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Chung et al v. USCIS et al EB-5 investor complaint
 

Chung et al v. USCIS et al EB-5 investor complaint

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Complaint filed by EB-5 investor in the failed SDRC Dairy Farm.

Complaint filed by EB-5 investor in the failed SDRC Dairy Farm.

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    Chung et al v. USCIS et al EB-5 investor complaint Chung et al v. USCIS et al EB-5 investor complaint Document Transcript

    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 1 of 25 Page ID #:3 Counselfor Plaintijft: ID 0 -< r.r- !"-.) f.~::> !" ··ry SUKIKIM ·- ;·J -,:.>( f._) ~~~ California Bar#: 242573 . . . . ?~e:: ... .-::.:: J-=- ;- ~.·1 Cl ;;;,._ 2677 N. Main St. -, 1::1 f••<) -;.fo·· ... ~, Suite 1070 - l ··I .. ,....... :·J -u Santa Ana, CA 92705 i.: ;;. ... ~·· ;:~ -t:. Tel: (714) 347.0008 i~ :;~ w Fax: (714) 347.0088 ~~ -l .- w .. UNITED STATES DISTRICf COURT CENTRAL DISTRICI OF CAUFORNIA Jae Moon CHUNG, ) AeRaKANG, ) Hae Young CHUNG, ) HaeMin CHUNG, ) Plaintiffs, ) vs. ) SACV12- 1351 AG (JPR.x ) Civil Action No.: ) ) U.S. Citizenship and Immigration Services, ) ("USCIS"); ) Janet NAPOLITANO, Secretary, ) U.S. Department of Homeland Security ) (DHS"); ) Alejandro MAYORKAS, Director, ) U.S. Citil;enship and Immigration ) Services ("USCIS"); ) Rosemary L. MELVILLE, Director, ) USCIS California Service Center; ) md, ) Perry RHEW, Chief~ Administrative ) Appeals Office, USCIS; ) Defundan~. ) COMPLAINT FOR DECLARATORY AND INJUNCTIVE RELIEF Chung I!!Jt at ~;dJSCJS et al, Complaint Page 1
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 2 of 25 Page ID #:4 Plaintiffs JAE MOON CHUNG and AE RA KANG, individually and on behalf of their minor children, HAE YOUNG CHUNG and HAEMIN CHUNG, by and through undersignedcounsel, bring this Complaint for Declaratory Judgment and Injunctive Relief against the abovementioned defendants, and allege as follows: INTRODUCTION I. This is a civil action brought by an immigrant investor and his family to challenge the decisionof the United States Citizenship and Immigration Services ("USCIS") to deny them lawfulpermanent residency in the United States.2. After granting Mr. Jae Moon CHUNG and his family members conditional permanentresidency in the United States based upon an investment of one-half million dollars in a USCIS-designated regional center in South Dakota, USCIS erroneously and arbitrarily denied theremoval of the CHUNG/KANG familys conditional resident status and deprived them oflawfulpermanent residency.3. As a result, after many years of lawful presence, the family now faces the potential initiationof proceedings to deport and remove them from the United States as well as the loss of theenormous financial and emotional resources the family has invested in establishing their home inthe United States.4. This lawsuit requests that this Court reverse the refusal by USCIS to remove the conditionfrom the CHUNGIKANG familys resident status and grant the family lawful permanent residentstatus. Chung eta/. v. USC/Set a/., Complaint Page 2
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 3 of 25 Page ID #:5 JURISDICTION5. This action arises under Sections 201, 203(b)(5), 216A, and 245 of the Immigration andNationality Act of 1952 (hereinafter "INA"), 8 U.S.C. §§1151, 1153(b)(5), 1186b, and 1255.This Court has jurisdiction over this action pursuant to 28 U.S.C. §1331 (federal questionjurisdiction), the Administrative Procedure Act, 5 U.S.C. 701, et seq., and the Mandamus Act, 28U.S.C. §1361. Plaintiffs seek relief pursuant to the Declaratory Judgment Act, 28 U.S.C. §2201,et seq and the Equal Access to Justice Act, 5 U.S.C. Section 504,28 U.S.C. Section 2412. VENUE6. Venue properly lies in the Central District of California pursuant to 28 U.S.C. §1391(e)(3)because the plaintiff resides in Irvine, California, which is within the jurisdiction of District andthere is no real property involved in the action.7. Venue also lies in the Central District of California pursuant to 28 U.S.C. §1391(e)(1) becausethis action is against officers and employees of the United States acting in their officialcapacities, and is being brought where Defendant Melville performs her principal official dutiesand responsibilities, and maintains her office: Laguna Nigel, California. PARTIES TO THE ACTION8. Plaintiff, Jae Moon Chung ("Mr. Chung") is a citizen and national ofKorea. On July 14,2006he and his family were lawfully admitted to the United States as conditional permanent residentsbased on an 1-526 petition approved on October 27, 2005 by USCIS. Mr. Chung used lawfullyearned and acquired assets to invest $500,000 pursuant to the EB-5, Investor Pilot Program.9. Based on this investment Mr. Chung, his wife, Ae Ra Kang, and their two minor children, HaeYoung Chung and Hae Min Chung were granted conditional permanent residence status. Chung eta/. v. USC/Set a/., Complaint Page 3
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 4 of 25 Page ID #:6 10. Mr. Chung filed a timely and complete 1-829 petition on June 2, 2008, which was improperlydenied by USCIS on April14, 2011,2011. Based on this denial, Mr. Chung and his family facespotential deportation from the United States. Mr. Chungs, wife, Ae Ra Kang, and their twominor children, Hae Young Chung and Hae Min Chung are also Plaintiffs in this case as theirU.S. immigration status derives from that of Mr. Chung.11. Defendant Janet NAPOLITANO is Secretary of the Department of Homeland Security("DHS"). She is sued in her official capacity. As Secretary of DHS, she has ultimateresponsibility for the administration and enforcement of the immigration laws pursuant to 8U.S.C. § 1103(a).12. Respondent U.S. Citizenship and Immigration Services, "USCIS," is the sub-agency of theDepartment of Homeland Security, responsible for the adjudication of immigration andnaturalization applications or petitions, including the Plaintiffs 1-829, Petition by Entrepreneurto Remove Conditions, subject of the Plaintiffs suit.13. Respondent Alejandro MAYORKAS is sued in his official capacity as the Director ofUSCIS, an agency within DHS. As the Director of USCIS, Mr. Mayorkas is responsible for theoverall administration of USCIS and implementation of the immigration laws of the UnitedStates.14. Defendant Rosemary L. MEL VILLE is sued in her official capacity as the Director of theUSCIS California Service Center. As Director of the USCIS California Service Center, Ms.Melville is responsible for the overall administration of the California Service Center and istherefore responsible for the adverse decisions made on the petition at issue in the instant case.15. Defendant Perry RHEW, is sued in his official capacity as the Chief of the AdministrativeAppeals Office located in Washington, DC. Mr. Rhew is the chief of the Administrative Appeals Chung eta/. v. USC/Set at., Complaint Page 4
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 5 of 25 Page ID #:7 Office and is therefore is responsible for affirming the adverse decisions made on the petition at issue in the instant case. EXHAUSTION OF ADMINISTRATIVE REMEDIES 16. There are no administrative remedies available for Plaintiffs to exhaust. There is no administrative appeal of the denial of an 1-829 petition. 8 CFR § 216.6(d)(2). 17. Even if there were administrative remedies available to Plaintiffs, exhaustion is not requiredin cases governed by the Administrative Procedures Act where the agencys decision is final andexhaustion is not expressly required by statute. 1, 2 18. Plaintiffs may renew the 1-829 petition in removal proceedings before the EOIR, but, DHShas not initiated removal proceedings against Plaintiffs though about one year has passed sincethe denial ofthe Plaintiffs 1-829 petition.19. As only DHS has the legal ability to initiate removal proceedings, the issue ofthe Plaintiffsimmigration status could remain unresolved for an indefinite period of time.20. Further, the Immigration Judge and EOIR do not have jurisdiction over the violations of theAdministrative Procedures Act and the Constitution as outlined in this complaint.1 See Administrative Procedures Act Section IO(c), 5 U.S.C. Section 704: Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action. Except as otherwise expressly required by statute, agency action otherwise final is final for the purposes of this Section whether or not there has been presented or determined an application for a declaratory order, for any form of reconsideration, or, unless the agency otherwise requires by rule and provides that the action meanwhile is inoperative, for an appeal to superior agency authority.See also Darby v. Cisneros, 509 U.S. 137 (1993).2 Although not required of the Plaintiffs, on May 16, 2011(Exhibit L - Plaintiffs 5/16/11Motion to Reconsider) the Plaintiffs submitted a motion to reconsider which the AAO ultimatelydenied. Exhibit M- AAOs 3/19/12 Decision Dismissing Motion. Chung eta/. v. USC/Set a/., Complaint Page 5
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 6 of 25 Page ID #:8 21. For this reason, renewal of the I-829 in removal proceedings before the EOIR is not a mandatory exhaustion requirement. STATUTORY BACKGROUND ON THE IMMIGRANT INVESTOR PROGRAM22. In 1990 Congress enacted Section 203(b)( 5) of the Immigration and Nationality Act ("INA"),8 U.S.C. §1153(b)(5). This provision created a new preference allocation ofvisas ("EB-5 visas")for immigrants who have invested or are in the process of investing a designated amount oflawfully obtained capital in commercial enterprises, and can demonstrate that the investment willcreate or preserve, ten or more jobs for qualified U.S. workers, defined as citizens, lawfulpermanent residents, lawful temporary residents, asylees, and refugees. Under this "ImmigrantInvestor Law," foreign national investors may obtain lawful permanent residence ("LPR status")in the United States for themselves and their dependents.23. The law is intended to attract foreign capital, encourage economic development, especially ineconomically depressed or rural areas in the United States, and promote job creation or jobretention thus directly benefiting the United States economy and labor market.24. The law made 10,000 immigrant visas available each year for qualified foreign nationals whocreate or preserve at least ten full time jobs by investing in a commercial enterprise. In mostcases, to qualify, the foreign national must invest or be actively in the process of investing onemillion dollars. When the investment is made in a rural area, however, as it was in this case, orin a "targeted employment area" the required investment is one-half million dollars.25. As part of its 1993 Appropriations Act, Congress created a "Pilot Program" within theImmigrant Investor Program. The "Pilot Program" is intended to encourage potential immigrantsto invest in "regional centers," entities organized "for the promotion of economic growth,including increased export sales, improved regional productivity, job creation, and increased Chung eta/. v. USCIS eta/., Complaint Page 6
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 7 of 25 Page ID #:9 domestic capital investment." Section 610, Department of Justice and Related Agencies Appropriations Act, 1993, Pub.L. 102-395, 106 Stat. 1828, 1874 (" 1993 Appropriations Act"). 26. users is empowered to designate public or private entities as "regional centers" based on the above criteria. 8 e.F.R. § 204.6(e). 27. Under the Pilot Program, the original requirement that each individual investment create tenjobs for qualifying employees was expressly relaxed, with investors in a "regional center"instead permitted to put forth in their filings "reasonable methodologies for determining thenumber of jobs created by the pilot program, including such jobs which are estimated to havebeen created indirectly.... " 1993 Appropriations Act, §610(c). Reasonable methodologiesinclude multiplier tables, feasibility studies, and "other economically or statistically validforecasting devices which indicate the likelihood that the business will result in increasedemployment. 8 e.F.R. § 204.6(m)(3)(v). "Indirect jobs are the jobs held by persons who workoutside the newly established commercial enterprise ... There is also a sub-set of indirect jobsthat are calculated using economic models that are known as induced jobs. Induced jobs arethose jobs created when direct and indirect employees go out and spend their increased incomeson consumer goods and services." 328. The Lead Plaintiff invested $500,000 into the Winter Dairy, a pooled investment opportunitycreated with the South Dakota International Business Institute ("SDIBI") I Dairy EconomicDevelopment Region ("DEDR").29. Since April 8, 2004, SDIBI/DEDR has been authorized by USeiS as a regional center of theImmigrant Investor Pilot Program.3 Exllibit A - Memorandum (HQ 70/6.2 AD 09-38) ("Neufeld Memo"), December 11, 2009,Adjudication of EB-5 Regional Center Proposals and Affiliated Form 1-526 and Form 1-829Petitions; Adjudicators Field Manual (AFM) Update to Chapters 22.4 and 25.2 (AD09-38), pg. 3 Chung eta/. v. USC/Set a/., Complaint Page 7
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 8 of 25 Page ID #:10 30. The job creation methodology approved by USCIS for application to SDIBI/DEDRs Winter Dairy project utilizes a RIMS II 4 economic multiplier from the Bureau of Economic Analysis of 5 the U.S. Department of Commerce. 31. The approved economic multiplier is 2.66. This means that for every direct job 6 created by the project, an additional 1.6 indirect jobs are created.4 RIMS II (Regional Input-Output Modeling System) is used by the Bureau of EconomicAnalysis for impact analyses. Regional Multipliers Handbook,http://www.bea.gov/scb/pdf/regional/perinc/methlrims2.pdf(last accessed 8/12/2012).5 The BEA [Bureau of Economic Analysis] BEA is one of the worlds leading statisticalagencies. The BEA produces economic accounts statistics that enable government and businessdecision-makers, researchers, and the American public to follow and understand the performanceof the Nations economy. To do this, BEA collects source data, conducts research and analysis,develops and implements estimation methodologies, and disseminates statistics to the public.6 "Direct jobs are those jobs that establish an employer-employee relationship between the newlyestablished commercial enterprise and the persons that they employ." Neufeld Menw, page 2. Id.at Exhibit A. Chung eta/. v. USCIS eta/., Complaint PageS
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 9 of 25 Page ID #:11 THE EB-5 PETITION PROCESS 32. To obtain an EB-5 immigrant visa or lawful permanent resident status under the Immigrant Investor Law, a foreign national must first file an 1-526 petition with the USCIS Service Center having jurisdiction. USCIS has consolidated jurisdiction for all EB-5 adjudications at itsCalifornia Service Center located within this District.33. Under the Pilot Program, the 1-526 petition must contain evidence to prove that the foreignnational has invested, or is actively in the process of investing, at least one-half million dollarsthrough a USCIS-authorized regional center, and that the investment will, directly or indirectly,create at least ten full time jobs.34. The evidentiary standard which the USCIS reqmres petitioners to meet is one of"preponderance of evidence," 7 which means that the matter asserted is more likely than not to betrue. This evidentiary standard has recently been reaffirmed by the current USCIS Director 8Alejandro Mayorkas.35. The USCIS California Service Center adjudicates the 1-526 petition pursuant to regulatorycriteria set forth in 8 C.F.R. § 204.6. Ifthe petition and its supporting documents meet all of therequirements by a preponderance of evidence, a notice of approval is sent to the foreign nationalinvestor. The foreign national and his or her spouse and minor children can then obtain EB-5immigrant visas and be admitted to the United States as conditional permanent residents for twoyears.7 Exhibit B- See Memorandum (HQOPRD 70/2), February 16, 2005, stating on page 3, "Thestandard to be met by the petitioner or applicant is "preponderance of the evidence. Filings arenot required to demonstrate eligibility beyond a reasonable doubt."8 Exhibit C - A Work in Progress: Towards New Draft Policy Memorandum Guiding EB-5Adjudications (PM-602-XXXX:), November 9, 2011. Chung eta/. v. USC/Set a/., Complaint Page 9
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 10 of 25 Page ID #:12 36. Within ninety days of the two year anniversary of admission to the United States as a conditional permanent resident, the immigrant investor must file an I-829, Petition by Entrepreneur to Remove Conditions. This petition is filed with the USCIS California Service Center. 37. The petition must, among other things contain evidence that the foreign nationals investment "created or can be expected to create within a reasonable period of time ten full-time jobs to qualifying employees." (Emphasis added.) 8 CFR 216.6(c)(l)(iv). If the investment is in aregional center then the jobs can be either direct or indirect results of the investment. Evidencecan include "payroll records, relevant tax documents, and Forms 1-9." Id.38. USCIS is required by statute and by its own regulations to adjudicate the I-829 petitionwithin ninety (90) days of receipt. Section 216A(c)(3)(A)(ii) of the INA, 8 U.S.C. §1186b(c)(3)(A)(ii) and 8 C.F.R. § 216.6(c)(l). Again, the burden of proof is preponderance of 9evidence.39. Section 216A(c)(3)(B) states that if the I-829 petition is approved, the condition is removedand the investor and his family remain lawful permanent residents of the United States. Section216A(c)(3)(C) and (D) states that ifthe petition is denied, lawful permanent resident status willbe terminated and the alien may request review of such determination in a proceeding to removethe alien with the burden being on the Attorney General to establish, by a preponderance of theevidence, that the facts and information described in subsection (d)(l) and alleged in the petitionare not true with respect to the qualifying commercial enterprise.9 See Exhibit B- Memorandum (HQOPRD 70/2), February 16, 2005. Chung eta/. v. USC/Set a/., Complaint Page 10
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 11 of 25 Page ID #:13 10 40. On November 2, 2002, PL 107-273 was enacted and amended the statute so that the immigrant investor whose petition is denied remains a conditional resident until such time that anon-appealable, final order is issued by the Board of Immigration Appeals at the conclusion ofremoval proceedings.4l.On December 21,2006, the USCIS published an Interoffice Memorandum (HQPRD70/23.12)by Michael Aytes Re: Delegation of Authority to Service Center Directors to Adjudicate Form 1-829, Petition by Entrepreneur to Remove Conditions, in which the USCIS re-affirmed its policythat states: If the Form I-829 is still pending or has been denied but no final order of removal has been entered ... [d]ocumentation of conditional resident status must be issued until a final order of removal is issued. 11 , 12 FACTUAL BACKGROUND42. Mr. Chungs 1-526 petition was submitted to the USCIS on August 8, 2005. It contained aU.S. EB-5 Immigrant Investment Pilot Program Escrow Agreement with Hana Bank WorldCenter Branch in Seoul, Korea (hereinafter "Hana Bank") as proof that Mr. Chung set up anescrow account on July 25, 2005 for the sole purpose of securing the investment funds fortransfer to Winter Dairy.10 Twenty-First Century department of Justice Appropriations Authorization Act.11 See Exhibit D- Memorandum by William Yates on January 18,2005, Re: Extension of Statusfor Conditional Residents with Pending or Denied Form 1-829 Petitions Subject to Public Law107-273, at page 2 (" ...USCIS must continue to document the conditional resident status ofeligible aliens with pending or denied Form I-829s until the conditional status has been removedor a final order of removal has been issued ... ").12 And Exhibit E- EB-5 Field Memorandum Number 9: Form I-829 Processing by Michael A.Pearson on March 3, 2000 Re: AFM Update: Immigrant Investor Petitions - Form 1-829Adjudication, at page 13. Chung eta/. v. USC/Set a/., Complaint Page 11
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 12 of 25 Page ID #:14r 43. Mr. Chungs 1-526 was approved by the USCrS on October 27, 2005 based on Mr. Chungs proposed one-half million dollar investment in the Winter Dairy, a Pilot Program pooled investment opportunity offered by SDrBr/DEDR, a users designated regional center. 44. The construction of the Winter Dairy began in December of 2005 and was completed in December of 2006. 45. Mr. Chung and his family were admitted to the United States in conditional permanent resident status on July 14,2006. 46. Mr. Chungs $500,000 investment was made fully available to Winters Dairy on August 25, 2006. 4 7. Winter Dairy commenced operations and, in good faith, complied with the condition that it create the requisite number of jobs for qualified U.S. workers. 48. Specifically, Winter Dairy through its managers, faithfully complied with the employment eligibility verification requirements explicitly set forth in Section 274A of the INA, 8 U.S.C. Section 1324a. Pursuant to Section 274A of the INA and implementing regulations and guidelines, the Winter Dairy managers required all prospective employees to affirm and provide documentary proof of their authorization to work in the United States in full compliance with the statute and regulations governing the r-9 employee identification and employment authorization verification process. 49. The vast majority of these employees, in compliance with the r-9 process, affirmed that they were lawful permanent residents of the United States, and provided their facially valid Alien 13 Registration Receipt Cards ("green cards") as proof. 13 It should be noted that the users has never alleged that the lawful permanent resident cards were not facially valid or that the Petitioners acted in bad faith in regards to the acceptance of the lawful permanent resident cards. Chung eta/. v. USC/Set a/., Complaint Page 12
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 13 of 25 Page ID #:15 50. Winter Dairy, through its managers, was also cognizant of its duty not to discriminate in employment by engaging in explicitly prohibited conduct, pursuant to the anti-discrimination provisions specified within Section 274B of the INA (8 U.S.C. Section 1324b), such asdemanding additional or alternative proof of lawful U.S .immigration status. 14 51. INA Section 274B prohibits citizenship or immigration status discrimination with respect tohiring, firing and recruitment or referral for a fee, by employers with four or more employees.Employers may not treat individuals differently because they are, or are not, U.S. citizens. U.S.citizens and nationals, recent permanent residents, asylees, and refugees are protected fromcitizenship status discrimination.52.All individuals eligible to work m the United States - including citizens, nationals,immigrants, and temporary work visa holders -- are protected from national origindiscrimination.53.1n addition, INA Section 274B prohibits unfair documentary practices related to verifying theemployment eligibility of employees. Employers are prohibited from requesting more ordifferent documents than are required to verify an individuals employment eligibility andidentity. Employers are also prohibited from rejecting reasonably genuine-looking documentsthat appear to relate to the person presenting them, or specify certain documents over others.14 It should be noted that the Department of Justice ("DOJ") does aggressively investigate andpursue these matters as evidenced by two recent DOJ Press Releases, one in where the AssistantAttorney General of the Civil Rights Division states, "Employers may not treat authorizedworkers differently during the employment eligibility verification process based on theircitizenship status. Federal law prohibits discrimination in the employment eligibility verificationprocess, and the Justice Department is committed to enforcing the law." See DOJ Press Release,12-28-2011 entitled, "Justice Department Reaches Settlement with Virginia-Based BAE SystemsShip Repair Inc." (available at: http://www.justice.gov/opa/pr/20 11/December/11-crt-1712.html -last accessed 8/2/12). See also DOJ Press Release, 01-04-2012 entitled, "Justice DepartmentSettles with University of California San Diego Medical Center." (available at:http://www.justice.gov/opa/pr/2012/January/12-crt-006.html -last accessed 8/2/12). Chung eta/. v. USC/Set a/., Complaint Page 13
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 14 of 25 Page ID #:16r 54. All work authorized individuals are protected from unfair document inquiry abuse. 15 55. On June 2, 2008 Mr. Chung timely and properly filed her 1-829 petition with the USCIS California Service Center. 56. Included with the petition were documents evidencing actual direct employment of at least 16 sixteen apparently U.S. workers: 1-9 forms and copies of the proffered identity documents for each employee; W-4 and W-2 forms for each worker employed at the time; the Annual Federal Tax Return for Agricultural Employees for tax year 2007; the Annual Federal Unemployment (FUTA) Tax Return for tax year 2007; and, an organization chart illustrating the structure that also listed the employees and descriptions of their positions. 57. These documents established, by a "preponderance of evidence," that Winter Dairy had created, or could be expected to create within a reasonable period of time, at least sixteen direct, full-time jobs for U.S workers, all of whom appeared to be qualified U.S. workers based on their sworn affirmations and original, facially valid documents submitted in compliance with the instructions for the 1-9 and in compliance with the statute at INA Section 274B. 15 See USCISs Handbook for Employers M274, page 38: 8. Q. What is my responsibility concerning the authenticity of document(s) presented to me? A. You must examine the document(s), and if they reasonably appear on their face to be genuine and to relate to the person presenting them, you must accept them. To do otherwise could be an unfair immigration-related employment practice. If the document(s) do not reasonably appear on their face to be genuine or to relate to the person presenting them, you must not accept them. available at: http://www.uscis.gov/files/form/m-274.pdf (last accessed 8/2/12). 16 Using the RIMSII multiplier of 2.66, sixteen direct jobs equates to 42.56 direct and indirect jobs. Because there were four immigrant investors in the Winter Dairy, 10.64 direct and indirect jobs are attributable to each investor. Chung eta/. v. USCIS eta/., Complaint Page 14
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 15 of 25 Page ID #:17 58. In violation of the INA and its own regulations, USCIS failed to adjudicate Mr. Chungs I-829 17 petition within ninety days. Instead, the petition languished at the California Service Center ("CSC") for well over eight months when the first request for evidence was issued. 18 59. On February 20, 2009, the CSC issued a Request for Evidence ("RFE"). 60.The RFE requested evidence that the petitioner had invested the requisite amount of capitaland that the investment will create full-time employment for not fewer than 10 qualified workers. In addition, the RFE requested copies of the Quarterly Wage Reports for all employees for thefour quarters immediately preceding the filing date of the I-829 petition, and, evidence of thecurrent immigration status of all workers.61. Most ofthis evidence had already been provided with the initial I-829 submission.62. Plaintiff timely responded to the RFE providing additional proof of job creation, which bythat point included an additional three full time employees, bringing the total to nineteen.63. Specifically, plaintiff provided: I-9 forms and copies ofthe proffered identity documents foreach worker employed at the time of the submission of the response to the RFE; I-9 forms andcopies of the proffered identity and employment authorization documents for each workeremployed in 2007; W-2 forms for tax years 2008 and 2007; Quarterly Wage Reports for all fourquarters of tax year 2008.64. In October 2009, the First National Bank of Sioux Falls foreclosed on the Winter Dairy.65. Pleasant Dutch Dairy, LLC purchased the Winter Dairy assets from First National Bank inJanuary 2010.17 INA Section 216A(c)(3)(A), 8 U.S.C. Section 1186b(c)(3)(A)18 Exhibit F- USCIS CSC 2/20/09 Request for Evidence. Chung eta/. v. USC/Set a!., Complaint Page 15
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 16 of 25 Page ID #:18r 66. Over one year and three months after Plaintiffs timely RFE response, on August 11, 2010, 19 USCIS issued a Notice oflntent to Deny ("NOID") Mr. Chungs I-829 petition. 67. At no time prior to August 11, 2010 was Plaintiff or anyone else associated with the Winter 20 Dairy put on notice of the issue of unauthorized workers. 68. The USCIS put into effect a heightened evidentiary standard more aligned with the "clear and convincing" standard than with the "preponderance of evidence" standard called for in the statute. In fact, the NOID states the following: "The beneficiary is not clearly eligible for the benefit sought." (Emphasis added.) Furthermore, the USCIS checked data systems that Plaintiff and the employer were not required by law to check and, moreover, that were not available to the Plaintiff or the employer. The actions of the USCIS went far beyond any investigation an employer would be lawfully permitted to perform. 69. Once again, Mr. Chung filed a timely response. 70. The director of the California Service Center denied the petition on December 6, 2010 and 21 certified her decision to the AAO. The denial was based on CSCs determination from checking its internal Government data bases, that "the majority of employees hired by Winter Dairy... are not authorized to work in the United States." 71. The denial was not due to the fact that the Plaintiff did not or could not have been expected to create the requisite number of jobs during the two year period. Rather, the petition was denied because, after years of unwarranted investigation and delay, USCIS determined that the individuals hired to fill the jobs misrepresented themselves as qualified U.S. workers using 19 Exhibit G- USCIS 8/11/10 NOID. 20 On May 13, 2010 the Petitioners filed in this Honorable Court an action (Chung et a/. v. Napolitano et a/., Case No. CV10-03584) seeking USCIS adjudication of the pending 1-829 ~etition. Upon USCIS issuing its August 11, 2010 NOID the Petitioners withdrew the suit. 1 Exllibit H- USCIS 12/6/10 Denial ofl-829 and Certification to AAO. Chung eta/. v. USC/Set a/., Complaint Page 16
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 17 of 25 Page ID #:19 facially legitimate documents, which under Section 274B of the INA the employer was required to accept as proof of that status. This determination was based exclusively on an allegedly exhaustive check of internal Government Data Bases that are inaccessible to the general public including the plaintiff. 72. Mr. Chung submitted a brief and additional evidence in response to the notice ofcertification.73. On February 17, 2011, the AAO advised Mr. Chung of derogatory evidence and found 22therein that the Plaintiff had made fraudulent and material misrepresentations.74.The AAOs February 17, 2011 correspondence further allowed the Petitioner the opportunityto "overcome" the AAOs finding of fraud and misrepresentation. !d.75. On March 3, 2011 Mr. Chung responded to the AAOs notice with a statement and additional 23evidence.76. On April14, 2011 the AAO affirmed the directors decision in part and withdrew a portion inpar.t, denying Mr. Chungs petition. 2477. The AAO affirmed the directors decision finding that Mr. Chung had not met the jobcreation requirement of the EB-5 program, as well as making an independent formal finding ofmisrepresentation by Mr. Chung. !d.78. The AAO did withdraw the directors concerns regarding the use of multipliers that weredisclosed during the approved Form I-526 petition.79. On May 16, 2011 the Plaintiff filed a timely motion to reconsider the AAOs April14, 2011 25decision.22 Exhibit I- AAOs 2/17/11 Notice of Fraud Determination.23 Exhibit J- Plaintiffs 3/3/11 Response to AAOs 2/17/11 Notice of Fraud.24 Exhibit K- AAOs 4/14111 Decision on Certification. Chung eta/. v. USC/S eta/., Complaint Page 17
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 18 of 25 Page ID #:20.· 80. The California Service Center transferred the motion to the AAO for adjudication to which 26 the AAO dismissed the motion on March 19, 2012. The AAO dismissed the motion pursuant 27 to 8 C.F.R. 103.5(a)(4) for not meeting the applicable requirements for such a motion. /d. CAUSES OF ACTION Count 1: Arbitrary and Capricious Action in Violation of the INA and the Administrative Procedures Act 81. Plaintiffs incorporate paragraphs 1 through 74 as if fully stated in this Count. 82. Defendants practices, policies, interpretations of law, and conduct violate the INA and the Administrative Procedures Act ("APA") and should be set aside pursuant to 5 U.S.C. §706(2)(A) as arbitrary, capricious and otherwise not in accordance with law and pursuant to 5 U.S.C. §706(2)(D) as without observance of procedure as required by law. 83. Defendants denial of Plaintiffs for I-829 violates the APA and the INA because, contrary to the ninety day adjudication period mandated by Section 216A(c)(3)(A)(ii) of the INA, and Defendant USCIS own regulations, Defendants took almost three years to render a decision. 84. The lengthy, unexplained, unreasonable, and unjustified delay in adjudicating Plaintiffs 1- 829 petition illegally deprived Plaintiff of the opportunity to remedy, or even know about the deficiency upon which Defendant denied the petition. 85. Moreover, it is indisputable that more than the requisite numbers of new direct and indirect full time jobs were created by Plaintiffs investment. These were real jobs which were, in good faith, made available to qualified U.S. workers as required by law. Had Defendant, USCIS, followed the law and timely adjudicated Plaintiffs petition, Plaintiff would clearly have met the 25 Exhibit L- Plaintiffs 5/16/11 Motion to Reconsider. 26 Exhibit M- AAOs 3/19/12 Decision Dismissing Motion. 27 The denial of the Plaintiffs motion to reconsider is not being challenged in this suit. Chung eta/. v. USC/Set a/., Complaint Page 18
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 19 of 25 Page ID #:21.- requirement that the foreign nationals investment "created or can be expected to create within a reasonable period of time ten full-time jobs to qualifying employees." (Emphasis added.) 8 CFR 216.6(c)(1 )(iv). 86. The USCIS acted in an arbitrary and capricious manner in adjudicating Plaintiffs petition under a heightened standard above and beyond the correct "preponderance of evidence" standard contrary to their own regulations and guidance. See Aytes Memo, supra, as well as Gonzalez v. Reno, 212 F.3d 1338 at 1349 (lith Cir 2000); Morton v. Ruiz, 415 U.S. 199, 94 S. Ct. 1055 at 1074; see also Hall v. Schweiker, 660 F.2d 116, 119 (5th Cir. 1981) ("Agencies must respect their own procedural rules and regulations."). 87. The US CIS and the AAO acted in an arbitrary and capricious manner in making a find of material misrepresentation by Mr. Chung, as this charge is baseless and entirely without merit. Count II: Exceeding Statutory Authority 88. Plaintiffs incorporate paragraphs I through 74 as if fully stated in this Count. 89. The USCIS exceeded its statutory jurisdiction, authority and limitations in violation of Section 706(2)(C) of the APA by requiring, as a pre-condition to approval, actions of Plaintiff which would have violated INA Sections 274A and 274B in order to be deemed in compliance with 8 C.F.R. § 216.6(c)(1)(iv). 90. The USCIS exceeded its statutory authority by adjudicating the Plaintiffs petition under heightened standard above and beyond the correct "preponderance of evidence" standard contrary to their own regulations and guidance. 91. The USCISs position, that the requirements of INA 203(b)(5)(A)(ii) and 8 C.F.R. 204.6(e) are rightfully enforced by requiring a heightened standard above and beyond the correct "preponderance of evidence" standard of verifiable proof through Federal government internal Chung et at. v. USC/Set a/., Complaint Page 19
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 20 of 25 Page ID #:22: records not available to the investors or any other member of the public, in a manner that would subject the investors to liability under 274A and 274B, is ultra vires. 28 Count Ill: Violation of Due Process 92. Plaintiffs incorporate paragraphs 1 through 74 as if fully stated in this Count. 93. The USCIS adjudication was contrary to the due process clause of the 5th Amendment of the United States Constitution by failing to provide Mr. Chung an opportunity to be heard in a meaningful time and in a meaningful manner in violation of Section 706(2)(B) of the APA. 94. The USCIS adjudication was contrary to the due process clause of the 5th Amendment of the United States Constitution by adjudicating Plaintiffs petition under a heightened standard above and beyond the correct "preponderance of evidence" standard contrary to their own regulations and guidance. 95. The USCIS imposition of a heightened standard above and beyond the correct "preponderance of evidence" standard of proof, its unwarranted reliance on information contained in non-public Government databases, and the lengthy adjudicatory delays combined to deny the Plaintiff due process. ATTORNEYS FEES 96. As a result of the Defendants unlawful actions, Plaintiffs were required to hire counsel and pay counsel reasonable fees and expenses. Because Det(mdants were not substantially justified in pursuing this action, Plaintiffs are entitled to recover legal fees and all costs and expenses under the Equal Access to Justice Act, 5 U.S.C. § 504 and 28 U.S.C.§ 2412. 28 The anti-discrimination provision of 274B had been on the books for several years when the Immigrant Investor Program was created by IMMACT90. Notably Congress did not waive Section 274B prohibitions for immigrant investors. Chung et at. v. USC/Set a/., Complaint Page 20
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 21 of 25 Page ID #:23 RELIEF REQUESTED WHEREFORE, Plaintiffs respectfully request this Court enter judgment on their behalfand issue the following: a. an order declaring the Defendants denial of Plaintiffs I-829 application to beviolative of the INA and its attendant regulations; violative of the Administrative ProceduresAct, ultra vires; arbitrary and capricious and not otherwise in accordance with law; b. an order declaring that Plaintiffs capital investment in the Winter Dairy satisfiesthe investment and employment requirements of INA § 216A, 8 U.S.C. § 1186b, and theimplementing regulations; c. an order directing Defendants and their agents to promptly approve PlaintiffsForm I-829 petition to remove the condition from his lawful permanent residence and that of herspouse and children; d. an order directing Defendants and their agents to immediately issue all necessaryand appropriate documentation to Plaintiffs evidencing permanent resident status in the UnitedStates; e. an order directing Defendants and their agents not to consider the Plaintiffspresence in the United States as unlawful during the period of time between the denial of Form 1-829 and the disposition of this litigation; f. an order enjoining the Defendants from placing the Plaintiffs m removalproceedings pending a final determination in this case; g. an order enjoining the Defendants from taking any action to deport, remove ordeem inadmissible any of the Plaintiffs from the United States pending a final determination inthis case; Chung eta/. v. USC/Set a/., Complaint Page 21
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 22 of 25 Page ID #:24: h. an order enjoining the Defendants from taking any action to deprive the Plaintiffs of their right to be employed in the United States during the pendency of this case; 1. a mandatory injunction requiring the approval of Plaintiffs I-829 applications; J. an order awarding Plaintiffs their attorneys fees and costs; and k. an order granting such other relief as the Court may deem just, equitable and proper. Dated: 1. . J!Z, Respectfully submitted, By: Jb"Z" SUKIKIM California Bar #: 242573 Counsel for Plaintiffs Hanul Professional Law Corporation 2677 N. Main St. Suite 1070 Santa Ana, CA 92705 Tel: (714) 347-0008 Fax: (714) 347-0088 www .iminlawfirm.com Chung eta/. v. USC/Set at., Complaint Page 22
    • Case 8:12-cv-01351-AG-MLG Document 1 Filed 08/21/12 Page 23 of 25 Page ID #:25 Chung et al. v. USCIS et al. EXHIBIT INDEX Exhibit A - Memorandum (HQ 70/6.2 AD 09-38) ("Neufeld Memo"), December 11, 2009, Adjudication of EB-5 Regional Center Proposals and Affiliated Form 1-526 and Form 1-829 Petitions; Adjudicators Field Manual (AFM) Update to Chapters 22.4 and 25.2 (AD09-38), pg. 3 Exhibit B - See Memorandum (HQOPRD 70/2), February 16, 2005, stating on page 3, "The standard to be met by the petitioner or applicant is "preponderance of the evidence. Filings are not required to demonstrate eligibility beyond a reasonable doubt." Exhibit C- USC1S, A Work in Progress: Towards New Draft Policy Memorandum Guiding EB- 5 Adjudications November 9, 2011 (PM-602-XXXX) Exhibit D- Memorandum by William Yates on January 18, 2005, Re: Extension of Status for Conditional Residents with Pending or Denied Form I-829 Petitions Subject to Public Law 107- 273, at page 2. Exhibit E- EB-5 Field Memorandum Number 9: Form I-829 Processing by Michael A. Pearson on March 3, 2000 Re: AFM Update: Immigrant Investor Petitions- Form I-829 Adjudication, at page 13.Exhibit F- USCIS CSC 2/20/09 Request for EvidenceExhibit G-US CIS 8111110 NOIDExhibit H- USCIS 12/6110 Denial ofl-829 and Certification to AAOExhibit I- AAOs 2117111 Notice of Fraud DeterminationExhibit J- Plaintiffs 3/3/11 Response to AAOs 2/17111 Notice of FraudExhibit K- AAOs 4/14111 Decision on CertificationExhibit L- Plaintiffs 5/16111 Motion to ReconsiderExhibit M- AAOs 3119112 Decision Dismissing Motion