Chinese investor to get a review of pending expulsion

Judge questions fairness of changed visa rules

May 09, 2001|By Walter F. Roche Jr. | Walter F. Roche Jr.,SUN STAFF

In a decision offering hope to foreign investors seeking permanent U.S. residency, a federal judge has ordered the U.S. Immigration and Naturalization Service to reconsider the impending expulsion of a Chinese national.

U.S. District Judge George H. King, sitting in Los Angeles, upheld the right of the INS to set tougher standards for the investor visa program in a 23-page decision dated May 3.

The judge also said the INS must consider whether retroactively imposing those new standards on people who had already signed up for the program would create an undue hardship.

Stating that the INS "effectively changed the rules of the game" when it established the new guidelines for the investor visa program in 1998, King wrote that the INS had previously approved the investment program that Yi Yuan Chiang joined in. He was one of 29 people to invest under the auspices of Maryland-based American Immigration Services (AIS).

Created by Congress in 1990, the investor visa program allows foreigners and members of their family to get permanent U.S. residency by investing $500,000 to $1 million in a U.S. business. The INS, reacting to apparent abuses, set new standards for the program through so-called precedent rulings issued in 1998.

The suit charges that INS policies initiated in 1998 made it much more difficult to qualify for the program by limiting the use of loans and barring agreements under which the investor could sell back his share of a business within a few years.

King's order requires the INS to reconsider Chiang's case based on factors including the burden or hardship that the new standards impose on people such as Chiang and the extent to which he relied on the old standards when he joined the program.

The rulings were aimed at barring certain loan arrangements and buyback provisions that, King wrote in his decision, did "not fulfill the purposes of the statute."

Allegations of fraud in the investor visa program have sparked several investigations, one of which led to the indictment of the principals in a rival investor visa firm, Interbank of Herndon, Va. A verdict in that case, against James F. O'Connor and James A. Geisler, is expected this month.

An internal INS investigation looked into allegations that AIS had been granted preferential treatment by top agency officials. That inquiry ended without action against INS officials or the company.

Though the ruling directly applies to the only plaintiff in the case facing immediate expulsion, lawyers familiar with the litigation said it could benefit about 800 other foreign investors who are losing their green cards as a result of new INS guidelines.

Chiang, like the other 800 investors, had cleared the first hurdle in getting a permanent green card and had been issued a conditional card. His application for a permanent card was held up when the INS placed a freeze on investor visa cases while precedent decisions were written.

"It is a ray of hope" for a lot of other people in that category, said Stephen Yale-Loehr, who heads the investors committee for the American Immigration Lawyers Association.

Ira Kurzban, one of the attorneys for the investors who filed the suit in 1999, said the judge's decision was "the first to recognize that the government cannot retroactively impose new standards when to do so creates a real hardship."

He said that as a result of the ruling, he and the other attorneys on the case will seek a review for all 208 foreigners who signed up for the AIS program.

INS officials did not respond yesterday to a request for comment on the court decision.

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