Investing in the American Dream's Podcast

Ep.13_IIUSA President Bob Kraft Discusses USCIS Settlement Agreement with Regional Centers and EB-5 Stakeholders

August 26, 2022 Investing in the American Dream Season 2 Episode 13
Investing in the American Dream's Podcast
Ep.13_IIUSA President Bob Kraft Discusses USCIS Settlement Agreement with Regional Centers and EB-5 Stakeholders
Show Notes Transcript

We are excited to share some great news with EB-5 Investors and Regional Centers! USCIS has entered into a Settlement Agreement to resolve litigation disputes with EB-5 stakeholders and previously approved regional centers.  In this episode, we talked to Bob Kraft, President of IIUSA, to discuss a historic settlement agreement between IIUSA and USCIS that protects EB-5 investors while re-authorizing previously approved regional centers. In this podcast, we explore what initially led to this proceeding, the details of the settlement, and what this means for the future of the EB-5 visa program. We also examine the unprecedented open line of communication with USCIS and IIUSA, and future involvement.  

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On today's episode of investing in the American Dream podcast, we have IIUSA President and FPP CEO Bob Kraft. Bob is joining us today to discuss yesterday's USCIS settlement agreement with regional centers to resolve litigation disputes with EB five stakeholders. The settlement solidifies the preliminary junction injunction granted by Judge vince Chhabria, which allowed existing regional centers in good standing such as FPP to resume operating and filing the I 956 F application for approval of an investment in a commercial enterprise. In this episode, we will highlight why the lawsuit happened, what is included in the settlement, what it means for regional centers and investors and the future involvement between IIUSA and USCIS. Let's get into it. Bob. Peter, thank you both for joining us today. Oh, thank you, Jessica. Good. Thank you. So Bob, to kick things off. You know, why did EB five stakeholders originally bring legal action against USCIS? Yeah, I mean, it was absolutely necessary the Integrity Act, which we're very excited about. That's a five year authorization for the program, which we were talking about this the other day, not everybody knows this. But that's only the second five year authorization in the history of the program. In the first five year authorization was when the pilot program was established in 1992. So originally, when Congress decided that maybe they needed to make an adjustment to the EB five program in order to spur more investment, it was a five year pilot program. And but since then, it's been three years, two years, one years, and in some cases, just months. Yeah, you know, it's the program just kind of stumbled along. So the new Act, the Integrity Act, which was passed this year, authorized the program for five years and really good changes to protect the investors, it's good for regional centers is good for the industry, we now have surety for a five year period of time. And there were some guarantees put in to protect investors, which are very exciting. And then USCIS, USCIS came out with a declaration that regional centers would have to resubmit to be authorized, which didn't make any sense, or consistent with the laws so that that was the reason for the lawsuit. Okay, so kind of going off of that, what kind of action did the judge take? And how did that lead to this settlement? Well, there were a couple of different hearings and have to give the judge a lot of credit, he was very objective, and looked at it and it was actually a violation of congressional laws. The ruling, or the statement that came out from USCIS that cause the lawsuit, the judge did a really good job of kind of digging into it. And as I said, there are a couple of hearings, and eventually the judge issued an injunction against DHS, which was was really good, but it really didn't finalize the program in terms of the regional center authorities. The settlement agreement was a result of the injunction. So USCIS worked closely with the parties that brought the lawsuit and I USA was very involved in that kind of cleaned it up. And to the credit of the government, they were very cooperative. The changes that were agreed to actually improve the program. And it did authorize all regional centers that had been previously approved under the prior law, which is great. So So we're back in business fully we're five year authorized the program. It's really good for the industry. And we had a little bit of blip there. But in the end, it's going to be really good for the industry, because some aspects of the settlement are going to lead to ongoing communication with USCIS. And yeah, we can get into that in a minute. And I think too, it helps ensure investors really get a fair chance and selecting of what regional centers and what types of projects that they get to invest in and to choose, based on on that rather than only having a limited selection. Yeah, correct. I think that's really great for investors. So just to kind of go back to, you know, the negotiations with the settlement, like what did negotiations look like behind the scenes? Well, they as I said, USCIS was very open and very reasonable. I know that the industry there was an awful lot of pressure outside of the group that was authorized to interact directly with USCIS through our attorneys, you know, they were looking for insight what's what's happening. And it was very frustrating for those people that, as President of I USAA, had committed and been given authority, the officers had been given authority to represent the board of directors to negotiate in good faith and to respect the wishes of the attorneys that were leading the negotiations. So early on, some of the original drafts were leaked by somebody, I don't know who that was. But someone who was in that circle violated the commitments they had made, which I don't know if it was for, I assume it was for marketing advances. But we would not do that. Things were out. And we decided to respect counsels, requests, because it was sensitive in terms of going back and forth. And you get too many people involved in these things. And it takes on a life of its own. So fortunately, the majority of everybody involved did honor the commitment, and kept the negotiations to a small group of people, led by our attorneys, and, you know, we ended up with a great result. So it was the right call. I know it caused a lot of consternation. But, you know, that happens in these types of things. We're required to keep it confidential. In we honor our committee. Exactly. Yep. So I know that we've talked a lot about what led to this settlement. But what is actually included in the settlement, I understand that investors can now file I five to six e petitions 10 days after the regional center filed the i 956. F project applications. Yeah, that's correct. So if you were an authorized Regional Center, under the old program, you're authorized. And one of the agreements of the settlement was proof that you'd file the 956. And there was some confusion with respect or some discussion with respect to while we're not receiving receipt notices on a timely basis. But we're having our checks cashed or credit cards charged excetera, shouldn't that serve as proof of filing? And fortunately, and we're very pleased that the government agreed with that because administratively, from what we understand, there have been some changes within USCIS in terms of receipt processing, they outsource that to a group that's just kind of getting up to speed. So there have been delays and receipt notice, provision. So recognizing that they said, Yeah, if the check is cashed, clearly, you filed, right, so you're good. And that happens, like immediate, right? So the 10 day thing, that's that's actually could, it could be filed prior to that, if the check notice, comes through, and those checks seem to be cast right away. They don't have any problem. cash and checks or, or charging credit cards. But so it's, that's all good for the for the industry. And to your other point there, Peter, if you were in the program under the old program, so adjudications, 452, sixes, eight, two nines, those just continue. So the investor doesn't have anything to be worried about. And I guess yeah, that kind of brings me to the next question is that, you know, as of today, over eight weeks of existing regional centers became eligible to file the i 956. F. USCIS has had only issued a few of those receipts. So what does this do then? I guess, for investors that are waiting to file under their selected project. Well, they can file Yeah, right now. Yeah. Right. So we're, we're fully 100% back in business, and investors can kind of take advantage of the new allocation of visa is with no wait time as well. That's correct. And then they're set aside aspects of the new law, which for if you're a T EA or rural project, then that eliminates the lines for some of the countries that have had that impact program. So we have a project that is in a TI a Tallis Dallas in Southern California to look into palm Palm Springs area, which qualifies and it's a beautiful project. So we're very excited about that. And that's going to be great for investors. Yep, I agree. Speaking of investors, a lot of current investors might be a little skeptic Call about this, or they might be a little bit worried about the settlement just because they may not know what it means for them. So does this settlement have any benefits or protections for existing EB five investors? Yeah, it does. Absolutely. I mean, it clarifies some of the ambiguity that we've experienced under the old program. And the other thing that it does, which which is really good for the industry, and I, USA will be participating in this. It forces USCIS to meet on a quarterly basis with us to talk about issues surrounding versus the settlement agreement. But it will also provide there to our meetings an opportunity to address other issues, with processing times, etc, that we've not been able to have dialogue on in the past. That's huge. It's huge. It's really a big thing. And the, the attorneys have developed a really good relationship and dialogue with USCIS, we're not adversarial. In the relationship, it's a good program, it's good for the country and drive significant economic growth, they understand that, in they, from what we've received and heard, they truly want to make the program a success and have it run smoothly. So having that opportunity forced by the court for two years, to have that two hour meeting every quarter with a fixed agenda, which we'll be able to input to, is really, really critical. And it's a really good thing for investors and and for regional centers. It's good for everybody. Well, in all the efforts to that, you know, I USA and your efforts and advocacy. It just shows, you know, the integrity, integrity of the program, it's you know, it's it's changing, and it's becoming better and better and more beneficial for investors and the regional centers. Yeah, it's really good. That changes, shore up some of the shortcomings, if you will, the program, some of the soft spots, gray areas that people had taken advantage of, in a bad way. Not that there was a majority, it was a small minority. But I mean, it's, I've said this on past podcasts and industry functions that any industry, all industries have some bad actors, and it doesn't matter whether it's insurance, or banking, or manufacturing and pharmaceuticals. Unfortunately, there are bad people out there. And this program has taken off and been a very strong economic driver in the United States. And you're going to have some people that see a soft spot in the program, and take advantage of it in a lot of those loopholes, if you will, or soft spots have been addressed. And that's, that's good for the good regional centers, which are 99.9%. It certainly protects the investor. So it's a win all the way around. Yes. Yep. I agree. And I know you talked about USCIS hosting quarterly meetings with you, right? You are I USA? You know, and we haven't really had that open line of communication like this before. And, you know, what role do you see these meetings playing, moving forward? Well, it provides a platform to discuss about the issues that are impacting the industry, and it helps the government in and helps the industry, obviously, the spirit with which the settlement was came to conclusion was very positive. And I think it's great. A few years ago, we had a meeting all the board members of AI USA with the director of CIS, and we thought that was the beginning of an improved dialogue. And it was it was very worthwhile, but then they stopped, it just kind of it didn't happen again, and they were unwilling to meet in a forum like that. This change is that this forces it by the court, so it's something that they have to do in order to be compliant with the court's decision. So it's going to happen plus the people that are involved now seem to be much more receptive, CIS standpoint. So I'm very excited about it. You know, I was a little frustrated also, like everybody was that we couldn't share more information. But again, we've made a commitment and we got to a good place. So it's, it's a big win for everybody. It really answered and it's great for our investors and investors that are looking, you don't even know that other regional regional centers in different projects. So bottom line, obviously, this settlement was one of the most positive things to happen in recent EB five history. And we believe that USCIS was really very accommodating and they that they did end up doing the right thing. Do you think that they have future plans to continue improving the process for India? astor's or do you think that we will see more lawsuits in the future? Well, I mean, that's a good question. The lawsuit, Avenue was effective. And it's been used in the past. But But I think the industry looks at it is if we have to do that, we will do that. Because they seem to respond to lawsuits. I don't know what the issue might be. To say that we won't have any disagreements and conflict with the government over the program would be naive. Our role as the advocacy group for the industry is to protect the investor and represent the regional center interests, plus all the ecosystem that goes along with it, the construction companies, the lawyers, it's a very, very large, complex industry. So if we see something that is not working properly, and we will certainly file normal, challenge routes, if you will. But if we're not getting an answer, we will do what we have to do to force dialogue. I hope that we don't have to roll that way. But to say that it won't happen in the future would be naive, you know, our job is to again, protect the industry represents represent the rights of the investor and the regional centers. So we will continue to, to do that. That's great. Well, I know in this, you know, episode, we talked about, you know, why the lawsuit happened, what's included in the salary settlement, you know, what it means for regional centers and investors, and then the future dialogue between IR USA and US CIS. But is there anything else that you'd like to add, for our audience? And for our listeners? No, I, you know, one of the things that we've seen just recently as renewed interest in Eb five, globally, the interest level is very high. So even though the investment amount was moved from 500 to $800,000, that doesn't seem to be an issue at all. And now that we know, we have a clear path to run on, we're very excited with the interest in engagement with investors on the silver rock project Tallis project in California. I've talked to other regional centers that say they're seeing the same thing that there's no question people want to come to America, the pricing is not an issue. And now that we have clarity with respect to the rules, you know, they're getting their documents together and submitting. So it's, it's good, it's good to be back in business. Five years, was really significant. I had the opportunity to speak with Senator Cornyn. This week, he was in our offices here, about an hour with him. And he was very, very helpful with Senator Grassley, Senator Leahy and others to move this legislation forward. And he recognized as we talked about, you know, our next challenge from as an industry is to increase the visa amount. There are a number of other things that we'd like to see. And he's very open to that he sees it as a very positive economic driver. And we're going to have their support. And there'll be other issues that we'll want to work on to improve the industry. But we should all celebrate, and feel very good about where we are right now. It's been a long battle was really an eight year battle to get the program reformed. And, and I think we ended up at a very, very good place. And the settlement was kind of the icing on the top of the cake, if you will, in the clarified issues that have been raised by USCIS and ended up protecting the investors, even even more so than the original, the most recent and it's absolutely right. It's great. So when a win win for everyone, really and like you said, it's just ensures the integrity of the program. And, you know, the security for investors that they're making the right choice and choosing the right investment with the right regional center. So Yep, absolutely. Big win. Absolutely. Thank you, Bob, we really appreciate you coming on and talking with us this morning. Yeah, my pleasure. My pleasure. It's an exciting time for EB five and everybody should be feel really good about it. Wonderful. Well, thanks again to Peter, as well for joining us. And you, Bob, and thank you and make sure that you look into the Tallis silver rock FPP project. It's in a TA. You know, it's part of that set aside class. So it's a really exciting project that we're getting good feedback on single census to EA 40 jobs per investor. You know, it's an 18% unemployment rate, and meets all the other requirements does This is under construction with a great developer owner in the Robert Greene companies of San Diego. World class, so we're, we're very excited about it. Yeah. And if listeners want to know more about it, we did actually just have a podcast, the last episode with Jeff Yamaguchi, the Senior VP of sales and real estate. Yeah, he's great. He's great and so well, great. Well, thank you, Bob. And thank you. Appreciate it. We'll see you soon. Thank you very much. If you would like to know more about first pathway partners, and how they can help you with a direct EB five investment, or if you're looking for other visa opportunities, such as an E two visa, please contact them directly online at www dot first pathway.com