The #1 Reason EB-5 Regional Centers are Terminated (and How to Avoid It)

At an industry event, panelists stressed the importance of proactive compliance amid increased scrutiny on annual filings and Regional Center audits.

In the pre-RIA era, EB-5 struggled with a bad reputation due to incidents of lackadaisical bookkeeping, mismanagement of funds, and downright fraud perpetrated by those who’d taken money from well-meaning investors and used it for their own ends. Industry leaders like JTC longed for more stringent requirements that would eliminate this type of behavior.

Congress took these threats to the program seriously, and the EB-5 Reform and Integrity Act of 2022 (RIA) instituted new integrity measures, including annual statements, a third-party fund administration requirement, and periodic audits by U.S. Citizenship and Immigration Services (USCIS).

These changes were meant to clean up an industry that had done a lot of good and simply needed to live up to its potential. However, the legislation didn’t spell out exactly how all of these things were to be implemented, so it took some time for us to learn how the new rules would be enforced. Now that we know, it’s important for industry leaders to help EB-5 stakeholders understand and comply with the biggest issues they face.

Regional Center terminations before and after the RIA

In December 2025, Invest In the USA (IIUSA) hosted a webinar sponsored by JTC. Navigating the EB-5 Compliance Landscape focused on helping Regional Centers understand the requirements for remaining in good standing with USCIS, especially those that, if violated, could lead to Regional Center termination.

“Prior to the RIA, there were two reasons to terminate a Regional Center: one was failure to file the required annual form; the other one was failure to promote economic growth,” said American Lending Center’s Andrew Diroll-Black, a former Acting Division Chief for Division 1 Compliance at the Immigrant Investor Program Office (IPO).

“I personally terminated about 15% of the existing Regional Center population because they had failed to file their 924As,” he said, referring to Form I-924A, the annual form that predated the RIA. Since the RIA’s passage, Regional Centers must now file Form I-956G, Regional Center Annual Statement.

Before the creation of the RIA’s innocent investor protections, a failure to file this form could have major ramifications for the Regional Center and all of its investors, not just those on a particular project.

“There are consequences for all of the projects under the Regional Center if one of the projects doesn’t comply,” said Carel van der Merwe of EB-5 Coast to Coast. A major topic at the webinar was how filing the I-956G form and paying the RIA’s new integrity fees are among the most important steps to avoid penalties.

Annual forms and integrity fees: how to avoid termination under the RIA

According to Diroll-Black, Regional Centers should not underestimate the importance of filing the annual I-956G form.

“The #1 reason Regional Centers get terminated is either failing to file this form or failing to pay their integrity fees,” he said. While we don’t know if terminations will reach the 15% alluded to from the program’s earlier era, it’s clear these forms are being scrutinized.

“Show us where the money has gone,” said van der Merwe on the directive for I-956G filing, with particular focus on “progress on the project and job creation.”

As for the integrity fees, while they do put an additional burden on Regional Centers, the panelists stressed that it’s important to remember that one of the biggest selling points of EB-5 is that the program is entirely paid for through fees, requiring no taxpayer dollars.

“EB-5 is an expensive program to run,” said Diroll-Black. When asked about making integrity fee payments, his advice was blunt: “Pay on time. Pay early.” And if you can, “it doesn’t hurt to get all the documentation you can to prove you made that payment.”

“If the fee isn’t getting paid, terminations are rolling,” said Kyle Walker of Green Card Fund. “That seems to be pretty clear.”

What USCIS auditors are looking for and how fund administration can play a part in successful audit preparation

The RIA required USCIS to audit Regional Centers at least once every five years, but the law didn’t spell out exactly how these audits would work, resulting in a scramble to get as much information as possible once audits finally began. It’s clear the auditors were learning on the job as well, as the amount of information they request at the commencement of an audit has expanded over time.

“They’re giving you about 14 days to respond to that document request,” said Walker, who said the list of items required has gone from 13 in 2024 to as many as 25 items in 2025. “75-80% of the audit was focused on, ‘show me the money; let’s get into specific investors and projects.’”

JTC’s Jill Jones, who participated in a recent client audit as part of the fund administration team, echoed this point.

“They literally wanted to see how the fund administrator communicated with the Regional Center,” said Jones. “They said, ‘show me the email.’”

Diroll-Black made sure to point out that, as some of the panelists experienced, it’s okay to ask for more time to collect information if it’s not on hand on the day of the audit. What’s not okay is to refuse to provide information or otherwise obstruct the audit.

“Refusing to participate, or if you impede an audit, is another de facto cause for termination,” said Diroll-Black.

“Since the enactment of the RIA, we’ve helped a number of our clients prepare for audits,” said Jones. “What USCIS is looking for is reporting and transparency.”

According to Jones, auditors wanted to see documents related to the Regional Center’s structure and organizational chart, which may need updating if there has been turnover.

“Being prepared early, can’t say it enough, is going to be vital,” said Jones. “They really wanted to drill down into day to day, how does it work?”

Both Walker and Jones said auditors asked about specific investors and wanted to be walked through the flow of funds for those investors, from escrow to the NCE to the JCE, and for some, all the way through to return of capital.

“Source of funds and flow of funds is something that is really important to USCIS, and I think to the EB-5 program, in terms of the public’s perception of this being a legitimate immigration program and a job-creating program,” said Jones.

JTC’s role in audits is an active one, as USCIS auditors have asked to see the company’s online platform in action and requested specific information stored online.

“For as many times as we’ve had to push back on our clients and say, ‘no, I need the backup documentation,’ this is our chance to say ‘wow, I’m so glad we’ve been asking for that,’” said Jones. “When they ask us for a screenshot or they ask us to show an attached document, we have them.”

Proactive compliance in EB-5: why job creation isn’t enough

One point the panelists helped clear up was the securities law compliance certification on Form I-956G, which solidifies EB-5’s place in both immigration and securities law frameworks.

“I know of no analogous requirements in any other program,” said Mariza McKee, Partner at Kutak Rock and moderator for the webinar. “They’re having to sort of oversee compliance for NCEs.”

“It’s a statutory obligation,” said Diroll-Black, noting that this stems from some of the biggest problems from the old version of the RC program, under which projects may have been creating jobs, but weren’t handling investor funds properly, resulting in “Regional Centers that were violating their own terms of their business agreements.”

The panelists stressed the importance of proactive compliance and managing information so that it can be included on forms and during audits, rather than putting it off or hoping to cobble together necessary information when an audit comes.

“Staying on top of data gathering is important from a Regional Center’s point of view,” said van der Merwe.

“We’ve worked on over 600 EB-5 projects to date,” said Jones, “looking at what works and what doesn’t so we can help guide our clients to the right end.”

As McKee noted, the goal is to make the EB-5 program safer for investors.

“Without trust,” she said, “the EB-5 program eventually wouldn’t attract much capital.” Whether someone is an investor, attorney, Regional Center operator, or USCIS auditor, “if something doesn’t feel right, it probably isn’t.”

Drawing on his time at USCIS, Diroll-Black summed up the onerous requirements of the RIA and how they’re really intended to make the program stronger, both for investors and for Regional Centers.

“A lot of these things, while interesting and weird and contradictory, are meant to highlight to Regional Centers things that they should be paying attention to. The ultimate goal of compliance is positive compliance. We want to have a good program. We want you to have a solid Regional Center that can create jobs. It’s not always about punishment.”

Important resources for Regional Centers and EB-5 stakeholders

The event was put on by IIUSA, a not-for-profit industry trade association representing the EB-5 Regional Center Program. In addition to this series of informative webinars, IIUSA has published studies on EB-5 economic data and other helpful documents like its FAQ document.

“I think one of our proudest production pieces is the Frequently Asked Questions. So often members of our industry have burning questions they want answers to,” said Jones. “It’s something that IIUSA put a lot of thought into.”

McKee summed up the importance of solidarity in the program by pointing out that unlike the total competition found in other industries, those in EB-5 need to work together to achieve reauthorization of the Regional Center Program, which expires in 2027, making data sharing and collaboration on lobbying efforts crucial.

“We’re all dependent on each others’ success,” she said.