The Evolution of EB-5 with Former USCIS EB-5 Program Manager Morrie Berez – Episode 78

EB-5 History and Implementation with Maurice (Morrie) Berez

The Evolution of EB-5 with Former USCIS EB-5 Program Manager Morrie Berez – Episode 78

Curious how the EB-5 program has grown and evolved over time? Today, Mona and Mark are joined by former USCIS EB-5 Program Manager Morrie Berez to discuss the evolution of EB-5. Morrie describes the modest early days of the program, explaining why it was suspended for a time and how its regulations were established. Listen in for Morrie’s insight around USCIS Policy Memorandums, business development, and the issue of redeployment.



How did the EB-5 industry grow to generate up to $1B in immigrant investment capital and create thousands of jobs for US workers every year? What did the program look like when it began in 1990 and how has it evolved over time? What insight and advice can a former head of EB-5 offer those of us who are navigating the program today?


During Maurice (Morrie) Berez’s distinguished 35-year career in government, he spent seven years as the USCIS Headquarters EB-5 Program Manager and Chief Adjudications Officer. Under Morrie’s leadership, the program went from small and struggling to a thriving engine for foreign capital flow. Today, he joins Mona and Mark to discuss the evolution of the program, explaining how Regional Centers facilitated the growth of EB-5, how E-2 informed its regulations, and how he addressed the fraud that had temporarily shut the program down.


Morrie offers insight into the process behind Policy Memorandums, sharing how some are born of stakeholder concerns while others stem from an obvious need to clarify regulations. Listen in for Morrie’s advice on the best way to handle the issue of redeployment and learn how to educate adjudicators around the industry standards that impact your business!

The Early Days of EB-5

  • The EB-5 program was created by the Immigration Act of 1990 but remained quite small until 1993 when Congress added the Regional Center pilot program. Regional Centers are credited with making indirect jobs possible and allowing the new commercial enterprise (NCE) and the job creating enterprise (JCE) to be two separate entities.


  • The pilot program allowed EB-5 to grow, and by 1998, it supported 65 Regional Centers and up to 2,000 investors per year. This translated to anywhere from 3,000 to 5,000 visas per annum, and retrogression was not an issue because visas could be shared.


The Suspension of EB-5

  • Regrettably, fraud was a contributing factor to the growth of the program. The State Department discovered that some investors were asked to contribute as little as $50K at the I-526 stage and issued a five-year note with small payments due on an incremental basis. In the fifth year, the unconditional card was approved and the loan forgiven.


  • When the scam was uncovered, the EB-5 program was suspended. To address the fraud, Morrie and his team established the I-924 (requiring that Regional Centers explain how they plan to make a positive economic impact in a specified geographic location) as well as the annual review.


  • When the program restarted in 1998, the 65 Regional Centers were asked to recertify under the new guidelines and given 45 days to respond. 60 of the Regional Centers were terminated and 5 remained.


How E-2 Informed EB-5

  • In the early days of E-2, there was no job requirement and no capital threshold. The program required a substantial investment, and the foreign investor had to own at least 50% of the business. When EB-5 was created, the E-2 served as the foundation for the EB-5 regulations.


  • E-2 and EB-5 standalones are active entrepreneurial ventures, while the majority of EB-5 projects today are pooled, passive investments. Initially, EB-5 investors had to demonstrate that they were either involved at a policy level or participated in the day-to-day operations of the business. Now, as long as the passive investor is in compliance with the Limited Partnerships Act of 1990, they are considered to be “actively involved.”


USCIS Policy Memorandums

  • Some memorandums issued by USCIS stem from realizing, in the course of doing business, that a regulation is unclear. For instance, an operational memorandum was issued to clarify what constitutes capital and further explain the definition provided in the regulations.


  • Other memorandums stem from stakeholder concerns. When USCIS determined the four precedent decisions, they retroactively applied those decisions to 2,000 applications at the I-829 stage. But when the Chang lawsuit determined that those cases had to be addressed without applying the precedent decisions, USCIS produced operational guidance to assist adjudicators in resolving those cases.


Educating Adjudicators

  • In your business plan, devote a section to educating adjudicators around the exact nature of your business. Morrie encourages you to clearly explain how industry standards apply to this particular job-creating enterprise.


  • In auto parts manufacturing, for example, it is commonplace to suspend operations for as long as two months. State such industry standards (and how they might impact your project) explicitly in your business plan.


Morrie’s Advice on Redeployment

  • Though the issue of redeployment remains ambiguous, Morrie contends that you’re okay as long as you stay within the strictures of what you were approved to do as a Regional Center. If you do construction loans for hotels, for example, redeploy the money on another construction loan for a hotel.


  • Morrie cautions, however, that you cannot just create a redeployment that isn’t allowed under the terms of the investment. Be proactive and make the redeployment a part of the offering documents and operating agreement up front.


  • For example, you might say, “The NCE will make one or more loans…” to establish a lawful provision for redeploying the money at the end of the initial investment period. Thus, when the I-526 is approved, the redeployment is approved as well because it was built into the business plan from the beginning.