Key Court Cases and Precedent Decisions
EB-5 law has been shaped by landmark decisions from federal courts and the USCIS Administrative Appeals Office (AAO). These decisions establish the standards that adjudicators apply when reviewing petitions, from the at-risk requirement to source of funds documentation to processing timelines. Understanding precedent is essential for attorneys advising EB-5 clients.
Sources: Federal court decisions, USCIS AAO precedent decisions · Last reviewed: April 2026
Key Takeaways
- •Matter of Izummi (1998) remains the foundational precedent on the at-risk requirement, holding that capital must face genuine risk of both gain and loss.
- •Matter of Ho (1998) established the business plan standard requiring demonstrable job creation projections based on verifiable economic data.
- •Matter of Soffici (1998) set the source of funds chain-of-custody documentation requirement that remains central to petition adjudication.
- •Recent federal court decisions have addressed processing delays, fee rules, and the consequences of program lapses, expanding the legal landscape beyond the traditional AAO precedent framework.
Landmark Decisions
Matter of Izummi
At-Risk Requirement22 I&N Dec. 169 (AAO 1998)
Holding:
Capital must be placed at risk with no guaranteed return. Arrangements that protect the investor from loss are inconsistent with the statutory "at risk" requirement. The possibility of gain and loss must be genuine, not theoretical.
Practical Impact:
Established the foundational standard for evaluating whether EB-5 investments meet the at-risk requirement. Cited in virtually every USCIS adjudication involving investment structure questions.
Matter of Ho
Business Plan / Job Creation22 I&N Dec. 206 (AAO 1998)
Holding:
Established the comprehensive business plan standard for EB-5 petitions. A business plan must demonstrate a reasonable likelihood of creating the required number of jobs within a reasonable period, based on verifiable economic projections rather than speculative assumptions.
Practical Impact:
Remains the controlling standard for evaluating business plans. The "Matter of Ho requirements" are routinely referenced in RFEs and denial notices.
Matter of Soffici
Source of Funds22 I&N Dec. 158 (AAO 1998)
Holding:
Defined the requirements for demonstrating lawful source of funds. The investor must trace the path of funds from the original source to the new commercial enterprise, showing that the capital was obtained through lawful means. Unresolved gaps in the chain of documentation can be grounds for denial.
Practical Impact:
Established the source of funds documentation standard that remains central to EB-5 adjudication. The "chain of custody" requirement for tracing funds from origin to investment is directly derived from this decision.
Zhang v. USCIS
Processing Delays / MandamusNo. 20-3939 (2d Cir. 2021)
Holding:
The Second Circuit addressed unreasonable delays in EB-5 petition processing. The court held that USCIS must process petitions within a reasonable timeframe and that prolonged delays may violate the Administrative Procedure Act. The decision established a framework for evaluating when processing delays become actionable.
Practical Impact:
Provided a legal pathway for investors to challenge excessive processing delays. Contributed to USCIS efforts to reduce processing times for EB-5 petitions.
Behring Regional Center v. Wolf
EB-5 Modernization RuleNo. 20-cv-09263 (N.D. Cal. 2021)
Holding:
The court vacated portions of the 2019 EB-5 Modernization Rule, finding that DHS failed to follow proper notice and comment procedures when it reformed TEA designation criteria. The ruling effectively reverted TEA designation to the pre-2019 framework until superseded by the RIA.
Practical Impact:
Disrupted the Modernization Rule framework and contributed to the uncertain regulatory environment that preceded the RIA. Demonstrated the vulnerability of executive branch EB-5 reforms to procedural challenges.
Immigrant Investors Alliance v. USCIS
Program Lapse / Pending PetitionsNo. 21-cv-393 (E.D. Wash. 2021)
Holding:
During the 2021 program lapse, investors with pending I-526 petitions sued to compel USCIS to continue adjudicating their cases. The court addressed whether USCIS had authority to adjudicate petitions filed before the lapse during the period when regional center authorization had expired.
Practical Impact:
Highlighted the consequences of program lapses for pending applicants. Influenced the grandfathering and transition provisions included in the RIA.
Matter of Walsh and Pollard
Capital Investment Definition20 I&N Dec. 60 (BIA 1988)
Holding:
While predating the EB-5 program, this decision established principles later applied to EB-5 investment valuations, including how to assess the fair market value of non-cash contributions and the distinction between investment capital and operational expenses.
Practical Impact:
Influenced USCIS interpretation of what constitutes qualifying "capital" in the EB-5 context, including the treatment of equipment, inventory, and other non-cash contributions.
EB-5 Fee Rule Litigation
USCIS Filing FeesMultiple district courts (2024-2025)
Holding:
Federal courts in multiple jurisdictions addressed challenges to the April 2024 USCIS fee schedule, which significantly increased EB-5 filing fees. A November 2025 court ruling effectively reverted EB-5 fees to pre-April 2024 levels, reducing the I-526E filing fee from the proposed increase back to $3,675.
Practical Impact:
Directly affected the cost structure for EB-5 applicants. Demonstrated that USCIS fee-setting authority is subject to judicial review and that fee increases must satisfy reasonableness standards.
Frequently Asked Questions
What is an AAO decision in the EB-5 context?
The Administrative Appeals Office (AAO) is the USCIS body that reviews appeals of denied EB-5 petitions. When an I-526E or I-829 petition is denied, the investor can appeal to the AAO. AAO decisions, particularly those designated as "adopted" or "precedent" decisions, establish interpretive standards that USCIS adjudicators follow in subsequent cases. While AAO decisions are not binding in the same way as federal court decisions, they represent the agency's authoritative interpretation of immigration law and are widely cited by practitioners.
Can EB-5 investors challenge USCIS decisions in federal court?
Yes. After exhausting administrative remedies (typically an AAO appeal), EB-5 investors can file suit in federal district court challenging USCIS decisions. Federal courts review USCIS actions under the Administrative Procedure Act (APA), applying either the "arbitrary and capricious" standard or "abuse of discretion" standard depending on the type of decision. Several landmark EB-5 cases have been decided at the district and circuit court levels, including challenges to processing delays, fee rules, and regulatory interpretations.
How do court decisions affect pending EB-5 petitions?
Court decisions can have immediate or prospective effects depending on the scope of the ruling. Some decisions apply retroactively to pending cases (for example, when a court vacates a regulation, all cases governed by that regulation are affected). Other decisions apply only to the specific plaintiff or to cases filed after the decision date. USCIS typically issues policy guidance or updates to the Policy Manual following significant court decisions, which informs how adjudicators should handle affected petitions.
What is the most cited EB-5 precedent decision?
Matter of Izummi (22 I&N Dec. 169, AAO 1998) is among the most frequently cited EB-5 decisions. It established key standards for the "at risk" requirement, holding that capital must be subject to the possibility of both gain and loss, and that arrangements guaranteeing the return of capital are inconsistent with the program's requirements. The Izummi decision has shaped how USCIS evaluates investment structures and remains the foundational precedent on the at-risk requirement nearly three decades later.
Where can I find AAO decisions on EB-5 cases?
USCIS publishes designated precedent decisions and selected non-precedent decisions on its website. The AAO maintains a searchable database of decisions organized by topic and form type. For EB-5 cases, the most relevant decisions involve Form I-526 (and I-526E), Form I-829, and regional center designation applications. The AILA (American Immigration Lawyers Association) InfoNet also maintains a database of AAO decisions searchable by keyword. EB5Status tracks significant AAO decisions that establish new interpretive standards or clarify existing requirements.
Related Pages
Reform and Integrity Act: Section by Section | Analysis of the current governing legislation.
Legislative History | The full legislative timeline from 1990 to present.
EB-5 Glossary | Definitions of legal and technical terms referenced in these decisions.
Corrections | Our correction policy and data integrity standards.
Last updated: April 2026
EB5 Status is for educational purposes only. Not legal or investment advice. Case summaries are provided for informational purposes and may not reflect the full complexity of the court’s reasoning. Consult qualified immigration counsel for advice on specific cases.