Judges rule INS erred on investor visa rules change

Investors with Md. firm to be spared deportation

April 30, 2003|By Walter F. Roche Jr. | Walter F. Roche Jr.,SUN NATIONAL STAFF

A federal appeals court ruled yesterday that the Immigration and Naturalization Service acted illegally when it retroactively changed the rules for a visa program that allows foreigners to become permanent U.S. residents by investing at least $500,000 in an American business.

The ruling means that about 200 investors in a Maryland-based firm, AIS, will be spared from near-certain deportation. The decision is the latest development in the 12-year history of the controversial investor visa program.

In a 27-page decision written by Judge Betty Fletcher, the three-judge panel in the 9th Circuit Court of Appeals in San Francisco concluded that the U.S. Immigration and Naturalization Service, now part of the Department of Homeland Security, should not have retroactively applied new and tougher rules to applications that already had received preliminary approval.

Calling the INS action in 1998 "an abrupt departure" from past practices, the court stated that the changes were "impermissibly retroactive" and resulted in an undue hardship for investors who expected the government to uphold its end of the bargain.

Ira Kurzban of Miami, one of the attorneys for the AIS investors, called the decision a clear victory.

"We have said all along that these people deserved residency," Kurzban said. "We're delighted."

Officials of the Bureau of Citizenship and Immigration Services, the successor to the INS, could not be reached last night for comment. The decision could be appealed to the full bench of the 9th Circuit.

Another panel in the same circuit issued a conflicting decision in an earlier case upholding the INS actions on the investor visa program, though Kurzban said the cases were not equivalent.

In its decision yesterday, the court concluded that while the INS had the right to correct apparent abuses in the investor visa program, it went too far when it applied the new standards to applications already approved.

Stating that the government had never charged the visa applicants with acting in bad faith, the court said that from the investors' point of view, the INS action "must seem very unfair."

The new, tighter rules were put in place in 1998 after the discovery of apparent abuses in many investor visa programs.

As The Sun reported in a 2000 series, many programs allowed investors to qualify by investing $120,000, instead of the mandated $500,000, in a U.S. business. Little if any of the money ever made it to the struggling businesses that the law under which the visa programs were begun endeavored to aid.

At the time, AIS was represented by former INS Commissioner Gene McNary. An investigation by the inspector general in the U.S. Justice Department concluded that former INS general counsel Paul W. Virtue had given AIS special access to key agency officials in order to win approval for its programs.

Steven Perlman, a New York immigration attorney who sued to force release of that critical report, said last night that the court decision was the result of both sides engaging in a cover-up.

More than 100 foreign investors and their families filed a federal lawsuit two years ago challenging the rule change.

In its decision yesterday, the appeals court panel rejected the contentions of government lawyers that a recent amendment to the investor visa law made the lawsuit moot. The amendment allows investor visa applicants to amend their petitions to meet the tougher standards.

The judges held that requiring the investors to essentially start the process all over again was not a suitable remedy.

"This is not an equivalent substitute for the relief requested from this court," the decision states.

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