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Unknown (00:02):
On today's episode of
investing in the American Dream
podcast, we have IIUSA Presidentand FPP CEO Bob Kraft. Bob is
joining us today to discussyesterday's USCIS settlement
agreement with regional centersto resolve litigation disputes
with EB five stakeholders. Thesettlement solidifies the
(00:22):
preliminary junction injunctiongranted by Judge vince Chhabria,
which allowed existing regionalcenters in good standing such as
FPP to resume operating andfiling the I 956 F application
for approval of an investment ina commercial enterprise. In this
episode, we will highlight whythe lawsuit happened, what is
(00:44):
included in the settlement, whatit means for regional centers
and investors and the futureinvolvement between IIUSA and
USCIS. Let's get into it. Bob.
Peter, thank you both forjoining us today.
Oh, thank you, Jessica. Good.
Thankyou. So Bob, to kick things off.
You know, why did EB fivestakeholders originally bring
legal action against USCIS?
(01:08):
Yeah, I mean, it was absolutelynecessary the Integrity Act,
which we're very excited about.
That's a five year authorizationfor the program, which we were
talking about this the otherday, not everybody knows this.
But that's only the second fiveyear authorization in the
history of the program. In thefirst five year authorization
was when the pilot program wasestablished in 1992. So
(01:31):
originally, when Congressdecided that maybe they needed
to make an adjustment to the EBfive program in order to spur
more investment, it was a fiveyear pilot program. And but
since then, it's been threeyears, two years, one years, and
in some cases, just months.
(01:51):
Yeah, you know, it's the programjust kind of stumbled along. So
the new Act, the Integrity Act,which was passed this year,
authorized the program for fiveyears and really good changes to
protect the investors, it's goodfor regional centers is good for
the industry, we now have suretyfor a five year period of time.
(02:14):
And there were some guaranteesput in to protect investors,
which are very exciting. Andthen USCIS, USCIS came out with
a declaration that regionalcenters would have to resubmit
to be authorized, which didn'tmake any sense, or consistent
with the laws so that that wasthe reason for the lawsuit.
(02:34):
Okay, so kind of going off ofthat, what kind of action did
the judge take? And how did thatlead to this settlement?
Well, there were a couple ofdifferent hearings and have to
give the judge a lot of credit,he was very objective, and
looked at it and it was actuallya violation of congressional
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laws. The ruling, or thestatement that came out from
USCIS that cause the lawsuit,the judge did a really good job
of kind of digging into it. Andas I said, there are a couple of
hearings, and eventually thejudge issued an injunction
against DHS, which was wasreally good, but it really
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didn't finalize the program interms of the regional center
authorities. The settlementagreement was a result of the
injunction. So USCIS workedclosely with the parties that
brought the lawsuit and I USAwas very involved in that kind
of cleaned it up. And to thecredit of the government, they
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were very cooperative. Thechanges that were agreed to
actually improve the program.
And it did authorize allregional centers that had been
previously approved under theprior law, which is great. So So
we're back in business fullywe're five year authorized the
program. It's really good forthe industry. And we had a
(04:00):
little bit of blip there. But inthe end, it's going to be really
good for the industry, becausesome aspects of the settlement
are going to lead to ongoingcommunication with USCIS. And
yeah, we can get into that in aminute.
And I think too, it helps ensureinvestors really get a fair
chance and selecting of whatregional centers and what types
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of projects that they get toinvest in and to choose, based
on on that rather than onlyhaving a limited selection.
Yeah, correct. I think that'sreally great for investors. So
just to kind of go back to, youknow, the negotiations with the
settlement, like what didnegotiations look like behind
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the scenes?
Well, they as I said, USCIS wasvery open and very reasonable. I
know that the industry there wasan awful lot of pressure outside
of the group that was authorizedto interact directly with USCIS
through our attorneys, you know,they were looking for insight
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what's what's happening. And itwas very frustrating for those
people that, as President of IUSAA, had committed and been
given authority, the officershad been given authority to
represent the board of directorsto negotiate in good faith and
to respect the wishes of theattorneys that were leading the
negotiations. So early on, someof the original drafts were
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leaked by somebody, I don't knowwho that was. But someone who
was in that circle violated thecommitments they had made, which
I don't know if it was for, Iassume it was for marketing
advances. But we would not dothat. Things were out. And we
decided to respect counsels,requests, because it was
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sensitive in terms of going backand forth. And you get too many
people involved in these things.
And it takes on a life of itsown. So fortunately, the
majority of everybody involveddid honor the commitment, and
kept the negotiations to a smallgroup of people, led by our
attorneys, and, you know, weended up with a great result. So
(06:18):
it was the right call. I know itcaused a lot of consternation.
But, you know, that happens inthese
types of things. We're requiredto keep it confidential. In we
honor our committee. Exactly.
Yep. So I know that we've talkeda lot about what led to this
settlement. But what is actuallyincluded in the settlement, I
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understand that investors cannow file I five to six e
petitions 10 days after theregional center filed the i 956.
F project applications.
Yeah, that's correct. So if youwere an authorized Regional
Center, under the old program,you're authorized. And one of
the agreements of the settlementwas proof that you'd file the
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956. And there was someconfusion with respect or some
discussion with respect to whilewe're not receiving receipt
notices on a timely basis. Butwe're having our checks cashed
or credit cards chargedexcetera, shouldn't that serve
as proof of filing? Andfortunately, and we're very
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pleased that the governmentagreed with that because
administratively, from what weunderstand, there have been some
changes within USCIS in terms ofreceipt processing, they
outsource that to a group that'sjust kind of getting up to
speed. So there have been delaysand receipt notice, provision.
So recognizing that they said,Yeah, if the check is cashed,
(08:00):
clearly, you filed, right, soyou're good. And that happens,
like immediate, right? So the 10day thing, that's that's
actually could, it could befiled prior to that, if the
check notice, comes through, andthose checks seem to be cast
right away. They don't have anyproblem. cash and checks or, or
charging credit cards. But soit's, that's all good for the
(08:23):
for the industry. And to yourother point there, Peter, if you
were in the program under theold program, so adjudications,
452, sixes, eight, two nines,those just continue. So the
investor doesn't have anythingto be worried about.
(08:44):
And I guess yeah, that kind ofbrings me to the next question
is that, you know, as of today,over eight weeks of existing
regional centers became eligibleto file the i 956. F. USCIS has
had only issued a few of thosereceipts. So what does this do
then? I guess, for investorsthat are waiting to file under
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their selected project.
Well, they can file Yeah, rightnow. Yeah. Right. So we're,
we're fully 100% back inbusiness,
and investors can kind of takeadvantage of the new allocation
of visa is with no wait time aswell.
That's correct. And then they'reset aside aspects of the new
law, which for if you're a T EAor rural project, then that
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eliminates the lines for some ofthe countries that have had that
impact program. So we have aproject that is in a TI a Tallis
Dallas in Southern California tolook into palm Palm Springs
area, which qualifies and it's abeautiful project. So we're very
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excited about that. And that'sgoing to be great for investors.
Yep,I agree. Speaking of investors,
a lot of current investors mightbe a little skeptic Call about
this, or they might be a littlebit worried about the settlement
just because they may not knowwhat it means for them. So does
this settlement have anybenefits or protections for
existing EB five investors?
(10:12):
Yeah, it does. Absolutely. Imean, it clarifies some of the
ambiguity that we've experiencedunder the old program. And the
other thing that it does, whichwhich is really good for the
industry, and I, USA will beparticipating in this. It forces
USCIS to meet on a quarterlybasis with us to talk about
(10:34):
issues surrounding versus thesettlement agreement. But it
will also provide there to ourmeetings an opportunity to
address other issues, withprocessing times, etc, that
we've not been able to havedialogue on in the past. That's
huge. It's huge. It's really abig thing. And the, the
attorneys have developed areally good relationship and
(10:57):
dialogue with USCIS, we're notadversarial. In the
relationship, it's a goodprogram, it's good for the
country and drive significanteconomic growth, they understand
that, in they, from what we'vereceived and heard, they truly
want to make the program asuccess and have it run
smoothly. So having thatopportunity forced by the court
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for two years, to have that twohour meeting every quarter with
a fixed agenda, which we'll beable to input to, is really,
really critical. And it's areally good thing for investors
and and for regional centers.
It's good for everybody.
Well, in all the efforts tothat, you know, I USA and your
efforts and advocacy. It justshows, you know, the integrity,
(11:42):
integrity of the program, it'syou know, it's it's changing,
and it's becoming better andbetter and more beneficial for
investors and the regionalcenters. Yeah, it's
really good. That changes, shoreup some of the shortcomings, if
you will, the program, some ofthe soft spots, gray areas that
(12:03):
people had taken advantage of,in a bad way. Not that there was
a majority, it was a smallminority. But I mean, it's, I've
said this on past podcasts andindustry functions that any
industry, all industries havesome bad actors, and it doesn't
matter whether it's insurance,or banking, or manufacturing and
(12:25):
pharmaceuticals. Unfortunately,there are bad people out there.
And this program has taken offand been a very strong economic
driver in the United States. Andyou're going to have some people
that see a soft spot in theprogram, and take advantage of
it in a lot of those loopholes,if you will, or soft spots have
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been addressed. And that's,that's good for the good
regional centers, which are99.9%. It certainly protects the
investor. So it's a win all theway around. Yes.
Yep. I agree. And I know youtalked about USCIS hosting
quarterly meetings with you,right? You are I USA? You know,
and we haven't really had thatopen line of communication like
(13:09):
this before. And, you know, whatrole do you see these meetings
playing, moving forward?
Well, it provides a platform todiscuss about the issues that
are impacting the industry, andit helps the government in and
helps the industry, obviously,the spirit with which the
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settlement was came toconclusion was very positive.
And I think it's great. A fewyears ago, we had a meeting all
the board members of AI USA withthe director of CIS, and we
thought that was the beginningof an improved dialogue. And it
was it was very worthwhile, butthen they stopped, it just kind
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of it didn't happen again, andthey were unwilling to meet in a
forum like that. This change isthat this forces it by the
court, so it's something thatthey have to do in order to be
compliant with the court'sdecision. So it's going to
happen plus the people that areinvolved now seem to be much
more receptive, CIS standpoint.
So I'm very excited about it.
(14:21):
You know, I was a littlefrustrated also, like everybody
was that we couldn't share moreinformation. But again, we've
made a commitment and we got toa good place. So it's, it's a
big win for everybody. It reallyanswered and it's great for our
investors and investors that arelooking, you don't even know
that other regional regionalcenters in different projects.
(14:41):
So bottom line, obviously, thissettlement was one of the most
positive things to happen inrecent EB five history. And we
believe that USCIS was reallyvery accommodating and they that
they did end up doing the rightthing. Do you think that they
have future plans to continueimproving the process for India?
astor's or do you think that wewill see more lawsuits in the
(15:02):
future?
Well, I mean, that's a goodquestion. The lawsuit, Avenue
was effective. And it's beenused in the past. But But I
think the industry looks at itis if we have to do that, we
will do that. Because they seemto respond to lawsuits. I don't
(15:24):
know what the issue might be. Tosay that we won't have any
disagreements and conflict withthe government over the program
would be naive. Our role as theadvocacy group for the industry
is to protect the investor andrepresent the regional center
(15:44):
interests, plus all theecosystem that goes along with
it, the construction companies,the lawyers, it's a very, very
large, complex industry. So ifwe see something that is not
working properly, and we willcertainly file normal, challenge
routes, if you will. But ifwe're not getting an answer, we
(16:05):
will do what we have to do toforce dialogue. I hope that we
don't have to roll that way. Butto say that it won't happen in
the future would be naive, youknow, our job is to again,
protect the industry representsrepresent the rights of the
investor and the regionalcenters. So we will continue to,
(16:25):
to do that.
That's great. Well, I know inthis, you know, episode, we
talked about, you know, why thelawsuit happened, what's
included in the salarysettlement, you know, what it
means for regional centers andinvestors, and then the future
dialogue between IR USA and USCIS. But is there anything else
that you'd like to add, for ouraudience? And for our listeners?
No, I, you know, one of thethings that we've seen just
(16:48):
recently as renewed interest inEb five, globally, the interest
level is very high. So eventhough the investment amount was
moved from 500 to $800,000, thatdoesn't seem to be an issue at
all. And now that we know, wehave a clear path to run on,
we're very excited with theinterest in engagement with
(17:12):
investors on the silver rockproject Tallis project in
California. I've talked to otherregional centers that say
they're seeing the same thingthat there's no question people
want to come to America, thepricing is not an issue. And now
that we have clarity withrespect to the rules, you know,
they're getting their documentstogether and submitting. So
(17:34):
it's, it's good, it's good to beback in business. Five years,
was really significant. I hadthe opportunity to speak with
Senator Cornyn. This week, hewas in our offices here, about
an hour with him. And he wasvery, very helpful with Senator
(17:54):
Grassley, Senator Leahy andothers to move this legislation
forward. And he recognized as wetalked about, you know, our next
challenge from as an industry isto increase the visa amount.
There are a number of otherthings that we'd like to see.
And he's very open to that hesees it as a very positive
economic driver. And we're goingto have their support. And
(18:20):
there'll be other issues thatwe'll want to work on to improve
the industry. But we should allcelebrate, and feel very good
about where we are right now.
It's been a long battle wasreally an eight year battle to
get the program reformed. And,and I think we ended up at a
very, very good place. And thesettlement was kind of the icing
on the top of the cake, if youwill, in the clarified issues
(18:43):
that have been raised by USCISand ended up protecting the
investors, even even more sothan the original, the most
recent andit's absolutely right. It's
great. So when a win win foreveryone, really and like you
said, it's just ensures theintegrity of the program. And,
you know, the security forinvestors that they're making
(19:06):
the right choice and choosingthe right investment with the
right regional center. SoYep, absolutely. Big win.
Absolutely.
Thank you, Bob, we reallyappreciate you coming on and
talking with us this morning.
Yeah, my pleasure. My pleasure.
It's an exciting time for EBfive and everybody should be
feel really good about it.
(19:29):
Wonderful. Well, thanks again toPeter, as well for joining us.
And you, Bob, andthank you and make sure that you
look into the Tallis silver rockFPP project. It's in a TA. You
know, it's part of that setaside class. So it's a really
exciting project that we'regetting good feedback on
(19:49):
single census to EA40 jobs per investor. You know,
it's an 18% unemployment rate,and meets all the other
requirements doesThis is under construction with
a great developer owner in theRobert Greene companies of San
Diego. World class, so we're,we're very excited about it.
(20:11):
Yeah. And if listeners want toknow more about it, we did
actually just have a podcast,the last episode with Jeff
Yamaguchi, the Senior VP ofsales and real estate.
Yeah, he's great. He's great andso well, great. Well, thank you,
Bob. And thank you.
Appreciate it.
We'll see you soon.
Thank you very much.
(20:39):
If you would like to know moreabout first pathway partners,
and how they can help you with adirect EB five investment, or if
you're looking for other visaopportunities, such as an E two
visa, please contact themdirectly online at www dot first
pathway.com