By Uglobal Staff
A U.S. District Court in California on June 22 ruled in favor of a regional center which had challenged a former acting Homeland Security secretary's authority to enforce an increase in the EB-5 investment thresholds in 2019.
The judgement order, which in effect reverses the thresholds for direct EB-5 investment from $1.8 million to the previous levels of $1 million and from $900,000 to $500,000 in Targeted Employment Areas, has sparked a surge of interest in the EB-5 program among foreign investors, many who want to know how they can quickly take advantage of the developed situation.
The California-based Behring Regional Center, LLC, had challenged the Department of Homeland Security before the court, pleading that the government body had violated the Administrative Procedures Act (APA) when it amended EB-5 program regulations in July 2019. It claimed that former Acting Homeland Security Kevin McAleenan "was not properly serving in his position" when he invoked the Final Rule to make the changes in the program. The U.S. District Court of Northern District of California agreed with the claim and said in its judgement order that "McAleenan was not lawfully serving as Homeland Security Secretary when he promulgated the Final Rule".
McAleenan on July 21, 2019, signed the Final Rule which resulted in a huge increase of investment thresholds in the EB-5 program. After the Final Rule went into effect on Nov. 21, 2019, the Behring Regional Center filed a lawsuit on Dec. 21, 2020, alleging that the Homeland Security's move had "devastating effects on the program's participants and the ability to raise capital for job creating development projects."
For more details on the case and the EB-5 program, click here.
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