believe that the deal they cut with the United States isn’t going to be honored,” he said.

The expiration of the program could also negatively impact the nation’s reputation abroad, particularly if Congress does not protect investors who filed petitions under the program before it lapsed.

“This is really the United States reneging on foreign direct investment that has been made in the country, and it makes people think twice about this,” said Khanna. “It’s going to be hard to recover from this.”

Family separation

Many investors and EB-5 stakeholders hope Congress will at least pass legislation to allow current EB-5 investors to finish their permanent residency cases, even if the program remains dead to future regional center investments.

While critics paint the immigrant investor program as a vehicle for fraud, its proponents have pushed back against that characterization, insisting that EB-5 is an essential job creation program worthy of congressional support.

Reddy, who works in technology in the Bay Area, described many fellow investors as “just doctors, engineers, professionals,” who came to the U.S. for school or work and found themselves “bogged down by the whole immigration process.”

Reddy has lived in the U.S. for nearly two decades. He said he was motivated to pursue permanent resident status in the U.S. by his two American citizen children, ages 6 and 9. He took out a mortgage against his home to finance his investment.

Yeni, an EB-5 applicant from Nigeria who asked for her last name to be withheld out of fear of immigration repercussions, also had family in mind when she and her husband decided to participate in the immigrant investor program.

She is currently pursuing a master’s in business administration in the U.S., while her husband awaits adjudication of their EB-5 visa application in Nigeria. The two share a 3-year-old daughter born in the U.S.

“It is not safe to raise a family in Nigeria right now,” Yeni said, pointing to recent attacks by terrorist group Boko Haram.

But her case remains in limbo. Her husband’s green card interview was in July 2021, just days after the program expired. Because of the pandemic and various travel restrictions, she and her husband have not seen each other since 2020.

Yeni said the prolonged time apart has negatively affected their relationship and kept their daughter from knowing her father. She sometimes regrets having chosen to invest in the U.S. immigration program.

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