Recently US Citizenship and Immigration Services (“USCIS”) began posting some of the Termination Notices for regional centers that have lost their designation. While not every Termination Notice has been published, some patterns have emerged as to the common reasons for termination.
Of the 151 terminated regional centers, 34 have termination notices published on USCIS’s website. The most common reason for termination is failure to timely file Form I-924A, which is used to provide USCIS with updated information to demonstrate that the regional center is continuing to promote economic growth, improved regional productivity, job creation, or increased domestic capital investment. Between May 2015 and November 2016, at least 15 regional centers were terminated because they did not timely file Form I-924A.
The second most common reason for termination was a failure to obtain capital investments and create jobs. In at least 14 termination notices, this reason was given as a basis for termination. In many cases, this failure to create jobs was evident from 3 or more years of I-924A filings.
Two of the regional centers terminated due to failure to obtain investment and create jobs were controlled by Victoria Chan. California Investment Immigration Fund, the regional center associated with Ms. Chan’s recent conviction does not yet appear on the list of terminated regional centers. Since most of the details of her case are not publicly available, it’s difficult to know what role, if any, these regional centers had in the investigation of Ms. Chan.
One regional center, Luca Energy Fund, was terminated due to an SEC complaint and bankruptcy filing. According to the Notice of Intent to Terminate (“NOIT”) these two cases demonstrated a lack of credibility regarding the regional center’s ability to promote economic growth. Specifically, an order issued in the SEC case prohibited the regional center’s officers from engaging in routine business activities required to promote economic growth. The lack of ability to promote economic growth was also evident in an affidavit filed in the bankruptcy case stating that the regional center had “reduced and will continue to reduce the number of employees as operations are curtailed.”
Interestingly, Velocity Regional Center, an affiliate of defendants in an SEC action was terminated due to failure to file Form I-924A, rather than based on the developments in the SEC case. In SEC v. Yin Nan Michael Wang et. al, the court issued a preliminary injunction order on April 1, 2014. Pursuant to this order, the defendants were enjoined from engaging in transactions involving the property of “affiliates” which included the Velocity Regional Center. Although this order would have the effect of prohibiting officers from engaging in “routine business activities required to promote economic growth” USCIS did not issue a NOIT to Velocity Regional Center until March 24, 2016.
In summary, failure to promote economic growth and failure to timely file Form I-924A are the most common reasons for regional center termination based on the data available so far. Although SEC actions are also a common reason for termination, most of the NOITs for termination on this basis are not publicly available yet. In at least one case, a regional center affiliated with the defendants in an SEC action was able to maintain its designation for approximately two years after issuance of a preliminary injunction.