CIVITAS CAPITAL GROUP SUES USCIS FOR "ASTOUNDING" EB-5 FILING FEE INCREASE

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Apr 25, 2024, 12:31 ET

DALLAS, April 25, 2024 /PRNewswire/ -- Civitas Capital Group, a leading regional center operator and investment manager offering niche U.S. real estate opportunities to EB-5 investors around the world, today filed a lawsuit against U.S. Citizenship and Immigration Services ("USCIS") seeking to invalidate a January 2024 "final rule" that would, quoting from the lawsuit, increase filing fees for EB-5 related petitions "by astounding amounts (in excess of 200%) in clear violation of the EB-5 Reform and Integrity Act ("RIA"), the Regulatory Flexibility Act ("RFA"), the Immigration and Nationality Act ("INA"), the Administrative Procedure Act ("APA") and internal guidelines established by the Office of Management and Budget ("OMB")."

Dallas-based Civitas filed the suit in the U.S. District Court for the Northern District of Texas – the firm's backyard – alongside EB-5 trade association Invest in the USA ("IIUSA") and 10 other regional center plaintiffs. The lawsuit asks the court to set aside the EB-5 fee increases until USCIS has completed a required fee study and otherwise complied with applicable law.

The lawsuit further states: "USCIS' EB-5 fees are arbitrary and capricious and in violation of law in that USCIS did not accurately determine the cost of [adjudicating EB-5 petitions], did not base the fees on actual time spent adjudicating cases and did not credibly estimate the amount of time required to process EB-5-related petitions."

Daniel J. Healy, CEO of Civitas and a chief architect of the industry effort to set aside the increase, says the fees, if left standing, would be an enormous, unfair increase in cost to both individual EB-5 investors and regional centers. "USCIS has a job to do and needs funding from fees to do it. No problem, that's the law. But Congress was quite clear about how these fees should be calculated. It's obvious that if and when USCIS conducts the required fee study using accurate data in place of their wildly erroneous assumptions, the resulting fees will be far, far lower."

USCIS' rule increased fees for EB-5 filings across the board, failing to even distinguish between costs for large filings versus one-page forms.

"USCIS is charging $48,000 to adjudicate a petition to establish a new regional center. We will prove this fee is egregious, but at least they're charging it for reviewing a substantive filing," Healy said. "They are charging the same $48,000 to review a simple form noticing them of a regional center name change, where there is literally nothing to adjudicate. Same fee to be informed of the departure of a senior employee," Healy says. "What could possibly justify this?"

Healy continues: "Without conducting a fee study – which they are required to do by law – and without determining the actual cost of services related to EB-5 petitions – which they are also required to do by law, USCIS arbitrarily announced these fees. It's jaw-dropping."

According to IIUSA, the EB-5 program has generated over $32 billion in foreign direct investment since its inception – at no cost to U.S. taxpayers.

Healy, a member of the IIUSA Board of Directors, says this unheard-of USCIS fee increase is unfair to investors, the backbone of the job-creating machine that is the EB-5 program. "We're not going to stand for it," he says. "We are going to fight for our investors."

In Texas alone, Civitas's EB-5 projects have created more than 18,000 jobs since 2009.

ABOUT CIVITAS CAPITAL GROUP

Civitas Capital Group is a nimble alternative investment manager offering compelling, niche opportunities in U.S. real estate. Civitas exists to create opportunities that enrich our communities, investors, and employees alike. Driven by relentless creativity, Civitas digs deeper to uncover opportunities that others miss. Follow Civitas Capital Group on LinkedIn. Learn more at civitascapital.com.

SOURCE CIVITAS CAPITAL GROUP