EB-5 Fraud in the Chicagoland region; SEC is investigating
February 25, 2013
by: Tejas Shah
In an important development, the SEC and USCIS are currently investigating the operations of a Chicago-based EB-5 investment center called the Intercontinental Regional Center Trust of Chicago (IRCTC) and its promoter, Mr. Anshoo Sethi, in connection with the promotion of its offering for the “Chicago Convention Center LLC” investment. The investment promised to build the world’s first zero carbon emission platinum LEED certified hotel and conference center near O’Hare Airport in Chicago.
The Complaint filed by the SEC alleges that Mr. Sethi and his associates fabricated agreements with hotels. The project sold more than $145 million in securities through limited partnership interests to EB-5 investors. The project was particularly heavily marketed in China, and more than 90% of the estimated $11 million in administrative fees collected from investors are estimated to have been spent. It is alleged that Mr. Sethi himself transferred $2.5 million to his personal bank account in Hong Kong.
The claims and documents provided by the IRCTC and Mr. Sethi, in hindsight, contain several obvious discrepancies. Mr. Sethi, at the age of 29, claims to have 15 years of experience in real estate management and development. The agreements between the project and many hotels such as Starwood, the Hyatt, and the Intercontinental Hotel Group were all forged.
A complaint has been filed in the federal district court for the Northern District of Illinois:http://www.sec.gov/litigation/complaints/2013/comp-pr2013-20.pdf
This unfortunate situation once again highlights the importance of conducting due diligence and retaining qualified immigration counsel for an EB-5 investment, even where such investments are to be made in regional centers.
Employment-based Immigration Updates
December 26, 2012
by: Tejas Shah
Proposed work authorization of H-4 dependent spouses:
The Department of Homeland Security has proposed an amendment of its regulations to extend the availability of employment authorization to H-4 dependent spouses of principal H-1B nonimmigrants who have begun the process of seeking lawful permanent resident status through employment, and have extended their authorized period of admission or “stay” in the U.S. under section 104(c) or 106(a) of Public Law 106-313, also known as the American Competitiveness in the Twenty-First Century Act of 2000 (AC21).
Allowing the eligible class of H-4 dependent spouses to work encourages professionals with high demand skills to remain in the country and help spur the innovation and growth of U.S. companies.
This proposed amendment must go through a lengthy review process and it may take a few more months before the Department of Homeland Security issues proposed regulations, which require notice and comment before they can then become final regulations.
H-1B visa filing dates for FY 2014:
H-1B visas subject to the annual cap of 65,000 to be filed for FY 2014 can be submitted to USCIS on April 1, 2013. The earliest start date for new H-1B applications is October 1, 2013, but of course not all applications are subject to the quota.
The cap has been exhausted earlier and earlier in recent years, and early preparation is critical to obtaining an approved H-1B petition for FY 2014. LCA processing times are currently at least 7 business days, and small employers in particular will need to ensure that they have adequate documents to warrant a timely approval.
Employers should identify all employees who may need H-1B work authorization and may be subject to the cap. Current F-1 or J-1 employees, individuals seeking to change to H-1B from another work status, and individuals who are presently outside the United States may all require cap-subject H-1B applications.
Employers who meet the USCIS’s requirements for exemptions from the quota, including institutions of higher education, related or affiliated nonprofit entities, nonprofit research organizations, or governmental research organizations, can submit H-1B petitions at any time during the year.
Dream Act- Deferred Action
July 24, 2012
by: Tejas Shah
On June 15, 2012, by Executive Order, President Barack Obama announced that the Department of Homeland Security would begin placing selected young people whose achievements and/or ties to the United States qualified them in a form of relief from removal called “deferred action”. Subsequently referred to as the “Dream Act”, the President’s announcement is law by executive order, rather than a law passed by Congress, and remains effective until rescinded by another executive order or by Congressional legislation.
Deferred action essentially provides a reprieve from removal to individuals who meet the stipulated guidelines. Qualifying under this Executive Order are those immigrants illegally present in the U.S. who are:
– Currently 30 years or younger;
– Have been in the U.S. for at least 5 years;
– Arrived before they turned 16 years old; and
– Graduated from a U.S. high school or earned a GED or are currently in school and don’t have a criminal record
Deferred action is not a lawful status in the United States and does not secure an individual’s long-term presence in the United States. It simply means that the government will not initiate removal proceedings against an individual who meets the above criteria. Deferred action thus grants these individuals:
– The right to remain in the United States with the approval of the government (so long as this executive order remains in place); and
– The right to apply for and to renew work permits every 2 years upon showing “economic necessity”;
Deferred action is a period of stay authorized by the Attorney General and an individual accrues no “unlawful presence” during this time period, thus shielding them at least temporarily from the harsh provisions of INA § 212(a)(9)(B).
Deferred Action can provide relief to individuals who have not yet been placed in removal proceedings, but it can also provide relief to individuals currently in removal proceedings or those to whom a final order of removal has been issued.
It is estimated that more than a million undocumented immigrants across the United States will benefit under these regulations. While final guidance is forthcoming, requests for deferred action are likely to be made to United States Citizenship and Immigration Services (USCIS) in some cases and to ICE (Immigration and Customs Enforcement) in other cases.
March 23, 2012
by: Tejas Shah
H-1B Quota for 2013
A basic overview of the H-1B quota:
The 2013 fiscal year H-1B visa quota opens on April 1, 2012. H-1B visas are available to individuals who will fill “specialty occupations” and require sponsorship by a U.S. employer. Employers sponsoring workers for H-1B status commit to paying the “prevailing wage”, as determined by the Dept. of Labor in the intended area of employment, to the worker for the duration of his or her H-1B status. The fees and costs associated with H-1B status cannot be deducted from the employee’s salary or otherwise assessed against the employee under binding immigration and labor law regulations. H-1B status can be accorded to an employee for a maximum of 3 years at any given time, and no employee can hold H-1B status for more than 6 years continuously unless they are beneficiaries of special exceptions set out in the American Competitiveness in the Twenty-First Century Act (“AC21”).
The quota permits the filing of 65,000 new petitions in every fiscal year. A special category of 20,000 additional quota slots are made available to applicants with U.S. Masters Degrees or another higher degree from the United States. Not every employee is necessarily subject to the quota. Employees exempted from the quota include:
1) Applicants for H-1B status who have held H-1B status in the past 6 years; OR
2) Individuals who are sponsored for H-1B status by an exempt employer;
Exempt employers include institutions of higher education or related or affiliated nonprofit entities (nonprofit research organizations and government research organizations are included).
Those institutions and individuals which are subject to the quota can file an application at any point on or after April 1, 2012, but the earliest available starting date for employment is October 1st, 2012. Many students may be eligible to continue their employment without interruption through October 1st, 2012, even if their F-1 status expires earlier than this date, based on the “cap-gap” regulations.
Institutions and individuals subject to the quota would generally need to pay the full filing fees associated with such an application, although an employer’s size impacts the amount of this fee.
Special considerations this year:
While much remains the same with respect to the H-1B regulations and laws, the past year has also seen important new developments resulting from new USCIS policies. In particular, the immigration agency has announced that owner-operated companies can in fact sponsor the owner of the institution for an H-1B. This is significant because it means that an individual entrepreneur can start a business and acquire H-1B status through sponsorship by the business where the business is either self-owned or a closely-held corporation. While not every USCIS announcement should be read literally, and it is important to carefully structure such a business in conjunction with an immigration attorney to establish that the owner does not wholly control the business opportunity, this announcement is a welcome reversal from the infamous Neufeld memorandum which stated unequivocally that no employer-employee relationship would be evident in such a scenario.
Other developments include USCIS’s increasing reliance on the VIBE system to confirm the bonafides of a particular employer and the continuing application of the new export control regulations which deem a foreign national’s work or exposure to information about specific classified technologies a “deemed export” requiring a license from either the Department of State, Commerce, or Treasury.
Finally, how soon will the quota fill up this year?
While it is anybody’s guess how quickly the quota will fill up this year, it is reasonably certain that it will fill up sooner than in past years. The onset of the recession in 2008 marked the first time in several years that the quota was not exhausted within the first few days of becoming available. More recently, the quota has been getting exhausted earlier each year. As hiring trends appear stronger and point towards gradual increases in hiring and demand for new workers, it is expected that the quota will fill up even earlier this year.
Employers are therefore encouraged to file new H-1B petitions sooner rather than later so that they do not miss the opportunity to utilize one of the FY2013 H-1B quota slots; the alternative is to wait the entire year for the FY2014 quota.
USCIS announcement shifting H-1B adjudication trends: The first step towards a pro-growth immigration policy?
October 21, 2011
BY: Tejas Shah
On August 2, 2011, USCIS announced a series of operational, policy, and outreach initiatives to spur job growth and fuel American economic competitiveness. The initiative included the publication of a fact sheet and announcement about the availability of the H-l B temporary visa category and the EB-2 National Interest Waiver category to foreign national entrepreneurs. Why does this matter? This article will explore the significance of this announcement, the corresponding policy initiatives and legal considerations, and suggest a few additional steps that the Agency might take to truly maximize the value of immigrants to our economic growth.
I. USCIS Announcement:
As background, this announcement appears to be driven by the renewed focus that the White House Council on Jobs and Competitiveness has placed on the special role of immigrants and our immigration policy to job growth and our economic competitiveness. There has long been criticism that the H-l B visa quota is artificially low, and that the country quotas, a relic of legislation that is now several decades old, are stifling and anti-competitive. While those topics are outside the scope of this announcement as they require legislative solutions, this announcement focuses on steps that are within the control of DHS and more specifically, United States Citizenship and Immigration Services, which is the Agency with authority to adjudicate applications for immigration benefits. The announcement makes it clear that the H-l B temporary visa category and the National Interest Waiver category, a form of permanent residency that does not require labor certification, are both available to immigrant entrepreneurs. The administration’s goal appears to be to stimulate additional foreign investment in the United States by offering immigrants and foreign entrepreneurs credible avenues for immigration and work authorization in the United States through companies that they establish.
This announcement does represent a policy shift, at least in the H-l B category. The now-infamous Neufeld Memorandum of January 8, 2010, had through administrative fiat suggested restrictions on the ability of a self-owned business to sponsor the owner for temporary H-l B status. This was at odds with years of prior policy and AAO decision-making. USClS’s announcement is certainly welcome as the Agency has reaffirmed the ability of owner-operated businesses to sponsor their owners for H-l B status as long as a valid employer-employee relationship is in place. While the announcement certainly does not affect many other long-standing legal requirements for an H-l B visa, it does eliminate what appeared to be a significant restriction on the ability of foreign national entrepreneurs and business owners to sponsor themselves for H-l B status established by the Neufeld memorandum. As such, it is an important step in providing foreign investors greater clarity and reliability in obtaining work-authorization in the United States. Yet, while this announcement is significant, it represents an incremental step. Once the economy returns to full strength, it is likely that we will return to the “good old days” (or bad days, depending on your perspective), when the entire quota of H-1 B visas for a given fiscal year was used up within days of availability. If the quota is not increased in the future, this will remain a persistent issue that will undermine the goal of using the H-1B visa category to stimulate foreign investment in the United States.
By comparison, the National Interest Waiver (NIW) category has always permitted entrepreneurs to apply for permanent residency. Unlike traditional investor-based categories, the issue in this category is not the size of the investment or the investor’s specific role in the business, but whether the entrepreneur can demonstrate that the establishment and operation of his/her business will produce significant national benefits and is of national interest. Creating jobs and employment in the United States is only one face of this impact as the entrepreneur can also demonstrate benefits to other areas of our national interest, such as scientific advancement or public health in the case of a new pharmaceutical company. The business plan and specific objectives for this business that the entrepreneur presents are certainly important. Equally if not more important, however, are the individual’s prior accomplishments. One example of a successful petition for a NIW includes an application from an individual with a recognized, extensive history of scientific research. Such an applicant could aggregate his/her business plans and prior accomplishments to showcase his/her collective prior and expected future impact on our national interests. Successfully showing that the foreign entrepreneur has contributed to the national interest in the past to a significantly greater degree than his/her peers is the key legal issue. Immigration attorneys and entrepreneurs should note that the benefits to our national interest will be viewed in light of the larger question, namely whether the foreign national can show that his/her continued residence in the United States will be of national benefit to the United States. Although job creation and corresponding economic benefits to the United States are certainly a significant net benefit, prior decisions and cases have consistently established that the benefits must be felt on a broader, nationwide scale and must not be localized in nature. Therefore, only creating a few jobs in one particular region without more could still be insufficient to meet the high standard for a NIW. What the announcement does not address is the persistent country quota-based backlogs in the NIW category for nationals of India and China. Since the availability of visas in this category is governed by the availability of visas in the EB-2 category, and there are currently three-to-four-year backlogs for nationals of India and China who are beneficiaries of EB-2 petitions, the attractiveness of a National Interest Waiver to investors from these countries is diminished. The relative current strength of the currencies of these countries and their greater insulation to a degree from global economic malaise makes the United States a particularly attractive investment destination for them. To the degree that the unavailability of visas interferes with this objective, Congressional action fixing the outdated country quota system incorporated into the Immigration and Nationality Act is needed.
II. Improving Entrepreneur Access to Other Visa Categories:
The H-1 B category and the NIW are not the only temporary or permanent visa categories that investors can utilize. Immigrant investors from nations with which the United States has signed appropriate treaties persistently utilize the E visa, while executives, managers, and specialized workers from qualifying multinational companies, including U.S. start-ups, often use the L visa. Entrepreneurs who can invest a million U.S. dollars (or half a million, in some cases) and create at least 10 jobs for U.S. citizen or legal permanent resident workers can use the EB-S investor category. Nevertheless, the trend in many of these areas has been towards more restrictive interpretations of these categories. To the agency’s credit, under the leadership of current Director Alejandro Mayorkas, USCIS has launched a series of initiatives to collect feedback from stakeholders, including immigration attorneys and advocates, about ways to improve USCIS adjudications. Uncertainties in the adjudication of applications for such classification interfere with the confidence of investors and willingness to make the investments in new business initiatives in the United States. Developing more consistent adjudication criteria for these visas would allow foreign entrepreneurs and investors to operate with greater assurances about the availability of work authorization and status in the United States for them, their family members, and essential personnel. This in turn would promote Congress’s goal of: (1) creating effective employment-based visa categories that promote business and trade in the United States; and (2) stimulating new investment and job growth in the United States. Given these high stakes, one hopes that DHS and the White House view this announcement as a first step, and not the destination in itself.
The original version of this article first appeared in the Globe, the newsletter publication of the Illinois State Bar Association’s Section on Intl. and Immigration Law.
CORPORATE COMPLIANCE- Requiring Too Many Documents for Employment is in Violation of the Law
August 23, 2011
BY: Tejas Shah
The Dept. of Justice Civil Rights Division’s Office of Special Counsel for Immigration Related Unfair Employment Practices today announced a settlement agreement with Farmland Foods, Inc., to resolve allegations that the company had engaged in restrictive and discriminatory hiring practices against foreign nationals and naturalized U.S. citizens. In addition to modifying its hiring practices, engaging in widespread training of human resources personnel, and monitoring and reporting under the terms of the settlement, Farmland Foods also agreed to pay $290,400 in civil penalties.
The Immigration and Nationality Act imposes a responsibility on U.S. employers through the I-9 verification process to ensure that every employee is authorized to work in the United States. Employers are required to verify both the identity and work authorization of employees while completing I-9 forms by reviewing specific documents provided by employees. Counterbalancing this responsibility, employers cannot impose different sets of requirements on employees based on their national origin or citizenship. Requiring all or even a subset of employees to produce only specific sets of documents, asking for more or different documents than required under the INA, or refusing to accept documents which are genuine on their face with the intent to discriminate represent restrictive hiring and unfair immigration-related employment practices under the Act.
Employers with 3 employees or less are excluded from the scope of the Act’s provisions, and in certain instances, the provisions of Title VII may apply instead of the Immigration and Nationality Act. Any hiring practices by U.S. employers are covered by the scope of the Act, and the range of sanctions for violations under the Act is extensive. Employers will not only be required to cease and desist from wrongful practices, they could also be required to retain records for all employees for 3 years, provide backpay, frontpay, and rehire employees who were discriminated against, and as this example shows, face extensive civil penalties. In the case of federal contractors and subcontractors, violations of these provisions could lead to debarment from future contracts.
While enforcement of these provisions has occasionally been sporadic, this settlement signifies that the Department of Justice is serious about holding employers responsible for engaging in immigration-related employment violations. The mandate of the INA to maintain robust employment eligibility verification mechanisms without engaging in discriminatory practices is a responsibility that an employer violates at its own peril.
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