FIRST AMENDED COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF AND

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FIRST AMENDED COMPLAINT FOR INJUNCTIVE AND DECLARATORY RELIEF AND Powered By Docstoc
					 1
     Ira J. Kurzban, Esquire (State Bar No.: 71563)
 2   Nancy P. Horn, Esquire
     Kurzban, Kurzban, Weinger & Tetzeli, P.A.
 3   2 650 S.W. 27th Avenue, 2nd Floor
     Miami, Florida 33133
 4   (305) 444-0060
 5   Marc Van Der Hout, Esquire (State Bar No.: 80778)
     Van Der Hout & Brigagliano
 6   180 Sutter Street, Fifth Floor
     San Francisco, CA 94104
 7   (415) 981-3000
 8   Daniel C. Levy, Esquire (State Bar No.: 125876)
     6300 Wilshire Blvd.
 9   Suite 1020
     Los Angeles, CA 90048
10   (323) 951-0000
11   Attorneys for Plaintiffs
12
13                              UNITED STATES DISTRICT COURT FOR THE
                                  CENTRAL DISTRICT OF CALIFORNIA
14
15                                                      CASE NO: CV 99-10518-GHK (AJWx)
16
     CHANG, Wen-Wan
17          CHANG, Tsung-Ming
            CHANG, Chiao-Ying                   FIRST AMENDED COMPLAINT FOR
18   CHIANG, Yi Yuan                                 INJUNCTIVE AND DECLARATORY
     HSIEH, Hsien-Ming                               RELIEF AND FOR DAMAGES
19          HSIEH, Shu-Chuan
            HSIEH, Pei-Chen                                     CLASS ACTION
20          HSIEH, Pei-Shan
     KONG, Sung Duck
21          KONG, Hye Ra
            KONG, Hyun Jung
22          KONG, Min Suk
     LAI, Yeh-Chien
23          LAI, Yu Kuei
            LAI, Yen Chih
24          LAI, Chen Ju
     LEE, Yoon Sik
25          LEE, Jong Hee
            LEE, Eung Jun
26          LEE, Sang Eun
            LEE, Eung Sang
27   SHE, Cheng-Hsiung
            SHE, Hui Wen
28



                                                          -1-
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           SHE, Tzu Ming
     ALABAMA ALMARK
 2   LIMITED PARTNERSHIP,
     a Maryland Limited
 3   Partnership,
     ALABAMA BAILEY
 4   LIMITED PARTNERSHIP,
     a Maryland Limited
 5   Partnership,
     ALABAMA COOSA
 6   LIMITED PARTNERSHIP,
     a Maryland Limited
 7   Partnership,
     ALABAMA DALLAS
 8   LIMITED PARTNERSHIP,
     a Maryland Limited
 9   Partnership,
     ALABAMA DENIM
10   LIMITED PARTNERSHIP,
     a Maryland Limited
11   Partnership,
     ALABAMA MILLRY
12   LIMITED PARTNERSHIP,
     a Maryland Limited
13   Partnership,
     ALABAMA PRO SPORTS
14    LIMITED PARTNERSHIP,
     a Maryland Limited
15   Partnership,
     ALABAMA RIVER RUN
16   LIMITED PARTNERSHIP,
     a Maryland Limited
17   Partnership,
     C&W HOTEL
18   LIMITED PARTNERSHIP,
     a Maryland Limited
19   Partnership,
     DELAWARE MILFORD
20   LIMITED PARTNERSHIP,
     a Maryland Limited
21   Partnership,
     GEORGIA ALMARK
22   LIMITED PARTNERSHIP,
     a Maryland Limited
23   Partnership,
     LOUISIANA LaSEVILLA
24   LIMITED PARTNERSHIP,
     a Maryland Limited
25   Partnership,
     MISSISSIPPI BASS
26   LIMITED PARTNERSHIP,
     a Maryland Limited
27   Partnership,
     MISSISSIPPI MAGEE
28



                                                          -2-
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   LIMITED PARTNERSHIP,
     a Maryland Limited
 2   Partnership,
     MISSISSIPPI MCT
 3   LIMITED PARTNERSHIP,
     a Maryland Limited
 4   Partnership,
     MISSISSIPPI NEELY
 5   LIMITED PARTNERSHIP,
     a Maryland Limited
 6   Partnership,
     MISSISSIPPI TEES
 7   LIMITED PARTNERSHIP,
     a Mississippi Limited
 8   Partnership,
     NATIONAL STEAK RESTAURANTS
 9   LIMITED PARTNERSHIP,
     a Maryland Limited Partnership,
10   NORTH CAROLINA K-BARB
     LIMITED PARTNERSHIP,
11   a Maryland Limited Partnership,
     NORTH CAROLINA RUSSELL-
12   HARVELLE HOSIERY LIMITED
     PARTNERSHIP, a Maryland
13   Limited Partnership,
     PENNSYLVANIA LOUNGEWEAR
14   LIMITED PARTNERSHIP,
     a Maryland Limited Partnership,
15   RECAP FUND I LIMITED
     PARTNERSHIP, a Maryland Limited
16   Partnership,
     RECAP FUND V LIMITED
17   PARTNERSHIP, a Maryland Limited
     Partnership,
18   RPC FUND I LIMITED
     PARTNERSHIP, a Maryland Limited
19   Partnership,
     SOUTH CAROLINA MANUFACTURING
20   LIMITED PARTNERSHIP, a Maryland
     Limited Partnership,
21   TENNESSEE LAFAYETTE LIMITED
     PARTNERSHIP, a Maryland Limited
22   Partnership,
     WTC FUND I LIMITED
23   PARTNERSHIP, a Maryland
     Limited Partnership,
24   UNITED STATES EXPORT FUND I
     LIMITED PARTNERSHIP, a Maryland
25   Limited Partnership,
26                    Plaintiffs,
     vs.
27
     UNITED STATES OF AMERICA,
28



                                                          -3-
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1               Defendant.
     _________________________________/
 2
 3           Plaintiffs, by and through their undersigned counsel, individually and on behalf of a class of Plaintiff
 4   investors similarly situated sue the Defendant and allege as follows:
 5                                              I. INTRODUCTION
 6           1.       Plaintiffs, immigrant entrepreneurs and all others similarly situated and the business
 7   partnerships which they joined, seek declaratory and injunctive relief prohibiting the Defendant, United
 8   States of America, and its agents, including the Immigration and Naturalization Service (“INS”), from
 9   retroactively applying new rules and requirements in connection with their administration of the Immigrant
10   Investor Law, 8 U.S.C. § 1153(b)(5).
11           2.       The Immigrant Investor Law allows for an investor, and his or her dependents, who has
12   invested, or is actively in the process of investing, lawfully obtained capital in a new commercial enterprise
13   in the United States for the purpose of creating or saving ten or more jobs for qualified U.S. workers, to
14   obtain lawful permanent residence in the United States. The investor first obtains conditional lawful
15   permanent resident status by way of an approved I-526 petition and an immigrant visa or adjustment of
16   status. If the investor petitioner in good faith maintains the investment that was previously approved for two
17   years, he or she must, within two years of the anniversary of obtaining the status of conditional lawful
18   permanent resident, file an I-829 petition to lift the condition and become a lawful permanent resident.
19   Absent fraud or any impermissible or significant change rendering the commercial enterprise or petitioner
20   unqualified, the I-829 petition must be approved by the INS.
21           3.       Plaintiffs to this action include seven named Plaintiffs and their dependents and a class of
22   investors numbering over 250 immigrant entrepreneurs and their dependents (the “Investor Plaintiffs” or
23   “Plaintiff Investors”) who invested substantial amounts of money in one or more of the twenty-eight (28)
24   Plaintiff partnerships (“Partnership Plaintiffs” or “Plaintiff Partnerships”). On the basis of these investments,
25   the Investor Plaintiffs filed petitions for classification as alien entrepreneurs. These petitions were reviewed
26   and approved by Defendant and its agents, and Investor Plaintiffs were granted the status, authority and
27   permission to enter the United States as conditional residents. In reliance upon this official grant of lawful
28



                                                          -4-
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   status, as well as the Defendant’s rules, interpretations and procedures, and Defendant’s representations,
 2   promises, and assurances that the investments fully complied with the law and fully qualified them for lawful
 3   permanent residence in the United States, the Investor Plaintiffs sold their homes and businesses and
 4   immigrated to the United States with their families to pursue their investments and to begin their new lives.
 5             4.     The Partnership Plaintiffs, also in reliance upon the Defendant’s rules, procedures,
 6   interpretations, representations, promises, and assurances, developed and maintained immigrant investor
 7   programs by which the Investor Plaintiffs’ capital would be invested in United States businesses for the
 8   purpose of creating or preserving American jobs. The investment structure and elements of the programs
 9   used by the Partnership Plaintiffs were, at the time of their structure and implementation, supported and
10   approved by administrative actions, statements, and adjudicatory decisions made by Defendant and its
11   agents.
12             5.     After granting the Investor Plaintiffs conditional lawful permanent residence based on the
13   law, regulations, requirements, and rules relating to the Immigrant Investor Law then in existence, the
14   Defendant, specifically the INS, abruptly, radically, and unlawfully changed the rules governing the
15   Immigrant Investor Law. Under these new unlawful rules and requirements, the Partnership Plaintiffs’
16   investment programs were rendered inoperable and unapprovable, and the Investor Plaintiffs no longer
17   qualified for continued permanent residence. Defendant has also applied, or has stated it will apply, its new
18   rules and requirements retroactively to persons, like the Investor Plaintiffs, who made their investments and
19   achieved lawful conditional permanent resident status. In addition, the Defendant established a secret
20   program to adversely target Investor Plaintiffs and Partnership Plaintiffs in the processing of their residency
21   applications. As a result, the Investor Plaintiffs live in constant fear that their U.S. immigration status will
22   be lost, that they will be deported (and potentially barred from reentry), and that they will lose all the time,
23   energy, assets, and resources expended in immigrating to this country. Due to the cloud of uncertainty
24   which hangs over their immigration status, it is impossible for the Investor Plaintiffs and their families to
25   make future plans regarding their personal lives, finances, or education. Those Investor Plaintiffs with
26   children constantly worry that if deported, their children will not be able to re-adapt to schools in their
27   native country after several years in U.S. schools, and that the education already received will have been
28



                                                          -5-
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   in vain. Investor Plaintiffs immigrated to the U.S. and established themselves in their communities, enrolled
 2   their children in school, and invested their assets, time and hard work, either in new careers or in private
 3   business, to create a successful future for their families. To immigrate to the United States, many Investor
 4   Plaintiffs sold homes and businesses, left successful and profitable jobs, and now again will have to discard
 5   all that they worked hard to establish in the U.S. and will have nothing to return to in their native land.
 6           6.       Defendant’s actions have similarly destroyed the Partnership Plaintiffs. The partnerships
 7   have lost substantial revenues as a result of Defendant’s unlawful actions, and have been unable to fulfill the
 8   goals of the partnerships to generate revenues for the partners and to obtain lawful permanent residency
 9   for the Investor Plaintiffs. The Partnership Plaintiffs therefore seek damages from Defendant in an amount
10   to be determined as well as injunctive and declaratory relief.
11           7.       The retroactive application of these new rules and requirements by Defendant is arbitrary
12   and capricious, and an abuse of discretion. The new requirements were also adopted in violation of the
13   Administrative Procedure Act (“APA”), without lawful notice or the opportunity to comment. Defendant’s
14   complete and sudden revision of the regulatory scheme governing the Immigrant Investor Law was also
15   contrary to the law’s authorizing legislation and exceeded its jurisdiction or authority, and should therefore
16   be nullified pursuant to 5 U.S.C. § 706(2)(C). The retroactive application of the new requirements is illegal
17   and is also in violation of Plaintiffs’ constitutionally protected rights to due process and equal protection.
18   Additionally, Defendant’s adoption of a secret program to target Investor Plaintiffs and Partnership Plaintiffs
19   for adverse treatment is violative of their statutory and constitutional rights. Moreover, because Defendant
20   and its agents engaged in affirmative misconduct, and its wrongful actions have caused a serious injustice
21   to Plaintiffs, Defendant must be estopped from applying the new rules and requirements to Plaintiffs, and
22   from denying the Investor Plaintiffs their lawful permanent residency.
23           8.       The Defendant’s complete revision of the regulatory scheme governing the Immigrant
24   Investor Law, and its retroactive application to the investment programs of the Partnership Plaintiffs, has
25   also resulted in an uncompensated taking of their economic worth, in violation of the Fifth Amendment of
26   the United States Constitution.
27                                      II. JURISDICTION AND VENUE
28



                                                          -6-
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           9.       This Court has subject matter jurisdiction over this action pursuant to 28 U.S.C. § 1331
 2   (federal question jurisdiction), 28 U.S.C. § 2201 (Declaratory Judgment Act), 5 U.S.C. §§ 701 et seq.
 3   (Administrative Procedure Act), and 28 U.S.C. § 1346.
 4           10.      Venue is proper in this district pursuant to 28 U.S.C. § 1391(e).
 5                                              III. PARTIES
 6                                              Investor Plaintiffs
 7           11.      Ms. Wen-Wan CHANG is a citizen of the Republic of China, who invested in and became
 8   a Limited Partner in Louisiana La Sevilla LP. She resides in the Central District of California. Plaintiff
 9   CHANG filed an I-526 visa petition to be classified as an alien entrepreneur which was approved by INS.
10   She obtained her United States lawful conditional resident status on or about November 30, 1996.
11   Plaintiffs Tsung-Ming CHANG and Chiao-Ying CHANG are dependents of Plaintiff who were also
12   granted conditional residency on or about November 30, 1996. Subsequent to Defendant’s approval of
13   the CHANGS’ conditional resident status, the CHANGS liquidated their life savings in Taiwan and they
14   settled in the United States, purchasing a home in the Central District of California. Their daughter attends
15   school in the United States and she has received recognition for her talent as a musician. As a result of
16   Defendant’s unlawful actions described herein, Plaintiff CHANG and her dependents are now subject to
17   having their residency stripped from them and being deported from the United States. They face emotional
18   hardship and other irreparable harm if returned to Taiwan because they have given up their livelihood in
19   Taiwan and would not be able to return to Taiwan in a manner that would enable them to resume their lives
20   in that country. Moreover, the uncertainty regarding their immigration status has created psychological harm
21   and stress resulting in substantial medical problems particularly to the Investor Plaintiff. The Plaintiff
22   Investor’s husband has a brother who is a U.S. citizen and a father who is a lawful permanent resident of
23   the U.S.
24           12.      Mr. Yi Yuan CHIANG is a citizen of the Republic of China, who invested in and became
25   a Limited Partner in C & W Hotel LP. Plaintiff CHIANG filed an I-526 visa petition to be classified as
26   an alien entrepreneur which was approved by INS. He was granted conditional residency on or about
27   September 26, 1996. As a result of Defendant’s unlawful actions described herein, Plaintiff CHIANG is
28



                                                          -7-
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   now subject to having his residency stripped from him and being deported from the United States. Mr.
 2   CHIANG would face innumerable emotional and other hardships if subject to Defendant’s illegal practices.
 3   He has resided in the United States for over 14 years, first as a student, and then as an investor and student.
 4   Mr. CHIANG’S brother and sister-in-law are United States citizens and another brother is a lawful
 5   permanent resident of the U.S. Mr. CHIANG would suffer emotional and irreparable harm if he is not
 6   granted lawful permanent residency but is instead forced to return to Taiwan.
 7           13.      Mr. Hsien Ming HSIEH is a citizen of the Republic of China, who invested in and became
 8   a Limited Partner in Louisiana La Sevilla LP. He resides in the Central District of California. Plaintiff
 9   HSIEH filed an I-526 visa petition to be classified as an alien entrepreneur which was approved by INS.
10   He was granted conditional residency on or about July 20, 1996. Plaintiffs Shu-Chuan HSIEH, Pei-Chen
11   HSIEH and Pei-Shan HSIEH are dependents of Plaintiff who also obtained United States conditional
12   lawful permanent residence on or about July 20, 1996. Subsequent to Defendant’s approval of Mr.
13   HSIEH and his family’s conditional residency, the Plaintiff sold his dental practice in Taiwan as well as a
14   substantial part of his personal property. He purchased a home in the U.S. in the Central District of
15   California. In addition to his investment, the Plaintiff began studying acupuncture and Eastern medicine in
16   the U.S. and hopes to establish a clinic here. His children are attending school in the U.S. and he and his
17   family members are involved in many community activities. As a result of Defendant’s unlawful actions
18   described herein, Plaintiff HSIEH and his dependents are now subject to having their residency stripped
19   from them and being deported from the United States. If deported to Taiwan, Mr.HSIEH has no dental
20   practice to return to as he sold the practice and his clients have gone elsewhere. Similarly, his children
21   would not be accepted back into academic programs because they would be unable to compete due to
22   their prolonged stay in the United States. The HSIEHS would suffer emotional and mental anguish that
23   would disrupt their careers and those of their children.
24           14.      Mr. Sung Duck KONG is a citizen of Korea, who invested in and became a Limited
25   Partner in Mississippi Bass LP. He resides in the Central District of California. Plaintiff KONG filed an
26   I-526 visa petition to be classified as an alien entrepreneur which was approved by INS. He was granted
27   conditional residency on or about March 6, 1997. Plaintiffs Hye Ra KONG, Hyun Jung KONG and Min
28



                                                          -8-
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   Suk KONG are dependents of Plaintiff who also obtained United States conditional lawful permanent
 2   residence on or about March 6, 1997. To obtain his residency in the United States Mr. KONG liquidated
 3   assets in Korea and sold his home for his investment. He left an important position as Sales Director of a
 4   company in Korea and his children left their schools. After coming to the U.S. he and his wife have
 5   established businesses in addition to their investment in Mississippi Bass LP. Mrs. KONG established a
 6   dry cleaning business in the Central District of California and Mr. KONG is a partner in the Song Hack
 7   Dang Acupuncture Clinic. The KONGS also purchased a home in the U.S. As a result of Defendant’s
 8   unlawful actions described herein, Plaintiff KONG and his dependents are now subject to having their
 9   residency stripped from them and being deported from the United States. If returned to Korea, the
10   KONGS will be unable to continue their businesses here, will lose their investment, will be unable to have
11   their children attend school at their current levels and will suffer substantial emotional harm.
12           15.      Mr. Yeh-Chien LAI is a citizen of the Republic of China, who invested in and became a
13   Limited Partner in Louisiana La Sevilla LP. He resides in the Central District of California. Plaintiff LAI
14   filed an I-526 visa petition to be classified as an alien entrepreneur which was approved by INS. He was
15   granted conditional residency on or about October 17, 1996. Plaintiffs Yu Kuei LAI, Yen Chih LAI and
16   Chen Ju LAI are dependents of Plaintiff who also obtained United States conditional lawful permanent
17   residence on or about October 17, 1996. To obtain funds sufficient for his investment in the U.S., Mr. LAI
18   sold his factory in Taiwan. After entering the U.S. as a conditional resident, Mr. LAI made additional
19   investments beyond his investment in Louisiana La Sevilla LP. He invested $1,000,000 in Mirage Inkjet
20   Technology Inc and is a member of its Board of Directors. That company employs 40 to 50 persons in the
21   U.S. who are authorized to work. Mr. LAI’S children are attending school in the U.S. and he has regularly
22   paid taxes in this country. As a result of Defendant’s unlawful actions described herein, Plaintiff LAI and
23   his dependents are now subject to having their residency stripped from them and being deported from the
24   United States. If returned to Taiwan he and his family would suffer irreparable emotional harm. Mr LAI
25   is over 50 and will be unable to find employment. His children will be unable to readapt to the educational
26   system in Taiwan. His wife, as a result of simply the fear of returning to Taiwan where he and his family
27   would suffer a loss of status, has developed substantial medical problems.
28



                                                          -9-
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           16.        Mr. Yoon Sik LEE is a citizen of Korea, who invested in and became a Limited Partner
 2   in Alabama Almark LP. He resides in the Central District of California. Plaintiff LEE filed an I-526 visa
 3   petition to be classified as an alien entrepreneur which was approved by INS. He was granted conditional
 4   residency on or about July 3, 1997. Plaintiffs Jong Hee LEE, Eung Jun LEE, Sang Eun LEE and Eung
 5   Sang LEE are dependents of Plaintiff who also obtained United States conditional lawful permanent
 6   residence on or about July 3, 1997. In order to obtain his and his family’s residency in the U.S., Mr. LEE
 7   invested his life savings in this country by selling his home and his taxi and bus company in Korea. Since
 8   arriving in the U.S. his two sons have joined the U.S. Army. As a result of Defendant’s unlawful actions
 9   described herein, Plaintiff LEE and his dependents have suffered irreparable emotional harm and are now
10   subject to having their residency stripped from them and being deported from the United States. Mr. LEE’S
11   daughter particularly is suffering from depression as a result of the uncertainty caused by the family’s
12   immigration status.
13           17.        Mr. Cheng-Hsiung SHE is a citizen of the Republic of China, who invested in and became
14   a Limited Partner in Georgia Almark LP. He resides in the Central District of California. Plaintiff SHE filed
15   an I-526 visa petition to be classified as an alien entrepreneur which was approved by INS. He was
16   granted conditional residency on or about October 26, 1996. Plaintiffs Hui-Wen SHE and Tzu Ming SHE
17   are dependents of Plaintiff who also obtained United States conditional lawful permanent residence on or
18   about October 26, 1996. As a result of obtaining conditional residency in the U.S., Mr SHE gave up a
19   lucrative construction business in Taiwan, purchased a home in the U.S. and a second home for his
20   children. Because of Defendant’s unlawful actions described herein, Plaintiff SHE and his dependents are
21   now subject to having their residency stripped from them and being deported from the United States. As
22   a result, they are suffering irreparable emotional harm which has caused them to close a second business
23   they purchased in the United States and forced them to seek medical help. The return of the SHE family
24   to Taiwan would result in irreparable harm to them because the educational system for their children is
25   structured in such a manner as to make it impossible for the children to be reintegrated in that country and
26   because. Mr. SHE, having sold his construction business, would also be unable to compete and regain his
27   former position.
28



                                                         - 10 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           18.      Suit on behalf of any plaintiff who is a minor is brought by the investor’s parent, as guardian.
 2                                              Class Allegations
 3           19.      WEN-WAN CHANG, et al., Plaintiffs bring this action as a class action pursuant to Rule
 4   23(a) and (b)(1)(A) and/or (b)(2) of the Federal Rules of Civil Procedure on behalf of themselves and all
 5   others similarly situated. The class consists of the following ascertainable members:
 6                    All persons, including derivative beneficiaries, who invested in one of the
                      Plaintiff Partnerships, who were granted conditional residence status under
 7                    the employment based fifth preference of the Immigration and Nationality
                      Act, section 203 (b)(5), 8 U.S.C. §1153(b)(5) as alien investors and who
 8                    are now subject to the denial of their permanent residency because of the
                      practices and policies of the Defendant as detailed in this complaint.
 9
             20.      The class of investors consists of at least 250 resident investors and their number
10
     makes joinder of all members impracticable.
11
             21.      A community of interest exists between WEN-WAN CHANG, et al. and members of the
12
     class in that there are questions of law and fact which are common to all Plaintiffs and class members. All
13
     Plaintiffs and class members are subject to a change in rules, policies, and procedures of the Defendant as
14
     detailed in paragraph 104 infra which will result in the denial of their permanent residency in the United
15
     States. All of these changes with respect to all Plaintiffs and all members of the class: (1) were made in
16
     violation of the notice and comment provisions of the Administrative Procedures Act; (2) constitute an
17
     abuse of discretion under the APA and the INA; (3) exceed the Defendant’s statutory authority under 5
18
     U.S.C. §706(C)(2); (4) violate due process and equal protection; (5) violate principles of estoppel; and
19
     (6) involve the improper retroactive application of the law.
20
             22.      The claims or defenses of the representative Plaintiffs and Defendant are typical of the
21
     claims of the class or defenses of the Defendant.
22
             23.      The representative Plaintiffs WEN-WAN CHANG et al., will fairly and adequately protect
23
     the interests of the class because they, like all class members, are subject to the unlawful policies and
24
     actions of the Defendant which will result in the denial of their I-829 applications to lift the conditions on
25
     their residency. This legal outcome is identical to that which the members of the respective class have been
26
     subjected to, threatened with, or will be subjected to.
27
             24.      Individual suits by each member of the class would be impracticable because:
28



                                                          - 11 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1                    a.       They would create a risk of inconsistent or varying adjudications with respect to
 2                             the individual members of the class which would establish incompatible standards
 3                             of conduct of the party opposing the class; or
 4                    b.       Defendants have acted or have threatened to act, on grounds generally applicable
 5                             to each member of the class, making appropriate final declaratory and injunctive
 6                             relief with respect to the class as a whole.
 7           25.      The number of individual suits would impose an undue burden on the courts as it would
 8   require the adjudication of at least 250 separate cases.
 9           26.      A class action is superior to other available methods for the fair and efficient adjudication
10   of this controversy.
11           27.      Plaintiffs’ counsel are experienced in class action litigation and can adequately represent
12   the interests of class members as well as the named Plaintiffs.
13           28.      The class members have suffered a denial of a previously available right exercised by other
14   similarly situated investors in Partner Plaintiffs’ Investment programs as a result of the Defendant’s illegal
15   conduct.
16           29.      As a result of the Defendant’s unlawful actions and affirmative misconduct, the Investor
17   Plaintiffs have also suffered substantial and irreparable harm. Many, if not all, of the Investor Plaintiffs are
18   suffering from fear, anxiety, worry, insomnia, and nightmares due to the current uncertainty as to their
19   immigration status and that of their dependents. Other injury, harm or hardship suffered by the Investor
20   Plaintiffs include the current and future financial and emotional losses incurred by being unable to plan for
21   the future. Due to the uncertainty, investments cannot be made, houses cannot be purchased, stable and
22   permanent jobs cannot be secured, overseas travel cannot be planned, and educational opportunities
23   cannot be pursued. Many Investor Plaintiffs have suffered and continue to suffer substantial economic loss
24   and psychological trauma due to the uncertainty of their U.S. immigration status, as they are denied the
25   ability to further invest or otherwise plan financially for their future.
26           30.      Many Investor Plaintiffs have relatives residing in the United States who are either
27   permanent lawful U.S. residents or U.S. citizens. If unlawfully denied their lawful permanent residency and
28



                                                           - 12 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   deported, these Investor Plaintiffs will be separated once again from their mothers or fathers, brothers or
 2   sisters, in-laws, and other relatives residing in the United States. There are even Investor Plaintiffs with
 3   minor children who are U.S. citizens by birth, who would be forced to choose between taking their child
 4   back to a country they have never known, or leaving the child behind with relatives in this country.
 5           31.      Those Investor Plaintiffs who have school-age dependents express great fear, anxiety, and
 6   stress relating to their children’s education. Most of the Investor Plaintiffs’ children left schools in their
 7   native countries upon immigrating to the United States, and have been attending U.S. schools for the past
 8   several years as conditional lawful permanent residents. Both the children and their parents suffer great
 9   fear, anxiety, and stress considering the possibility that they may be deported and their education
10   terminated. Due to the fundamental differences between the educational system of the United States and
11   that of Korea, Taiwan, China, and the other countries from which these children came, it would therefore
12   be almost impossible for these children to re-adapt or reintegrate into the educational system of their native
13   land. Many of these children are no longer fluent in their native tongues, but have now become fluent in
14   English, complicating any possible return to an educational system outside the United States. All of the
15   education received in America would thus be in vain, and this possibility has harmed, and continues to
16   harm, the emotional and physical well-being of the children and their Investor Plaintiff parents.
17           32.      Similarly, most, if not all, of the Investor Plaintiffs sold homes and business, and liquidated
18   assets to emigrate to the United States. Many are unable to return to their home countries because they
19   will be unable to earn a living there in light of their previous actions in liquidating assets and leaving their
20   countries. The constant threat of deportation, brought on by the Defendant’s unlawful actions and
21   affirmative misconduct, causes severe emotional and physical harm to the Investor Plaintiffs and their
22   dependents. The Investor Plaintiffs, in reliance upon the Defendant’s rules, regulations, assurances,
23   representations, statements, and promises that the investment programs offered by the Partnership Plaintiffs
24   complied fully with the law and that their I-526 and I-829 petitions would be approved, emigrated to the
25   United States. Upon arrival, the Investor Plaintiffs and their families found new residences, joined religious
26   or charitable organizations, transferred foreign assets and investments, enrolled in schools, purchased
27   automobiles, established new businesses, friendships, and social and professional relationships, obtained
28



                                                         - 13 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   driver’s licenses, social security cards, and bank accounts, actively participated in their schools and
 2   communities, and fulfilled the dream of lawfully residing in the United States.
 3           33.      In addition, the Investor Plaintiffs in good faith maintained their investments as required by
 4   the Immigrant Investor Law and as set forth in their I-526 petition. All those Investor Plaintiffs so required
 5   timely filed their I-829 petitions to remove conditions. Now, the retroactive application of the new rules
 6   by Defendant exposes them to deportation and the resulting economic, emotional, and familial devastation.
 7                                              Partnership Plaintiffs
 8           34.       Plaintiff ALABAMA ALMARK LIMITED PARTNERSHIP was organized under the
 9   laws of the State of Maryland on March 7, 1997, and is currently in good standing. The partnership has
10   14 limited partners including one or more partners who reside in the Central District of California. Each
11   partner was required to and did invest $500,000 in capital in the form of cash and promissory notes as
12   permitted by INS regulations and the INA. The partners, consistent with normal business practices, were
13   in many instances recruited after the establishment of the partnership as Limited Partners, and a General
14   Partner, in the form of a corporation, was established and appointed to administer the partnership. The
15   partnership was established and was maintained at all times in compliance with the Uniform Limited
16   Partnership Act. In compliance with INS regulations and the INA, the partnership invested in a “troubled
17   business” in a “targeted employment area” in the Southeastern part of the United States. The investment
18   was made in the apparel manufacturing industry which was suffering high unemployment as a result of loss
19   of work due to the North American Free Trade Agreement.               The investment, consistent with INS
20   regulations and the INA, was designed to preserve employment of United States citizens and/or lawful
21   permanent residents in the industry. The investment in the business was accomplished through direct
22   investment in the company by immediately making a cash investment and by placing additional funds in a
23   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
24   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
25   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
26   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
27   business had met performance standards in accordance with the shareholders agreement and that the
28



                                                         - 14 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership made
 2   these investments from the accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently
 3   obtained lawful permanent residence conditionally. The entire business proposal and the proposed
 4   operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual I-526
 5   petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the Plaintiff
 6   Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
 7   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
 8   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
 9   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
10   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
11   investments which will preserve or enhance employment in the United States, generate revenues for the
12   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
13   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
14           35.      Plaintiff ALABAMA BAILEY LIMITED PARTNERSHIP was organized under the laws
15   of the State of Alabama on October 12, 1995, was subsequently reorganized (through a merger) in the
16   State of Maryland on December 22, 1997, and is currently in good standing. The partnership has 5 limited
17   partners including one or more partners who reside in the Central District of California. Each partner was
18   required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by
19   INS regulations and the INA. The partners, consistent with normal business practices, were in many
20   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
21   in the form of a corporation, was established and appointed to administer the partnership. The partnership
22   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
23   In compliance with INS regulations and the INA, the partnership invested in a “troubled business” in a
24   “targeted employment area” in the Southeastern part of the United States. The investment was made in
25   the apparel manufacturing industry which was suffering high unemployment as a result of loss of work due
26   to the North American Free Trade Agreement. The investment, consistent with INS regulations and the
27   INA, was designed to preserve employment of United States citizens and/or lawful permanent residents
28



                                                         - 15 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   in the industry. The investment in the business was accomplished through direct investment in the company
 2   by immediately making a cash investment and by placing additional funds in a trust in exchange for an equity
 3   interest. The purpose of the trust was: (1) to ensure an equity investment in the company; (2) to permit the
 4   immigrant investor to have a voice in the company while allowing the current management to remain in
 5   control; (3) to place the funds “at risk” while at the same time retaining some protection from creditors
 6   because the business was a “troubled business”; and, (4) to ensure that the business had met performance
 7   standards in accordance with the shareholders agreement and that the business was functioning in an
 8   appropriate, lawful, and reasonable business manner. The partnership made these investments from the
 9   accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently obtained lawful permanent
10   residence conditionally. The entire business proposal and the proposed operating procedures of the
11   partnership were fully disclosed in the Plaintiff Investors’ individual I-526 petitions which were all accepted
12   and approved by the Defendant’s agents. Subsequent to the Plaintiff Investors obtaining their residency,
13   and as detailed in this complaint, the INS unlawfully and unconstitutionally changed the criteria for an
14   acceptable investment and determined that the structure used by the partnership was no longer permissible
15   under INS regulations. As a result of these unlawful actions, the partnership, inter alia, has suffered a
16   substantial loss of revenue, has been unable to represent effectively the interests of the partners, and has
17   been unable to fulfill the goals of the partnership to make investments which will preserve or enhance
18   employment in the United States, generate revenues for the partners, and obtain lawful permanent residency
19   for the Investor Plaintiffs. The reputation of the partnership and its ability to continue to operate has been
20   destroyed by the Defendant’s unlawful actions.
21           36.      Plaintiff ALABAMA COOSA LIMITED PARTNERSHIP was organized under the laws
22   of the State of Maryland on October 25, 1996, and is currently in good standing. The partnership has 7
23   limited partners including one or more partners who reside in the Central District of California. Each
24   partner was required to and did invest $500,000 in capital in the form of cash and promissory notes as
25   permitted by INS regulations and the INA. The partners, consistent with normal business practices, were
26   in many instances recruited after the establishment of the partnership as Limited Partners, and a General
27   Partner, in the form of a corporation, was established and appointed to administer the partnership. The
28



                                                         - 16 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   partnership was established and was maintained at all times in compliance with the Uniform Limited
 2   Partnership Act. In compliance with INS regulations and the INA, the partnership invested in a “troubled
 3   business” in a “targeted employment area” in the Southeastern part of the United States. The investment
 4   was made in the apparel manufacturing industry which was suffering high unemployment as a result of loss
 5   of work due to the North American Free Trade Agreement. The investment, consistent with INS
 6   regulations and the INA, was designed to preserve employment of United States citizens and/or lawful
 7   permanent residents in the industry. The investment in the business was accomplished through direct
 8   investment in the company by immediately making a cash investment and by placing additional funds in a
 9   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
10   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
11   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
12   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
13   business had met performance standards in accordance with the shareholders agreement and that the
14   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership made
15   these investments from the accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently
16   obtained lawful permanent residence conditionally. The entire business proposal and the proposed
17   operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual I-526
18   petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the Plaintiff
19   Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
20   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
21   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
22   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
23   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
24   investments which will preserve or enhance employment in the United States, generate revenues for the
25   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
26   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
27
28



                                                         - 17 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           37.      Plaintiff ALABAMA DALLAS LIMITED PARTNERSHIP was organized under the laws
 2   of the State of Alabama on July 11, 1995, was subsequently reorganized (through a merger) in the State
 3   of Maryland on December 22, 1997, and is currently in good standing. The partnership has 22 limited
 4   partners including one or more partners who reside in the Central District of California. Each partner was
 5   required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by
 6   INS regulations and the INA. The partners, consistent with normal business practices, were in many
 7   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
 8   in the form of a corporation, was established and appointed to administer the partnership. The partnership
 9   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
10   In compliance with INS regulations and the INA, the partnership invested in a “troubled business” in a
11   “targeted employment area” in the Southeastern part of the United States. The investment was made in
12   the apparel manufacturing industry which was suffering high unemployment as a result of loss of work due
13   to the North American Free Trade Agreement. The investment, consistent with INS regulations and the
14   INA, was designed to preserve employment of United States citizens and/or lawful permanent residents
15   in the industry. The investment in the business was accomplished through direct investment in the company
16   by immediately making a cash investment and by placing additional funds in a trust in exchange for an equity
17   interest. The purpose of the trust was: (1) to ensure an equity investment in the company; (2) to permit the
18   immigrant investor to have a voice in the company while allowing the current management to remain in
19   control; (3) to place the funds “at risk” while at the same time retaining some protection from creditors
20   because the business was a “troubled business”; and, (4) to ensure that the business had met performance
21   standards in accordance with the shareholders agreement and that the business was functioning in an
22   appropriate, lawful, and reasonable business manner. The partnership made these investments from the
23   accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently obtained lawful permanent
24   residence conditionally. The entire business proposal and the proposed operating procedures of the
25   partnership were fully disclosed in the Plaintiff Investors’ individual I-526 petitions which were all accepted
26   and approved by the Defendant’s agents. Subsequent to the Plaintiff Investors obtaining their residency,
27   and as detailed in this complaint, the INS unlawfully and unconstitutionally changed the criteria for an
28



                                                         - 18 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   acceptable investment and determined that the structure used by the partnership was no longer permissible
 2   under INS regulations. As a result of these unlawful actions, the partnership, inter alia, has suffered a
 3   substantial loss of revenue, has been unable to represent effectively the interests of the partners, and has
 4   been unable to fulfill the goals of the partnership to make investments which will preserve or enhance
 5   employment in the United States, generate revenues for the partners, and obtain lawful permanent residency
 6   for the Investor Plaintiffs. The reputation of the partnership and its ability to continue to operate has been
 7   destroyed by the Defendant’s unlawful actions.
 8           38.      Plaintiff ALABAMA DENIM LIMITED PARTNERSHIP was organized under the laws
 9   of the State of Alabama on July 11, 1995, was subsequently reorganized (through a merger) in the State
10   of Maryland on December 22, 1997, and is currently in good standing. The partnership has 18 limited
11   partners including one or more partners who reside in the Central District of California. Each partner was
12   required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by
13   INS regulations and the INA. The partners, consistent with normal business practices, were in many
14   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
15   in the form of a corporation, was established and appointed to administer the partnership. The partnership
16   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
17   In compliance with INS regulations and the INA, the partnership invested in a “troubled business” in a
18   “targeted employment area” in the Southeastern part of the United States. The investment was made in
19   the apparel manufacturing industry which was suffering high unemployment as a result of loss of work due
20   to the North American Free Trade Agreement. The investment, consistent with INS regulations and the
21   INA, was designed to preserve employment of United States citizens and/or lawful permanent residents
22   in the industry. The investment in the business was accomplished through direct investment in the company
23   by immediately making a cash investment and by placing additional funds in a trust in exchange for an equity
24   interest. The purpose of the trust was: (1) to ensure an equity investment in the company; (2) to permit the
25   immigrant investor to have a voice in the company while allowing the current management to remain in
26   control; (3) to place the funds “at risk” while at the same time retaining some protection from creditors
27   because the business was a “troubled business”; and, (4) to ensure that the business had met performance
28



                                                         - 19 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   standards in accordance with the shareholders agreement and that the business was functioning in an
 2   appropriate, lawful, and reasonable business manner. The partnership made these investments from the
 3   accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently obtained lawful permanent
 4   residence conditionally. The entire business proposal and the proposed operating procedures of the
 5   partnership were fully disclosed in the Plaintiff Investors’ individual I-526 petitions which were all accepted
 6   and approved by the Defendant’s agents. Subsequent to the Plaintiff Investors obtaining their residency,
 7   and as detailed in this complaint, the INS unlawfully and unconstitutionally changed the criteria for an
 8   acceptable investment and determined that the structure used by the partnership was no longer permissible
 9   under INS regulations. As a result of these unlawful actions, the partnership, inter alia, has suffered a
10   substantial loss of revenue, has been unable to represent effectively the interests of the partners, and has
11   been unable to fulfill the goals of the partnership to make investments which will preserve or enhance
12   employment in the United States, generate revenues for the partners, and obtain lawful permanent residency
13   for the Investor Plaintiffs. The reputation of the partnership and its ability to continue to operate has been
14   destroyed by the Defendant’s unlawful actions.
15           39.      Plaintiff ALABAMA MILLRY LIMITED PARTNERSHIP was organized under the laws
16   of the State of Alabama on October 12, 1995, was subsequently reorganized (through a merger) in the
17   State of Maryland on December 22, 1997, and is currently in good standing. The partnership has 7 limited
18   partners including one or more partners who reside in the Central District of California. Each partner was
19   required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by
20   INS regulations and the INA. The partners, consistent with normal business practices, were in many
21   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
22   in the form of a corporation, was established and appointed to administer the partnership. The partnership
23   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
24   In compliance with INS regulations and the INA, the partnership invested in a “troubled business” in a
25   “targeted employment area” in the Southeastern part of the United States. The investment was made in
26   the apparel manufacturing industry which was suffering high unemployment as a result of loss of work due
27   to the North American Free Trade Agreement. The investment, consistent with INS regulations and the
28



                                                         - 20 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   INA, was designed to preserve employment of United States citizens and/or lawful permanent residents
 2   in the industry. The investment in the business was accomplished through direct investment in the company
 3   by immediately making a cash investment and by placing additional funds in a trust in exchange for an equity
 4   interest. The purpose of the trust was: (1) to ensure an equity investment in the company; (2) to permit the
 5   immigrant investor to have a voice in the company while allowing the current management to remain in
 6   control; (3) to place the funds “at risk” while at the same time retaining some protection from creditors
 7   because the business was a “troubled business”; and, (4) to ensure that the business had met performance
 8   standards in accordance with the shareholders agreement and that the business was functioning in an
 9   appropriate, lawful, and reasonable business manner. The partnership made these investments from the
10   accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently obtained lawful permanent
11   residence conditionally. The entire business proposal and the proposed operating procedures of the
12   partnership were fully disclosed in the Plaintiff Investors’ individual I-526 petitions which were all accepted
13   and approved by the Defendant’s agents. Subsequent to the Plaintiff Investors obtaining their residency,
14   and as detailed in this complaint, the INS unlawfully and unconstitutionally changed the criteria for an
15   acceptable investment and determined that the structure used by the partnership was no longer permissible
16   under INS regulations. As a result of these unlawful actions, the partnership, inter alia, has suffered a
17   substantial loss of revenue, has been unable to represent effectively the interests of the partners, and has
18   been unable to fulfill the goals of the partnership to make investments which will preserve or enhance
19   employment in the United States, generate revenues for the partners, and obtain lawful permanent residency
20   for the Investor Plaintiffs. The reputation of the partnership and its ability to continue to operate has been
21   destroyed by the Defendant’s unlawful actions.
22           40.      Plaintiff ALABAMA PRO SPORTS LIMITED PARTNERSHIP was organized in the
23   State of Maryland on January 27, 1997, and is currently in good standing. The partnership has 13 limited
24   partners including one or more partners who reside in the Central District of California. Each partner was
25   required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by
26   INS regulations and the INA. The partners, consistent with normal business practices, were in many
27   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
28



                                                         - 21 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   in the form of a corporation, was established and appointed to administer the partnership. The partnership
 2   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
 3   In compliance with INS regulations and the INA, the partnership invested in a “new commercial enterprise”
 4   in a “targeted employment area” in the Southeastern part of the United States. The investment was made
 5   in the boat building industry.
 6   The investment, consistent with INS regulations and the INA, was made in an area of high unemployment
 7   and was designed to preserve employment of United States citizens and/or lawful permanent residents in
 8   the industry. The investment in the business was accomplished through direct investment in the company
 9   by immediately making a cash investment and by placing additional funds in a trust in exchange for an equity
10   interest. The purpose of the trust was: (1) to ensure an equity investment in the company; (2) to permit the
11   immigrant investor to have a voice in the company while allowing the current management to remain in
12   control; (3) to place the funds “at risk” while at the same time retaining some protection from creditors;
13   and, (4) to ensure that the business had met performance standards in accordance with the shareholders
14   agreement and that the business was functioning in an appropriate, lawful, and reasonable business manner.
15   The partnership made these investments from the accounts of the Investor Plaintiffs and the Investor
16   Plaintiffs subsequently obtained lawful permanent residence conditionally. The entire business proposal and
17   the proposed operating procedures of the partnership were fully disclosed in the Plaintiff Investors’
18   individual I-526 petitions which were all accepted and approved by the Defendant’s agents. Subsequent
19   to the Plaintiff Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
20   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
21   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
22   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
23   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
24   investments which will preserve or enhance employment in the United States, generate revenues for the
25   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
26   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
27
28



                                                         - 22 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           41.      Plaintiff ALABAMA RIVER RUN LIMITED PARTNERSHIP was organized under the
 2   laws of the State of Alabama on July 11,1995, was subsequently reorganized (through a merger) in the
 3   State of Maryland on December 22, 1997, and is currently in good standing. The partnership has 10 limited
 4   partners including one or more partners who reside in the Central District of California. Each partner was
 5   required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by
 6   INS regulations and the INA. The partners, consistent with normal business practices, were in many
 7   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
 8   in the form of a corporation, was established and appointed to administer the partnership. The partnership
 9   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
10   In compliance with INS regulations and the INA, the partnership was investing in a “troubled business” in
11   a “targeted employment area” in the Southeastern part of the United States. The investment was to be
12   made in the apparel manufacturing industry which was suffering high unemployment as a result of loss of
13   work due to the North American Free Trade Agreement. The investment, consistent with INS regulations
14   and the INA, was designed to preserve employment of United States citizens and/or lawful permanent
15   residents in the industry. The investment in the business was to be accomplished through direct investment
16   in the company by immediately making a cash investment and by placing additional funds in a trust in
17   exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in the
18   company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
19   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
20   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
21   business had met performance standards in accordance with the shareholders agreement and that the
22   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership was
23   to make these investments from the accounts of the Investor Plaintiffs and the Investor Plaintiffs
24   subsequently obtained lawful permanent residence conditionally. The entire business proposal and the
25   proposed operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual
26   I-526 petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the
27   Plaintiff Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
28



                                                         - 23 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
 2   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
 3   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
 4   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
 5   investments which will preserve or enhance employment in the United States, generate revenues for the
 6   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
 7   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
 8           42.      Plaintiff C & W HOTEL LIMITED PARTNERSHIP was organized under the laws of the
 9   State of Maryland on November 10, 1994 and was subsequently reorganized and an Amended and
10   Restated Certificate of Limited Partnership was filed with the State of Maryland on December 31, 1996.
11    The partnership has 26 limited partners including one or more partners who reside in the State of
12   California. Each partner was required to and did invest $500,000 or $1,000,000 in capital in the form of
13   cash and promissory notes as permitted by INS regulations and the INA. The partners, consistent with
14   normal business practices, were in many instances recruited after the establishment of the partnership as
15   Limited Partners, and a General Partner, in the form of a corporation, was established and appointed to
16   administer the partnership. The partnership was established and was maintained at all times in compliance
17   with the Uniform Limited Partnership Act. In compliance with INS regulations and the INA, the
18   partnership invested in a “troubled business” in a “targeted employment area” and non-targeted areas
19   (depending on the investment) in the Southwestern part of the United States. The investment was made
20   first in the hotel industry and subsequently in the restaurant business. The investment, consistent with INS
21   regulations and the INA, was designed to preserve employment of United States citizens and/or lawful
22   permanent residents in the industry. The investment in the business was accomplished through direct
23   investment in the company by immediately making a cash investment and by placing additional funds in a
24   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
25   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
26   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
27   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
28



                                                         - 24 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   business had met performance standards in accordance with the shareholders agreement and that the
 2   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership made
 3   these investments from the accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently
 4   obtained lawful permanent residence conditionally. The entire business proposal and the proposed
 5   operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual I-526
 6   petitions which were all accepted and approved by the Defendant’s agents. Subsequently 21 of the 26
 7   foreign investors had their I-829 petitions approved and the condition on their residency lifted. After 21
 8   of the investors obtained their permanent residency, the INS, as detailed in this complaint, unlawfully and
 9   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
10   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
11   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
12   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
13   investments which will preserve or enhance employment in the United States, generate revenues for the
14   partners, and obtain lawful permanent residency for the remaining Investor Plaintiffs. The reputation of the
15   partnership and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
16           43.      Plaintiff DELAWARE MILFORD LIMITED PARTNERSHIP was organized under the
17   laws of the State of Delaware on November 17, 1995, was subsequently reorganized (through a merger)
18   in the State of Maryland on December 22, 1997, and is currently in good standing. The partnership has
19   7 limited partners including one or more partners who reside in the Central District of California. Each
20   partner was required to and did invest $500,000 in capital in the form of cash and promissory notes as
21   permitted by INS regulations and the INA. The partners, consistent with normal business practices, were
22   in many instances recruited after the establishment of the partnership as Limited Partners, and a General
23   Partner, in the form of a corporation, was established and appointed to administer the partnership. The
24   partnership was established and was maintained at all times in compliance with the Uniform Limited
25   Partnership Act. In compliance with INS regulations and the INA, the partnership invested in a “troubled
26   business” in a “targeted employment area” in the Mid-Atlantic region of the United States. The investment
27   was made in the textile manufacturing industry which was suffering high unemployment as a result of loss
28



                                                         - 25 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   of work due to the North American Free Trade Agreement.              The investment, consistent with INS
 2   regulations and the INA, was designed to preserve employment of United States citizens and/or lawful
 3   permanent residents in the industry. The investment in the business was accomplished through direct
 4   investment in the company by immediately making a cash investment and by placing additional funds in a
 5   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
 6   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
 7   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
 8   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
 9   business had met performance standards in accordance with the shareholders agreement and that the
10   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership made
11   these investments from the accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently
12   obtained lawful permanent residence conditionally. The entire business proposal and the proposed
13   operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual I-526
14   petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the Plaintiff
15   Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
16   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
17   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
18   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
19   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
20   investments which will preserve or enhance employment in the United States, generate revenues for the
21   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
22   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
23           44.      Plaintiff GEORGIA ALMARK LIMITED PARTNERSHIP was organized under the laws
24   of the State of Georgia on December 28, 1995, was subsequently reorganized (through a merger) in the
25   State of Maryland on December 22, 1997, and is currently in good standing. The partnership has 27 limited
26   partners including one or more partners who reside in the Central District of California. Each partner was
27   required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by
28



                                                         - 26 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   INS regulations and the INA. The partners, consistent with normal business practices, were in many
 2   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
 3   in the form of a corporation, was established and appointed to administer the partnership. The partnership
 4   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
 5   In compliance with INS regulations and the INA, the partnership first invested in a “new business” in a
 6   “targeted employment area” in the Southeastern region of the United States to generate employment and
 7   thereafter in a “troubled business” to preserve employment. The investment was made in the apparel
 8   manufacturing industry which was suffering high unemployment as a result of loss of work due to the North
 9   American Free Trade Agreement. The investment, consistent with INS regulations and the INA, was
10   designed first to enhance and then to preserve employment of United States citizens and/or lawful
11   permanent residents in the industry. The investment in the business was accomplished through direct
12   investment in the company by immediately making a cash investment and by placing additional funds in a
13   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
14   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
15   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
16   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
17   business had met performance standards in accordance with the shareholders agreement and that the
18   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership made
19   these investments from the accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently
20   obtained lawful permanent residence conditionally. The entire business proposal and the proposed
21   operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual I-526
22   petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the Plaintiff
23   Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
24   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
25   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
26   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
27   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
28



                                                         - 27 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   investments which will preserve or enhance employment in the United States, generate revenues for the
 2   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
 3   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
 4           45.      Plaintiff LOUISIANA LA SEVILLA LIMITED PARTNERSHIP was organized under
 5   the laws of the State of Louisiana on August 9,1995, was subsequently reorganized (through a merger) in
 6   the State of Maryland on December 22, 1997, and is currently in good standing. The partnership has19
 7   limited partners including one or more partners who reside in the Central District of California. Each partner
 8   was required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted
 9   by INS regulations and the INA. The partners, consistent with normal business practices, were in many
10   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
11   in the form of a corporation, was established and appointed to administer the partnership. The partnership
12   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
13   In compliance with INS regulations and the INA, the partnership invested in a “troubled business” in a
14   “targeted employment area” in the Southeastern part of the United States. The investment was made in
15   the apparel manufacturing industry which was suffering high unemployment as a result of loss of work due
16   to the North American Free Trade Agreement. The investment, consistent with INS regulations and the
17   INA, was designed to preserve employment of United States citizens and/or lawful permanent residents
18   in the industry. The investment in the business was accomplished through direct investment in the company
19   by immediately making a cash investment and by placing additional funds in a trust in exchange for an equity
20   interest. The purpose of the trust was: (1) to ensure an equity investment in the company; (2) to permit the
21   immigrant investor to have a voice in the company while allowing the current management to remain in
22   control; (3) to place the funds “at risk” while at the same time retaining some protection from creditors
23   because the business was a “troubled business”; and, (4) to ensure that the business had met performance
24   standards in accordance with the shareholders agreement and that the business was functioning in an
25   appropriate, lawful, and reasonable business manner. The partnership made these investments from the
26   accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently obtained lawful permanent
27   residence conditionally. The entire business proposal and the proposed operating procedures of the
28



                                                         - 28 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   partnership were fully disclosed in the Plaintiff Investors’ individual I-526 petitions which were all accepted
 2   and approved by the Defendant’s agents. Subsequent to the Plaintiff Investors obtaining their residency,
 3   and as detailed in this complaint, the INS unlawfully and unconstitutionally changed the criteria for an
 4   acceptable investment and determined that the structure used by the partnership was no longer permissible
 5   under INS regulations. As a result of these unlawful actions, the partnership, inter alia, has suffered a
 6   substantial loss of revenue, has been unable to represent effectively the interests of the partners, and has
 7   been unable to fulfill the goals of the partnership to make investments which will preserve or enhance
 8   employment in the United States, generate revenues for the partners, and obtain lawful permanent residency
 9   for the Investor Plaintiffs. The reputation of the partnership and its ability to continue to operate has been
10   destroyed by the Defendant’s unlawful actions.
11           46.      Plaintiff MISSISSIPPI BASS LIMITED PARTNERSHIP was organized under the laws
12   of the State of Mississippi on April 15, 1996, was subsequently reorganized (through a merger) in the State
13   of Maryland on December 22, 1997, and is currently in good standing. The partnership has 18 limited
14   partners including one or more partners who reside in the Central District of California. Each partner was
15   required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by
16   INS regulations and the INA. The partners, consistent with normal business practices, were in many
17   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
18   in the form of a corporation, was established and appointed to administer the partnership. The partnership
19   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
20   In compliance with INS regulations and the INA, the partnership invested in a “troubled business” in a
21   “targeted employment area” in the Southeastern part of the United States. The investment was made in
22   the apparel manufacturing industry which was suffering high unemployment as a result of loss of work due
23   to the North American Free Trade Agreement. The investment, consistent with INS regulations and the
24   INA, was designed to preserve employment of United States citizens and/or lawful permanent residents
25   in the industry. The investment in the business was accomplished through direct investment in the company
26   by immediately making a cash investment and by placing additional funds in a trust in exchange for an equity
27   interest. The purpose of the trust was: (1) to ensure an equity investment in the company; (2) to permit the
28



                                                         - 29 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   immigrant investor to have a voice in the company while allowing the current management to remain in
 2   control; (3) to place the funds “at risk” while at the same time retaining some protection from creditors
 3   because the business was a “troubled business”; and, (4) to ensure that the business had met performance
 4   standards in accordance with the shareholders agreement and that the business was functioning in an
 5   appropriate, lawful, and reasonable business manner. The partnership made these investments from the
 6   accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently obtained lawful permanent
 7   residence conditionally. The entire business proposal and the proposed operating procedures of the
 8   partnership were fully disclosed in the Plaintiff Investors’ individual I-526 petitions which were all accepted
 9   and approved by the Defendant’s agents. Subsequent to the Plaintiff Investors obtaining their residency,
10   and as detailed in this complaint, the INS unlawfully and unconstitutionally changed the criteria for an
11   acceptable investment and determined that the structure used by the partnership was no longer permissible
12   under INS regulations. As a result of these unlawful actions, the partnership, inter alia, has suffered a
13   substantial loss of revenue, has been unable to represent effectively the interests of the partners, and has
14   been unable to fulfill the goals of the partnership to make investments which will preserve or enhance
15   employment in the United States, generate revenues for the partners, and obtain lawful permanent residency
16   for the Investor Plaintiffs. The reputation of the partnership and its ability to continue to operate has been
17   destroyed by the Defendant’s unlawful actions.
18           47.      Plaintiff MISSISSIPPI MAGEE LIMITED PARTNERSHIP was organized under the laws
19   of the State of Mississippi on August 8, 1996, was subsequently reorganized (through a merger) in the State
20   of Maryland on December 22, 1997, and is currently in good standing. The partnership has 13 limited
21   partners including one or more partners who reside in the State of California. Each partner was required
22   to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by INS
23   regulations and the INA. The partners, consistent with normal business practices, were in many instances
24   recruited after the establishment of the partnership as Limited Partners, and a General Partner, in the form
25   of a corporation, was established and appointed to administer the partnership. The partnership was
26   established and was maintained at all times in compliance with the Uniform Limited Partnership Act. In
27   compliance with INS regulations and the INA, the partnership invested in a “troubled business” in a
28



                                                         - 30 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   “targeted employment area” in the Southeastern part of the United States. The investment was made in
 2   the apparel manufacturing industry which was suffering high unemployment as a result of loss of work due
 3   to the North American Free Trade Agreement. The investment, consistent with INS regulations and the
 4   INA, was designed to preserve employment of United States citizens and/or lawful permanent residents
 5   in the industry. The investment in the business was accomplished through direct investment in the company
 6   by immediately making a cash investment and by placing additional funds in a trust in exchange for an equity
 7   interest. The purpose of the trust was: (1) to ensure an equity investment in the company; (2) to permit the
 8   immigrant investor to have a voice in the company while allowing the current management to remain in
 9   control; (3) to place the funds “at risk” while at the same time retaining some protection from creditors
10   because the business was a “troubled business”; and, (4) to ensure that the business had met performance
11   standards in accordance with the shareholders agreement and that the business was functioning in an
12   appropriate, lawful, and reasonable business manner. The partnership made these investments from the
13   accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently obtained lawful permanent
14   residence conditionally. The entire business proposal and the proposed operating procedures of the
15   partnership were fully disclosed in the Plaintiff Investors’ individual I-526 petitions which were all accepted
16   and approved by the Defendant’s agents. Subsequent to the Plaintiff Investors obtaining their residency,
17   and as detailed in this complaint, the INS unlawfully and unconstitutionally changed the criteria for an
18   acceptable investment and determined that the structure used by the partnership was no longer permissible
19   under INS regulations. As a result of these unlawful actions, the partnership, inter alia, has suffered a
20   substantial loss of revenue, has been unable to represent effectively the interests of the partners, and has
21   been unable to fulfill the goals of the partnership to make investments which will preserve or enhance
22   employment in the United States, generate revenues for the partners, and obtain lawful permanent residency
23   for the Investor Plaintiffs. The reputation of the partnership and its ability to continue to operate has been
24   destroyed by the Defendant’s unlawful actions.
25           48.      Plaintiff MISSISSIPPI MCT LIMITED PARTNERSHIP was organized under the laws
26   of the State of Maryland on October 31, 1996, and is currently in good standing. The partnership has 8
27   limited partners including one or more partners who reside in the Central District of California. Each partner
28



                                                         - 31 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   was required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted
 2   by INS regulations and the INA. The partners, consistent with normal business practices, were in many
 3   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
 4   in the form of a corporation, was established and appointed to administer the partnership. The partnership
 5   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
 6   In compliance with INS regulations and the INA, the partnership invested in a “troubled business” in a
 7   “targeted employment area” in the Southeastern part of the United States. The investment was made in
 8   a company involved in the assembly of armored trucks and vehicles. The investment, consistent with INS
 9   regulations and the INA, was made in an area of high unemployment and was designed to preserve
10   employment of United States citizens and/or lawful permanent residents in the industry. The investment in
11   the business was accomplished through direct investment in the company by immediately making a cash
12   investment and by placing additional funds in a trust in exchange for an equity interest. The purpose of the
13   trust was: (1) to ensure an equity investment in the company; (2) to permit the immigrant investor to have
14   a voice in the company while allowing the current management to remain in control; (3) to place the funds
15   “at risk” while at the same time retaining some protection from creditors because the business was a
16   “troubled business”; and, (4) to ensure that the business had met performance standards in accordance with
17   the shareholders agreement and that the business was functioning in an appropriate, lawful, and reasonable
18   business manner. The partnership made these investments from the accounts of the Investor Plaintiffs and
19   the Investor Plaintiffs subsequently obtained lawful permanent residence conditionally. The entire business
20   proposal and the proposed operating procedures of the partnership were fully disclosed in the Plaintiff
21   Investors’ individual I-526 petitions which were all accepted and approved by the Defendant’s agents.
22   Subsequent to the Plaintiff Investors obtaining their residency, and as detailed in this complaint, the INS
23   unlawfully and unconstitutionally changed the criteria for an acceptable investment and determined that the
24   structure used by the partnership was no longer permissible under INS regulations. As a result of these
25   unlawful actions, the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to
26   represent effectively the interests of the partners, and has been unable to fulfill the goals of the partnership
27   to make investments which will preserve or enhance employment in the United States, generate revenues
28



                                                         - 32 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   for the partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the
 2   partnership and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
 3           49.      Plaintiff MISSISSIPPI NEELY LIMITED PARTNERSHIP was organized under the laws
 4   of the State of Mississippi on October 30, 1995, was subsequently reorganized (through a merger) in the
 5   State of Maryland on December 22, 1997, and is currently in good standing. The partnership has 7 limited
 6   partners including one or more partners who reside in the Central District of California. Each partner was
 7   required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by
 8   INS regulations and the INA. The partners, consistent with normal business practices, were in many
 9   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
10   in the form of a corporation, was established and appointed to administer the partnership. The partnership
11   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
12   In compliance with INS regulations and the INA, the partnership invested in a “troubled business” in a
13   “targeted employment area” in the Southeastern part of the United States. The investment was made in
14   the apparel manufacturing industry which was suffering high unemployment as a result of loss of work due
15   to the North American Free Trade Agreement. The investment, consistent with INS regulations and the
16   INA, was designed to preserve employment of United States citizens and/or lawful permanent residents
17   in the industry. The investment in the business was accomplished through direct investment in the company
18   by immediately making a cash investment and by placing additional funds in a trust in exchange for an equity
19   interest. The purpose of the trust was: (1) to ensure an equity investment in the company; (2) to permit the
20   immigrant investor to have a voice in the company while allowing the current management to remain in
21   control; (3) to place the funds “at risk” while at the same time retaining some protection from creditors
22   because the business was a “troubled business”; and, (4) to ensure that the business had met performance
23   standards in accordance with the shareholders agreement and that the business was functioning in an
24   appropriate, lawful, and reasonable business manner. The partnership made these investments from the
25   accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently obtained lawful permanent
26   residence conditionally. The entire business proposal and the proposed operating procedures of the
27   partnership were fully disclosed in the Plaintiff Investors’ individual I-526 petitions which were all accepted
28



                                                         - 33 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   and approved by the Defendant’s agents. Subsequent to the Plaintiff Investors obtaining their residency,
 2   and as detailed in this complaint, the INS unlawfully and unconstitutionally changed the criteria for an
 3   acceptable investment and determined that the structure used by the partnership was no longer permissible
 4   under INS regulations. As a result of these unlawful actions, the partnership, inter alia, has suffered a
 5   substantial loss of revenue, has been unable to represent effectively the interests of the partners, and has
 6   been unable to fulfill the goals of the partnership to make investments which will preserve or enhance
 7   employment in the United States, generate revenues for the partners, and obtain lawful permanent residency
 8   for the Investor Plaintiffs. The reputation of the partnership and its ability to continue to operate has been
 9   destroyed by the Defendant’s unlawful actions.
10           50.      Plaintiff MISSISSIPPI TEES LIMITED PARTNERSHIP was organized under the laws
11   of the State of Mississippi on July 21, 1995, and is currently in good standing in the State of Mississippi.
12   The partnership has 8 limited partners including one or more partners who reside in the Central District
13   of California. Each partner was required to and did invest $500,000 in capital in the form of cash and
14   promissory notes as permitted by INS regulations and the INA. The partners, consistent with normal
15   business practices, were in many instances recruited after the establishment of the partnership as Limited
16   Partners, and a General Partner, in the form of a corporation, was established and appointed to administer
17   the partnership. The partnership was established and was maintained at all times in compliance with the
18   Uniform Limited Partnership Act. In compliance with INS regulations and the INA, the partnership invested
19   in a “troubled business” in a “targeted employment area” in the Southeastern part of the United States. The
20   investment was made in the apparel manufacturing industry which was suffering high unemployment as a
21   result of loss of work due to the North American Free Trade Agreement. The investment, consistent with
22   INS regulations and the INA, was designed to preserve employment of United States citizens and/or lawful
23   permanent residents in the industry. The investment in the business was accomplished through direct
24   investment in the company by immediately making a cash investment and by placing additional funds in a
25   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
26   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
27   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
28



                                                         - 34 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
 2   business had met performance standards in accordance with the shareholders agreement and that the
 3   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership made
 4   these investments from the accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently
 5   obtained lawful permanent residence conditionally. The entire business proposal and the proposed
 6   operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual I-526
 7   petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the Plaintiff
 8   Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
 9   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
10   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
11   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
12   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
13   investments which will preserve or enhance employment in the United States, generate revenues for the
14   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
15   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
16           51.      Plaintiff NATIONAL STEAK RESTAURANTS LIMITED PARTNERSHIP was
17   organized in the State of Indiana on July 21, 1995, was subsequently reorganized (through a merger) under
18   the laws of the State of Maryland on December 31, 1997, and is currently in good standing. The
19   partnership has 11 limited partners including one or more partners who reside in the Central District of
20   California. Each partner was required to and did invest $500,000 in capital in the form of cash and
21   promissory notes as permitted by INS regulations and the INA. The partners, consistent with normal
22   business practices, were in many instances recruited after the establishment of the partnership as Limited
23   Partners, and a General Partner, in the form of a corporation, was established and appointed to administer
24   the partnership. The partnership was established and was maintained at all times in compliance with the
25   Uniform Limited Partnership Act. In compliance with INS regulations and the INA, the partnership invested
26   in a “troubled business” in a “targeted employment area.” The investment was made in an operator of
27   several franchise restaurants throughout the United States. The investment, consistent with INS regulations
28



                                                         - 35 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   and the INA, was made in an area of high unemployment and was designed to preserve employment of
 2   United States citizens and/or lawful permanent residents in the industry. The investment in the business was
 3   accomplished through direct investment in the company by immediately making a cash investment and by
 4   placing additional funds in a trust in exchange for an equity interest. The purpose of the trust was: (1) to
 5   ensure an equity investment in the company; (2) to permit the immigrant investor to have a voice in the
 6   company while allowing the current management to remain in control; (3) to place the funds “at risk” while
 7   at the same time retaining some protection from creditors because the business was a “troubled business”;
 8   and, (4) to ensure that the business had met performance standards in accordance with the shareholders
 9   agreement and that the business was functioning in an appropriate, lawful, and reasonable business manner.
10   The partnership made these investments from the accounts of the Investor Plaintiffs and the Investor
11   Plaintiffs subsequently obtained lawful permanent residence conditionally. The entire business proposal and
12   the proposed operating procedures of the partnership were fully disclosed in the Plaintiff Investors’
13   individual I-526 petitions which were all accepted and approved by the Defendant’s agents. Subsequent
14   to the Plaintiff Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
15   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
16   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
17   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
18   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
19   investments which will preserve or enhance employment in the United States, generate revenues for the
20   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
21   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
22           52.      Plaintiff NORTH CAROLINA K-BARB LIMITED PARTNERSHIP was organized
23   under the laws of the State of North Carolina on November 27, 1995, was subsequently reorganized
24   (through a merger) in the State of Maryland on December 17, 1997, and is currently in good standing. The
25   partnership has 5 limited partners including one or more partners who reside in the Central District of
26   California. Each partner was required to and did invest $500,000 in capital in the form of cash and
27   promissory notes as permitted by INS regulations and the INA. The partners, consistent with normal
28



                                                         - 36 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   business practices, were in many instances recruited after the establishment of the partnership as Limited
 2   Partners, and a General Partner, in the form of a corporation, was established and appointed to administer
 3   the partnership. The partnership was established and was maintained at all times in compliance with the
 4   Uniform Limited Partnership Act. In compliance with INS regulations and the INA, the partnership invested
 5   in a “troubled business” in a “targeted employment area” in the Southeastern part of the United States. The
 6   investment was made in the apparel manufacturing industry which was suffering high unemployment as a
 7   result of loss of work due to the North American Free Trade Agreement. The investment, consistent with
 8   INS regulations and the INA, was designed to preserve employment of United States citizens and/or lawful
 9   permanent residents in the industry. The investment in the business was accomplished through direct
10   investment in the company by immediately making a cash investment and by placing additional funds in a
11   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
12   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
13   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
14   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
15   business had met performance standards in accordance with the shareholders agreement and that the
16   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership made
17   these investments from the accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently
18   obtained lawful permanent residence conditionally. The entire business proposal and the proposed
19   operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual I-526
20   petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the Plaintiff
21   Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
22   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
23   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
24   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
25   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
26   investments which will preserve or enhance employment in the United States, generate revenues for the
27
28



                                                         - 37 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
 2   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
 3           53.      Plaintiff NORTH CAROLINA RUSSELL-HARVELLE HOSIERY LIMITED
 4   PARTNERSHIP was organized under the laws of the State of Maryland on December 19, 1996, and is
 5   currently in good standing. The partnership has 13 limited partners including one or more partners who
 6   reside in the Central District of California. Each partner was required to and did invest $500,000 in capital
 7   in the form of cash and promissory notes as permitted by INS regulations and the INA. The partners,
 8   consistent with normal business practices, were in many instances recruited after the establishment of the
 9   partnership as Limited Partners, and a General Partner, in the form of a corporation, was established and
10   appointed to administer the partnership. The partnership was established and was maintained at all times
11   in compliance with the Uniform Limited Partnership Act. In compliance with INS regulations and the INA,
12   the partnership invested in a “troubled business” in a “targeted employment area” in the Southeastern part
13   of the United States. The investment was made in the apparel manufacturing industry which was suffering
14   high unemployment as a result of loss of work due to the North American Free Trade Agreement. The
15   investment, consistent with INS regulations and the INA, was designed to preserve employment of United
16   States citizens and/or lawful permanent residents in the industry. The investment in the business was
17   accomplished through direct investment in the company by immediately making a cash investment and by
18   placing additional funds in a trust in exchange for an equity interest. The purpose of the trust was: (1) to
19   ensure an equity investment in the company; (2) to permit the immigrant investor to have a voice in the
20   company while allowing the current management to remain in control; (3) to place the funds “at risk” while
21   at the same time retaining some protection from creditors because the business was a “troubled business”;
22   and, (4) to ensure that the business had met performance standards in accordance with the shareholders
23   agreement and that the business was functioning in an appropriate, lawful, and reasonable business manner.
24   The partnership made these investments from the accounts of the Investor Plaintiffs and the Investor
25   Plaintiffs subsequently obtained lawful permanent residence conditionally. The entire business proposal and
26   the proposed operating procedures of the partnership were fully disclosed in the Plaintiff Investors’
27   individual I-526 petitions which were all accepted and approved by the Defendant’s agents. Subsequent
28



                                                         - 38 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   to the Plaintiff Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
 2   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
 3   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
 4   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
 5   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
 6   investments which will preserve or enhance employment in the United States, generate revenues for the
 7   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
 8   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
 9           54.      Plaintiff PENNSYLVANIA LOUNGEWEAR LIMITED PARTNERSHIP was organized
10   under the laws of the State of Maryland on October 11, 1996, and is currently in good standing. The
11   partnership has 5 limited partners including one or more partners who reside in the Central District of
12   California. Each partner was required to and did invest $500,000 in capital in the form of cash and
13   promissory notes as permitted by INS regulations and the INA. The partners, consistent with normal
14   business practices, were in many instances recruited after the establishment of the partnership as Limited
15   Partners, and a General Partner, in the form of a corporation, was established and appointed to administer
16   the partnership. The partnership was established and was maintained at all times in compliance with the
17   Uniform Limited Partnership Act. In compliance with INS regulations and the INA, the partnership invested
18   in a “troubled business” in a “targeted employment area” in the Mid-Atlantic region of the United States.
19   The investment was made in the apparel manufacturing industry which was suffering high unemployment
20   as a result of loss of work due to the North American Free Trade Agreement. The investment, consistent
21   with INS regulations and the INA, was designed to preserve employment of United States citizens and/or
22   lawful permanent residents in the industry. The investment in the business was accomplished through direct
23   investment in the company by immediately making a cash investment and by placing additional funds in a
24   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
25   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
26   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
27   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
28



                                                         - 39 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   business had met performance standards in accordance with the shareholders agreement and that the
 2   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership made
 3   these investments from the accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently
 4   obtained lawful permanent residence conditionally. The entire business proposal and the proposed
 5   operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual I-526
 6   petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the Plaintiff
 7   Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
 8   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
 9   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
10   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
11   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
12   investments which will preserve or enhance employment in the United States, generate revenues for the
13   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
14   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
15           55.      Plaintiff RECAP FUND I LIMITED PARTNERSHIP was organized under the laws of
16   the State of Maryland on February 20, 1997, and is currently in good standing. The partnership has 1
17   limited partner. The partner was required to and did invest $500,000 in capital in the form of cash and
18   promissory notes as permitted by INS regulations and the INA. Consistent with normal business practices,
19   the partner was recruited after the establishment of the partnership as a Limited Partner, and a General
20   Partner, in the form of a corporation, was established and appointed to administer the partnership. The
21   partnership was established and was maintained at all times in compliance with the Uniform Limited
22   Partnership Act. In compliance with INS regulations and the INA, the partnership invested in a “troubled
23   business” within a “targeted employment area” in the Mid-Atlantic part of the United States. The
24   investment was made in the machinery business in Maryland.            The investment, consistent with INS
25   regulations and the INA, was designed to preserve employment of United States citizens and/or lawful
26   permanent residents in the industry. The investment in the business was accomplished through direct
27   investment in the company by immediately making a cash investment and by placing additional funds in a
28



                                                         - 40 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
 2   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
 3   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
 4   protection from creditors; and, (4) to ensure that the business had met performance standards in
 5   accordance with the shareholders agreement and that the business was functioning in an appropriate, lawful,
 6   and reasonable business manner. The partnership made these investments from the accounts of the Investor
 7   Plaintiff and the Investor Plaintiff subsequently obtained lawful permanent residence conditionally. The entire
 8   business proposal and the proposed operating procedures of the partnership were fully disclosed in the
 9   Plaintiff Investor’s individual I-526 petitions which was accepted and approved by the Defendant’s agents.
10   Subsequent to the Plaintiff Investor obtaining his residency, and as detailed in this complaint, the INS
11   unlawfully and unconstitutionally changed the criteria for an acceptable investment and determined that the
12   structure used by the partnership was no longer permissible under INS regulations. As a result of these
13   unlawful actions, the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to
14   represent effectively the interests of the partners, and has been unable to fulfill the goals of the partnership
15   to make investments which will preserve or enhance employment in the United States, generate revenues
16   for the partners, and obtain lawful permanent residency for the Investor Plaintiff. The reputation of the
17   partnership and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions
18           56.      Plaintiff RECAP FUND V LIMITED PARTNERSHIP was organized under the laws of
19   the State of Maryland on May 20, 1997, and is currently in good standing. The partnership has 10 limited
20   partners including one or more partners who reside in the State of California. Each partner was required
21   to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by INS
22   regulations and the INA. The partners, consistent with normal business practices, were in many instances
23   recruited after the establishment of the partnership as Limited Partners, and a General Partner, in the form
24   of a corporation, was established and appointed to administer the partnership. The partnership was
25   established and was maintained at all times in compliance with the Uniform Limited Partnership Act. In
26   compliance with INS regulations and the INA, the partnership invested in a “troubled business” within a
27   Regional Center in the Southeastern part of the United States. The investment was made in the waste
28



                                                         - 41 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   removal business in New Orleans, Louisiana. The investment, consistent with INS regulations and the INA,
 2   was designed to preserve employment of United States citizens and/or lawful permanent residents in the
 3   industry. The investment in the business was accomplished through direct investment in the company by
 4   immediately making a cash investment and by placing additional funds in a trust in exchange for an equity
 5   interest. The purpose of the trust was: (1) to ensure an equity investment in the company; (2) to permit the
 6   immigrant investor to have a voice in the company while allowing the current management to remain in
 7   control; (3) to place the funds “at risk” while at the same time retaining some protection from creditors
 8   because the business was a “troubled business”; and, (4) to ensure that the business had met performance
 9   standards in accordance with the shareholders agreement and that the business was functioning in an
10   appropriate, lawful, and reasonable business manner. The partnership made these investments from the
11   accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently obtained lawful permanent
12   residence conditionally. The entire business proposal and the proposed operating procedures of the
13   partnership were fully disclosed in the Plaintiff Investors’ individual I-526 petitions which were all accepted
14   and approved by the Defendant’s agents. Subsequent to the Plaintiff Investors obtaining their residency,
15   and as detailed in this complaint, the INS unlawfully and unconstitutionally changed the criteria for an
16   acceptable investment and determined that the structure used by the partnership was no longer permissible
17   under INS regulations. As a result of these unlawful actions, the partnership, inter alia, has suffered a
18   substantial loss of revenue, has been unable to represent effectively the interests of the partners, and has
19   been unable to fulfill the goals of the partnership to make investments which will preserve or enhance
20   employment in the United States, generate revenues for the partners, and obtain lawful permanent residency
21   for the Investor Plaintiffs. The reputation of the partnership and its ability to continue to operate has been
22   destroyed by the Defendant’s unlawful actions.
23           57.      Plaintiff RPC FUND I LIMITED PARTNERSHIP was organized under the laws of the
24   State of Maryland on May 28, 1997, and is currently in good standing. The partnership has 10 limited
25   partners including one or more partners who reside in the Central District of California. Each partner was
26   required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by
27   INS regulations and the INA. The partners, consistent with normal business practices, were in many
28



                                                         - 42 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
 2   in the form of a corporation, was established and appointed to administer the partnership. The partnership
 3   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
 4   In compliance with INS regulations and the INA, the partnership was investing in a new business within
 5   a Regional Center in the Southeastern part of the United States. The investment was made in a business
 6   in New Orleans, Louisiana whose purpose was to export rice, grains and other U.S. produced food and
 7   non-food. The investment, consistent with INS regulations and the INA, was designed to create
 8   employment of United States citizens and/or lawful permanent residents in the industry indirectly through
 9   export activity and revenues generated by the exports. The investment in the business was accomplished
10   through direct investment in the company by immediately making a cash investment and by placing
11   additional funds in a trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an
12   equity investment in the company; (2) to permit the immigrant investor to have a voice in the company while
13   allowing the current management to remain in control; (3) to place the funds “at risk” while at the same time
14   retaining some protection from creditors; and, (4) to ensure that the business had met performance
15   standards in accordance with the shareholders agreement and that the business was functioning in an
16   appropriate, lawful, and reasonable business manner. The partnership was to make these investments from
17   the accounts of the Investor Plaintiffs. The Investor Plaintiffs subsequently obtained lawful permanent
18   residence conditionally. The entire business proposal and the proposed operating procedures of the
19   partnership were fully disclosed in the Plaintiff Investors’ individual I-526 petitions which were all accepted
20   and approved by the Defendant’s agents. Subsequent to the Plaintiff Investors obtaining their residency,
21   and as detailed in this complaint, the INS unlawfully and unconstitutionally changed the criteria for an
22   acceptable investment and determined that the structure used by the partnership was no longer permissible
23   under INS regulations. As a result of these unlawful actions, the partnership, inter alia, has suffered a
24   substantial loss of revenue, has been unable to represent effectively the interests of the partners, and has
25   been unable to fulfill the goals of the partnership to make investments which will preserve or enhance
26   employment in the United States, generate revenues for the partners, and obtain lawful permanent residency
27
28



                                                         - 43 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   for the Investor Plaintiffs. The reputation of the partnership and its ability to continue to operate has been
 2   destroyed by the Defendant’s unlawful actions.
 3           58.      Plaintiff SOUTH CAROLINA MANUFACTURING LIMITED PARTNERSHIP was
 4   organized under the laws of the State of South Carolina on April 22, 1996, was subsequently reorganized
 5   (through a merger) in the State of Maryland on December 22, 1997, and is currently in good standing. The
 6   partnership has 7 limited partners including one or more partners who reside in the State of California.
 7   Each partner was required to and did invest $500,000 in capital in the form of cash and promissory notes
 8   as permitted by INS regulations and the INA. The partners, consistent with normal business practices, were
 9   in many instances recruited after the establishment of the partnership as Limited Partners, and a General
10   Partner, in the form of a corporation, was established and appointed to administer the partnership. The
11   partnership was established and was maintained at all times in compliance with the Uniform Limited
12   Partnership Act. In compliance with INS regulations and the INA, the partnership invested in a “troubled
13   business” in a “targeted employment area” in the Southeastern part of the United States. The investment
14   was made in the apparel manufacturing industry which was suffering high unemployment as a result of loss
15   of work due to the North American Free Trade Agreement. The investment, consistent with INS
16   regulations and the INA, was designed to preserve employment of United States citizens and/or lawful
17   permanent residents in the industry. The investment in the business was accomplished through direct
18   investment in the company by immediately making a cash investment and by placing additional funds in a
19   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
20   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
21   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
22   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
23   business had met performance standards in accordance with the shareholders agreement and that the
24   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership made
25   these investments from the accounts of the Investor Plaintiffs and the Investor Plaintiffs subsequently
26   obtained lawful permanent residence conditionally. The entire business proposal and the proposed
27   operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual I-526
28



                                                         - 44 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the Plaintiff
 2   Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
 3   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
 4   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
 5   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
 6   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
 7   investments which will preserve or enhance employment in the United States, generate revenues for the
 8   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
 9   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
10           59.      Plaintiff TENNESSEE LAFAYETTE LIMITED PARTNERSHIP was organized under
11   the laws of the State of Tennessee on April 15, 1996, was subsequently reorganized (through a merger)
12   in the State of Maryland on December 22, 1997, and is currently in good standing. The partnership has
13   5 limited partners including one or more partners who reside in the Central District of California. Each
14   partner was required to and did invest $500,000 in capital in the form of cash and promissory notes as
15   permitted by INS regulations and the INA. The partners, consistent with normal business practices, were
16   in many instances recruited after the establishment of the partnership as Limited Partners, and a General
17   Partner, in the form of a corporation, was established and appointed to administer the partnership. The
18   partnership was established and was maintained at all times in compliance with the Uniform Limited
19   Partnership Act. In compliance with INS regulations and the INA, the partnership invested in a “troubled
20   business” in a “targeted employment area” in the Southeastern part of the United States. The investment
21   was to be made in the apparel manufacturing industry which was suffering high unemployment as a result
22   of loss of work due to the North American Free Trade Agreement. The investment, consistent with INS
23   regulations and the INA, was designed to preserve employment of United States citizens and/or lawful
24   permanent residents in the industry. The investment in the business was accomplished through direct
25   investment in the company by immediately making a cash investment and by placing additional funds in a
26   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
27   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
28



                                                         - 45 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
 2   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
 3   business had met performance standards in accordance with the shareholders agreement and that the
 4   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership was
 5   to make these investments from the accounts of the Investor Plaintiffs and the Investor Plaintiffs
 6   subsequently obtained lawful permanent residence conditionally. The entire business proposal and the
 7   proposed operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual
 8   I-526 petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the
 9   Plaintiff Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
10   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
11   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
12   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
13   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
14   investments which will preserve or enhance employment in the United States, generate revenues for the
15   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
16   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
17           60.      Plaintiff WTC FUND I LIMITED PARTNERSHIP was organized under the laws of the
18   State of Maryland on March 19, 1997, and is currently in good standing. The partnership has 5 limited
19   partners including one or more partners who reside in the Central District of California. Each partner was
20   required to and did invest $500,000 in capital in the form of cash and promissory notes as permitted by
21   INS regulations and the INA. The partners, consistent with normal business practices, were in many
22   instances recruited after the establishment of the partnership as Limited Partners, and a General Partner,
23   in the form of a corporation, was established and appointed to administer the partnership. The partnership
24   was established and was maintained at all times in compliance with the Uniform Limited Partnership Act.
25   In compliance with INS regulations and the INA, the partnership was investing in a new business within
26   a Regional Center in the Southeastern part of the United States. The investment was to be made in a
27   business in New Orleans, Louisiana whose purpose was to export computers and automobiles to Russia
28



                                                         - 46 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   and Eastern Europe. The investment, consistent with INS regulations and the INA, was designed to create
 2   employment of United States citizens and/or lawful permanent residents in the industry indirectly through
 3   export activity and revenues generated by the exports. The investment in the business was accomplished
 4   through direct investment in the company by immediately making a cash investment and by placing
 5   additional funds in a trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an
 6   equity investment in the company; (2) to permit the immigrant investor to have a voice in the company while
 7   allowing the current management to remain in control; (3) to place the funds “at risk” while at the same time
 8   retaining some protection from creditors because the business was a “troubled business”; and, (4) to ensure
 9   that the business had met performance standards in accordance with the shareholders agreement and that
10   the business was functioning in an appropriate, lawful, and reasonable business manner. The partnership
11   was to make these investments from the accounts of the Investor Plaintiffs. The Investor Plaintiffs
12   subsequently obtained lawful permanent residence conditionally. The entire business proposal and the
13   proposed operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual
14   I-526 petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the
15   Plaintiff Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
16   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
17   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
18   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
19   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
20   investments which will preserve or enhance employment in the United States, generate revenues for the
21   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
22   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
23           61.      Plaintiff UNITED STATES EXPORT FUND LIMITED PARTNERSHIP was organized
24   under the laws of the State of Maryland on July 10, 1997, and is currently in good standing. The
25   partnership has 1 limited partner. The partner was required to and did invest $500,000 in capital in the form
26   of cash and promissory notes as permitted by INS regulations and the INA. The partner, consistent with
27   normal business practices, was recruited after the establishment of the partnership as a Limited Partner, and
28



                                                         - 47 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   a General Partner, in the form of a corporation, was established and appointed to administer the
 2   partnership. The partnership was established and was maintained at all times in compliance with the
 3   Uniform Limited Partnership Act. In compliance with INS regulations and the INA, the partnership was
 4   investing in a new business within a Regional Center in the Southeastern part of the United States. The
 5   investment was made in a business in New Orleans, Louisiana, whose purpose was to provide export
 6   related services including credit insurance, financing and factoring, and some overseas exporting. The
 7   investment, consistent with INS regulations and the INA, was designed to create employment of United
 8   States citizens and/or lawful permanent residents in the industry indirectly through export activity and
 9   revenues generated by the exports. The investment in the business was accomplished through direct
10   investment in the company by immediately making a cash investment and by placing additional funds in a
11   trust in exchange for an equity interest. The purpose of the trust was: (1) to ensure an equity investment in
12   the company; (2) to permit the immigrant investor to have a voice in the company while allowing the current
13   management to remain in control; (3) to place the funds “at risk” while at the same time retaining some
14   protection from creditors because the business was a “troubled business”; and, (4) to ensure that the
15   business had met performance standards in accordance with the shareholders agreement and that the
16   business was functioning in an appropriate, lawful, and reasonable business manner. The partnership was
17   to make these investments from the accounts of the Investor Plaintiffs. The Investor Plaintiffs subsequently
18   obtained lawful permanent residence conditionally. The entire business proposal and the proposed
19   operating procedures of the partnership were fully disclosed in the Plaintiff Investors’ individual I-526
20   petitions which were all accepted and approved by the Defendant’s agents. Subsequent to the Plaintiff
21   Investors obtaining their residency, and as detailed in this complaint, the INS unlawfully and
22   unconstitutionally changed the criteria for an acceptable investment and determined that the structure used
23   by the partnership was no longer permissible under INS regulations. As a result of these unlawful actions,
24   the partnership, inter alia, has suffered a substantial loss of revenue, has been unable to represent
25   effectively the interests of the partners, and has been unable to fulfill the goals of the partnership to make
26   investments which will preserve or enhance employment in the United States, generate revenues for the
27
28



                                                         - 48 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   partners, and obtain lawful permanent residency for the Investor Plaintiffs. The reputation of the partnership
 2   and its ability to continue to operate has been destroyed by the Defendant’s unlawful actions.
 3                    Defendant
 4           62.      Defendant is the United States of America. Agents of the United States of America,
 5   including the United States Department of Justice (“DOJ”), the United States Immigration and
 6   Naturalization Service (“INS”), the United States Department of State (“DOS”), the Attorney General of
 7   the United States, the Commissioner of the Immigration and Naturalization Service, the Secretary of State,
 8   and their respective delegates are responsible for the administration and enforcement of the Immigration
 9   and Nationality Act, including the Immigrant Investor Law, the Immigrant Investor Pilot Program, and the
10   rules and regulations promulgated thereunder.
11                           IV. ALLEGATIONS COMMON TO ALL COUNTS
12           The Immigrant Investor Law
13           63.      In 1990, Congress enacted the Immigrant Investor Law, section 203(b)(5) of the
14   Immigration and Nationality Act (“INA”), 8 U.S.C. § 1153(b)(5), which provided that lawful permanent
15   resident visas would be made available to qualified immigrants seeking to enter the United States for the
16   purpose of engaging or investing in a “new commercial enterprise.” To qualify, the alien must invest or be
17   actively in the process of investing $500,000 in capital in targeted employment areas, or $1,000,000 in all
18   other areas, and must demonstrate that not fewer than 10 new jobs will be created for U.S. citizens or
19   aliens authorized to be employed in the United States.
20           64.      A “targeted employment area” is, at the time of the investment, a rural area or an area
21   which has experienced high unemployment (of at least 150 percent of the national average rate).
22           65.      In October 1992, Congress created the ‘Immigrant Investor Pilot Program” as an
23   amendment to the Immigrant Investor Law so as to encourage immigrants to pool their capital and invest
24   in “Regional Centers,” which are entities established “for the promotion of economic growth, including
25   increased export sales, improved regional productivity, job creation, and increased domestic capital
26   investment.” Under the Pilot Program, the requirement that each individual investment create ten jobs for
27
28



                                                         - 49 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   qualifying individuals was expressly relaxed, allowing instead for an immigrant investor who invested in a
 2   Regional Center to demonstrate “indirect” job creation as a result of the investment.
 3           66.      It was the intent of Congress in passing the Immigrant Investor Law that “the application
 4   of the term ‘new commercial enterprise’ be broad” and that programs involving “pooled investments” be
 5   included. The purpose of the immigrant investor visa program was to attract foreign investors to invest new
 6   capital, create new businesses, and to promote job creation or retention so as to benefit the U.S. economy
 7   and labor market. So that this purpose might be achieved, Congress intended that immigrant investor
 8   petitions be reviewed by Defendant in a flexible and reasonable manner.
 9           67.      The INS’s final rules for implementing the immigrant investor provisions of INA §
10   203(b)(5) were promulgated on November 29, 1991, 56 Fed. Reg. 60897, and went into effect that day.
11
12           68.      Section 204.6(g) of the regulations provides that any number of immigrant investors may
13   invest in a single enterprise (i.e., a “pooled” investment), so long as each individual’s investment results in
14   the creation of at least 10 full-time jobs for qualifying employees. This section also provides that there can
15   be co-owners of the new commercial enterprise who are not seeking classification as “immigrant investors,”
16   as well as foreign or domestic corporations or partnerships.
17           69.      Section 204.6(j)(5) addresses the statutory requirement that the immigrant investor be
18   engaged in the management of the new commercial enterprise, either through day-to-day managerial control
19   or through policy formulation. The regulation provides that a limited partner will be considered sufficiently
20   engaged in the management of the enterprise if the limited partnership agreement gives the immigrant
21   investor “certain rights, powers, and duties normally granted to limited partners under the Uniform Limited
22   Partnership Act.”
23           70.      The INS also broadly construed the term “capital” to allow for the use of debt instruments,
24   such as promissory notes, to be considered investments of capital.
25           Attaining Lawful Permanent Residence Under the Immigrant Investor Law
26           71.      To obtain lawful permanent residence under the Immigrant Investor Law, an immigrant
27   entrepreneur must first file a petition (Form I-526 Petition by Alien Entrepreneur) setting forth information
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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   about the investor and the qualifying investment. The petition must be filed with the INS Service Center
 2   having jurisdiction over the area in which the new commercial enterprise is or will be principally doing
 3   business.
 4           72.      The date the I-526 petition is properly filed establishes the applicant’s “priority date,” which
 5   determines when the applicant may interview with a consular officer, or adjust status for permanent
 6   residence. Once the I-526 petition is approved by the INS, an interview with a consular officer from the
 7   State Department or an adjustment of status interview with an INS officer is scheduled when a visa
 8   becomes available.
 9           73.       The I-526 petition must be accompanied by evidence that the alien has invested or is
10   actively in the process of investing lawfully obtained capital in a new commercial enterprise in the United
11   States which will create full-time positions for not fewer than 10 qualifying employees. In the case of an
12   investment in a business defined as a “troubled business,” the petition must be accompanied by evidence
13   that the number of existing employees is being or will be maintained at no less than the pre-investment level
14   for a period of at least two years.
15           74.      In the case of petitions submitted under the Immigrant Investor Pilot Program, a petition
16   must be accompanied by evidence that the alien has invested, or is actively in the process of investing,
17   capital obtained through lawful means within a Regional Center designated by the INS, and that the
18   petitioner has placed the required amount of capital at risk for the purpose of generating a return. Petitions
19   under the Pilot Program need only demonstrate “indirect” job creation, rather than the “direct” job creation
20   required under the Immigrant Investor Law. In other words, a petition under the Pilot Program must be
21   accompanied by evidence that the investment will create 10 full-time positions either directly or indirectly
22   through revenues generated from increased exports resulting from the Pilot Program. Such evidence may
23   be demonstrated by reasonable methodologies.
24           75.      The INS Service Center thereafter adjudicates the I-526 petition, and if it is determined
25   that the potential immigrant (and the investment program) has met the requirements of INA § 203(b)(5),
26   the petition is approved and a Notice of Approval is sent to the immigrant investor. The immigrant investor
27   and his dependents then obtain conditional lawful permanent resident status either by visa processing at a
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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   State Department consular post, or through adjustment of status in the United States by the INS. Upon
 2   entering the United States or completion of the adjustment of status process, the immigrant investor and
 3   his or her dependents are admitted for permanent residence on a conditional basis. The immigrant investor
 4   must then file to have the conditional status removed within the 90-day period before the second
 5   anniversary of the alien’s lawful admission for permanent residence.
 6           76.      The petition to remove conditions (Form I-829) must be accompanied by evidence that
 7   the investor invested or was actively in the process of investing the requisite capital in the qualifying
 8   enterprise (just as in the I-526 petition), and that the investor has in good faith sustained those actions
 9   throughout the two-year period of the alien’s residency in the United States. The INS has stated that the
10   requirement that the investor has sustained his or her investment during the two years will be considered
11   “flexibly.” The documentary requirements for the I-829 are minimal according to the INS’s own guidelines
12   because substantial documentation is presented at the first (I-526) stage of the process. The immigrant
13   investor must submit evidence that he or she created or can be expected to create 10 full-time jobs for
14   qualifying employees, or in the case of a “troubled business,” that the commercial enterprise maintained
15   the number of existing employees at no less than the pre-investment level for the period following the
16   investor’s admission as a conditional permanent resident. If it is found that the investor has made this
17   showing, his or her conditional status must be removed, and he or she becomes a lawful permanent resident
18   of the United States. The decision on the I-829 petition shall be made by the INS within 90 days of the
19   date of filing the petition or within 90 days of an interview, unless the interview is waived by the INS,
20   whichever is later.
21                             Investment Programs of the Partnership Plaintiffs
22           77.      The Partnership Plaintiffs offered investment programs, all with similar program elements
23   or structure, to immigrant investors such as the Investor Plaintiffs. All of the Partnership Plaintiffs’
24   investment programs and program elements complied fully with existing and long-standing INS rules,
25   requirements, interpretations or pronouncements regarding the Immigrant Investor Law.
26           78.      Immigrant investors who participated in investment programs offered by the Partnership
27   Plaintiffs invested the $500,000 or $1,000,000 as required by law by placing cash and promissory notes
28



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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   for the full amount with the partnership. Typically, the investor would make a substantial initial cash
 2   payment of $125,000, $200,000, or $300,000, plus a promissory note for the remainder in a $500,000
 3   investment, or $300,000, $400,000 or $500,000, plus a promissory note for the remainder in a
 4   $1,000,000 capital investment. The balance of the promissory note is generally required to be paid in four
 5   or five annual installments followed by a final balloon payment, which is paid after the two-year conditional
 6   period has expired and the immigrant investor has achieved lawful permanent resident status. The initial
 7   cash payment was held in an escrow account until the necessary approvals on the I-526 petitions were
 8   received from the INS or the DOS and the investor and his or her family became conditional lawful
 9   residents. Upon receipt of such approvals, the immigrant investor was admitted as a partner in one of the
10   limited partnerships (represented here by the Partnership Plaintiffs), and the escrowed funds were released
11   to the business entities connected with the investment program to commence satisfaction of the job-creation
12   requirements.
13           79.      The limited partnership, such as the Partnership Plaintiffs, represents the investment vehicle
14   for the immigrant investor. The partnership aggregates (or pools) many immigrant investors and locates a
15   qualified business in which to invest.
16           80.      The immigrant investors’ funds are then used to make an equity investment in the selected
17   business in accordance with the investment program’s requirements. Funds which are not needed for
18   immediate business operations, in some partnerships, are placed in a trust for the benefit of the business
19   and partnership. The trust funds may only be used for legitimate business purposes, but notwithstanding
20   the use of the trust, those funds may still be accessible to creditors. The trust provision therefore ensures
21   that while the investment in the business is an equity investment, the immigrant investor has a voice in the
22   management of the business, and the funds are at risk.
23           81.      Under most, but not all, investor agreements, the partnership agrees to pay the immigrant
24   investor a minimum annual return on the invested cash based upon the partnership having available funds.
25   The immigrant investor is also granted an option to sell his limited partnership interest back to the
26   partnership after the balance of the promissory note has been fully paid. The partnership has a
27
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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   corresponding option to buy back the immigrant investor’s limited partnership interest at that time. Both
 2   of these transactions are widely accepted standard business practices for concluding an equity investment.
 3           82.      Another program element typically included in most investment agreements between the
 4   Investor Plaintiffs and the Partnership Plaintiffs is a provision allowing for the deduction of reasonable
 5   management fees and costs.
 6           83.      Each of the Investor Plaintiffs invested in one of the partnerships represented by the
 7   Partnership Plaintiffs. Based on these investments, each Investor Plaintiff separately filed an I-526 petition,
 8   accompanied by exhaustive evidence describing, inter alia, the investment and investment program
 9   elements, including but not limited to, the use of a limited partnership, promissory note, business trust,
10   redemption provision, and the provision for an annual return on the invested cash. The INS, upon a
11   thorough review of each and every Investor Plaintiff’s I-526 petition, and the application of the existing
12   rules, requirements, and regulations, approved each and every I-526 petition filed by the Investor Plaintiffs.
13   Thereafter INS granted adjustment of status or the DOS granted an immigrant visa in each and every
14   Investor Plaintiff’s case. These approvals were made by the INS and the DOS with full knowledge and
15   disclosure of all elements and structure of the investment programs at issue. Each I-526 petition of the
16   individual Investor Plaintiffs was filed separately on a different date and was individually reviewed,
17   evaluated and ultimately approved by a different INS official on a different date. It was not coincidence,
18   therefore, that each INS official evaluated and approved each individual I-526 petition by applying the
19   identical, existing INS rules, policies, procedures, and guidelines to determine whether the individual
20   investment at issue met the qualifying criteria for approval under the law. Further, and not coincidentally,
21   thousands of other petitions separately filed by other immigrant investors containing the same or similar
22   investment features as those of the Investor Plaintiffs, were independently evaluated by various INS officials
23   at various times in compliance with INS’s existing rules, policies and guidance prior to unlawful precedent
24   decisions, again resulting in approvals.
25           84.      In addition to these and other consistent approvals by the INS of investor petitions
26   containing identical investor program elements, the INS and the DOS promised, represented, and assured
27   the Partnership Plaintiffs, their partners, representatives, and agents that their investment programs fully
28



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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   complied with the Immigrant Investor Law, the Pilot Program, and the relevant existing rules and
 2   regulations. Through their approval of each and every I-526 petition for each investor and through
 3   numerous published opinions and policies, the INS and the DOS repeatedly and publicly assured and
 4   represented that petitions containing investment programs identical to those offered by the Partnership
 5   Plaintiffs would not be a cause to deny a petition which was otherwise approvable.
 6           85.      Prior to the INS’s unlawful adoption of its new rules and requirements, INS statements,
 7   memoranda, and operating instructions expressly approved of the structure and elements of the investment
 8   programs at issue. Moreover, the INS and DOS, since the passage of the Immigrant Investor Law,
 9   consistently approved immigrant investor petitions, issued immigrant visas, granted adjustment of status,
10   granted conditional lawful permanent resident status, and removed the two-year condition to such status,
11   to many hundreds of alien entrepreneurs who participated in investor programs containing some or all of
12   the investment structure and elements at issue here. Indeed, no such petition or application was ever denied
13   based upon these same or similar investment features prior to the Defendant’s unlawful and wholesale
14   revision of the Immigrant Investor Law’s rules and requirements.
15           86.      In reliance upon the Defendant’s rules, regulations, assurances, representations, statements,
16   and promises that the investment programs offered by the Partnership Plaintiffs complied fully with the law,
17   and that petitions by the immigrant investors of these programs were approvable, the Partnership Plaintiffs
18   advertised the program, accepted capital contributions from investors, and made investments in U.S.
19   businesses. The Investor Plaintiffs represent some of the immigrant entrepreneurs who made capital
20   contributions to the Partnership Plaintiffs in reliance upon Defendant’s rules, regulations, assurances, and
21   prior consistent approvals of petitions containing investments in programs containing all or some of the same
22   program elements or structure.
23           87.      The Investor Plaintiffs likewise reasonably relied upon the Defendant’s rules, regulations,
24   assurances, representations, statements, and promises that the investment programs offered by the
25   Partnership Plaintiffs complied fully with the law and that their I-526 and I-829 petitions would be
26   approved. The Investor Plaintiffs would not have made these substantial investments, uprooted their
27   families, and immigrated to the United States had they known that the Defendant would unlawfully change
28



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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   the rules and requirements in mid-stream, thereby ensuring that their investment and their immigration to the
 2   United States would fail.
 3           The Unlawful Adoption and Retroactive Application of New Rules by the INS
 4           88.      Despite promising and proclaiming as early as 1996 and later throughout 1997 that any new
 5   rules or requirements relating to the Immigrant Investor Law would be promulgated in accordance with the
 6   rulemaking procedures of the Administrative Procedures Act and would only be applied prospectively, in
 7   December 1997, the INS abruptly and radically (and secretly) changed its rules and requirements, without
 8   notice and comment, for adjudicating petitions under the Immigrant Investor Law. The INS also instructed
 9   that its new rules and requirements would be applied retroactively to petitioners like the Investor Plaintiffs,
10   and others, who had achieved lawful permanent resident status, but who had yet to have their two-year
11   conditions removed. The chronology of events is as follows:
12           89.      On October 20, 1997, the INS Office of Adjudications (“OA”) issued a field memorandum
13   to all INS Regional Directors (among others) to provide “guidance on adjudicating Form I-526, Petition
14   for Alien Entrepreneur, under section 203(b)(5) of the INA, and existing regulations.” The Office of
15   Adjudications reiterated the INS prior practice of approving immigrant investor petitions in which immigrant
16   investors participated in investment programs containing one or more of the following program elements:
17   the use of promissory notes, balloon payments, redemption agreements, business trusts, the payment of
18   reasonable management and other fees, and guaranteed interest returns on the cash investment. These
19   program elements had long been recognized by the INS as complying with the Immigrant Investor Law and
20   its regulations. This compliance is confirmed by the approvals of thousands of immigrant investor petitions
21   that contained investments in programs with some or all of these program elements.
22           90.      Notwithstanding the guidance issued by INS on October 20, 1997 to ensure the continued
23   operation of the EB-5 program, on or before December 1, 1997 the INS secretly directed all Service
24   Centers to freeze adjudicating petitions involving pooled investment programs, such as those programs
25   offered by the Partnership Plaintiffs. Subsequently, and at the INS’s request, the Department of State
26   issued a similar freeze on visa applications containing these programs. The institution of this unlawful
27   “freeze” was concealed from U.S. businesses such as the Partnership Plaintiffs, which were using their
28



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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   investment programs to raise substantial sums of capital and create or maintain employment, and from
 2   immigrant investors such as the Investor Plaintiffs, who had invested substantial capital into such programs
 3   and who were filing visa petitions on the basis of those same investments. The INS’s unlawful freeze on
 4   adjudications was subsequently publicly confirmed in the INS’s Operating Instruction of March 11, 1998.
 5           91.      On December 10, 1997, the DOS issued a State Department Cable to all diplomatic and
 6   consular posts instructing them to immediately suspend visa processing in certain immigrant-investor cases
 7   because the DOS had been informed by the Office of Programs at INS Headquarters that the INS was
 8   “undertaking a review of some of the provisions of various types of investment and partnership agreements
 9   which many applicants have used to obtain petition approval in the EB-5 [immigrant entrepreneur]
10   category.”
11           92.      At or about the same time in early December, 1997, the INS secretly decided that it would
12   not publish rules it had prepared in final form to alter the Immigrant Investor Program. Instead, the
13   Defendant sought to circumvent the notice and comment requirements of the APA by issuing a General
14   Counsel’s memorandum and then using that memorandum to create what purported to be independent
15   adjudications by the Administrative Appeals Office (AAO). These so-called “adjudications” would later
16   be used as the reason for failing to comply with the APA.
17           93.      On December 19, 1997, the INS Office of the General Counsel (“OGC”) issued a secret
18   thirty-six page legal memorandum, which concluded, generally, that investment programs with certain
19   elements (including elements found in the investment programs used by the Investor Plaintiffs in connection
20   with the Partnership Plaintiffs) which were previously approved by INS on a routine basis for more than
21   six years, were now suddenly objectionable under the new rules and requirements as set forth and reflected
22   in the OGC’s memorandum. In sum, the OGC declared that investment programs with such program
23   elements or structure would no longer comply with the Immigrant Investor Law, and that its new rules and
24   requirements were to be applied retroactively through a process that included the revocation of previously
25   approved I-526 petitions and the application of the new rules retroactively to conditional residents in the
26   status of Plaintiff Investors.
27
28



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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           94.      The OGC’s December 19, 1997 Memorandum, which was not made public until it was
 2   attached to the INS’s March 11, 1998 Operating Instruction, objected to the use of the following
 3   provisions: (1) the use of a cash down payment with the remainder of the investor’s contribution in
 4   promissory notes; (2) a multi-year investment plan on a promissory note with a substantial balloon payment
 5   after the conditions on the investor’s permanent residence is removed; (3) an option given to the investor
 6   to sell the investment for a fixed price that may be less than, equal to, or greater than the alien’s cash
 7   contribution; (4) an option given to the enterprise or limited partnership to buy the investment at a fixed
 8   price; (5) a provision that allows or requires the commercial enterprise to place sufficient cash into a bank
 9   account to guarantee that funds will be available to repay the investor if the sell option is exercised; (6)
10   withholding a portion of the capital contribution for attorneys’ fees, finders’ fees, and other management
11   costs; and (7) a guaranteed return on the cash portion of the investment. Prior to this date, each of these
12   investor program elements had been approved by each and every relevant INS adjudication, statement,
13   and operating instruction. Moreover, since 1992, the INS had consistently approved thousands of
14   immigrant investor petitions involving petitioners, including Investor Plaintiffs, who had participated in
15   investor programs containing some or all of these program elements.
16           95.      The OGC further made plain that the INS must apply the new requirements, as set forth
17   and reflected in its December 19, 1997 Memorandum, retroactively to immigrant investors who had
18   achieved lawful permanent residence, such as the Investor Plaintiffs, but who have not as yet had their two-
19   year conditions removed. The new requirements also were to be retroactively applied to immigrant
20   investors whose filed petitions were approved already and were awaiting interviews at consular posts
21   abroad or adjustment of status in the United States preparatory to receiving conditional lawful permanent
22   residence, and to immigrant investors who had filed petitions but that had not yet been adjudicated because
23   of the (unlawful) INS freeze or hold.
24           96.      The opinions, interpretations, and requirements announced in the OGC memorandum were
25   contradictory to written opinions of the INS Administrative Appeals Office, prior written opinions of the
26   OGC, as well as the rules which the INS had consistently applied over many years in adjudicating
27   thousands of immigrant investor petitions, and were contradictory to the promises, representations, and
28



                                                         - 58 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   assurances made by the INS to U.S. businesses such as the Partnership Plaintiffs and to immigrant investors
 2   such as the Investor Plaintiffs. In particular, each of the challenged program elements had been previously
 3   approved by the INS and/or the DOS in one or more of the following written and published documents,
 4   adjudications, public statements, and opinions, constituting the available administrative jurisprudence as to
 5   the interpretation and implementation of the Immigrant Investor Law, as well as other oral and written
 6   statements, pronouncements, and opinions:
 7                    a.      An August 31, 1993 decision of the INS Administrative Appeals Unit (“AAU”)
 8                            (now know as the “AAO”), which affirmed a district director’s decision approving
 9                            a petition containing a promissory note;
10                    b.      A September 10, 1993 Opinion of the OGC;
11                    c.      A September 24, 1993 letter from Lawrence Weinig, the INS official in charge of
12                            administering the Immigrant Investor Law (Acting Associate Commissioner for
13                            Examinations);
14                    d.      An October 25, 1994 decision of the AAU approving the Fuddruckers Restaurant
15                            Program;
16                    e.      A May 25, 1995 decision of the AAU approving the C & W Hotel Management
17                            program;
18                    f.      A December 21, 1995 letter from Michael Straus, Acting Chief Immigrant Branch,
19                            Adjudications, and INS official in charge of administering the Immigrant Investor
20                            Law;
21                    g.      INS Operating Instructions to Service Centers dated October 20, 1997 expressly
22                            approving each of the program elements;
23                    h.      A history of consistent, uniform and repeated INS and DOS approvals of
24                            thousands of immigrant investor petitions, applications for immigrant visas, petitions
25                            to adjust status, applications to enter the United States as conditional lawful
26                            permanent residents, and petitions to remove the two-year conditions.
27
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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           97.      In fact, on information and belief, since the enactment of the Immigrant Investor Law in
 2   1990 until 1997, not a single immigrant investor petition, visa application, petition to adjust status, or
 3   petition to remove the two-year condition was ever denied or rejected solely because of the use of one of
 4   the above-stated investment program structures or elements.
 5           98.      The case information “black out” suggested by a DOS action cable of February 22, 1998,
 6   became official on March 11, 1998, when the INS’s Office of Programs, in its Operating Instruction
 7   “Immigrant Investor (EB-5) Petitions with Certain Key Features,” instructed all Service Centers to suspend
 8   all communications with petitioning companies, aliens, or their legal counsel. The OGC’s December 19,
 9   1997 Memorandum was attached to the March 11, 1998 Operating Instruction, and it was the first time
10   that it became public and officially applicable to all immigrant investor petitions.
11           99.      The INS March 11, 1998 Operating Instruction also instructed all Service Centers to place
12   all immigrant investor petitions involving “pooled” investments on “hold,” and to immediately cease the
13   adjudication of all such cases because the OGC had determined that “although some business agreements
14   used in current investment programs originally appeared to constitute acceptable investment arrangements,
15   they in fact did not comport with the law because they contained some combination of the provisions held
16   to be invalid in the December 19, 1997 OGC opinion.” In other words, the Operating Instruction directed
17   all INS and DOS offices to follow the purported rules and requirements adopted and reflected in the
18   OGC’s December 19, 1997 Memorandum, and it further directed that the new rules and requirements
19   were to be applied retroactively to previously filed petitions awaiting adjudication, to previously approved
20   petitions, and to previously granted lawful permanent resident statuses.
21           100.     The INS Office of Programs, consistent with the Defendant’s plan to avoid publication in
22   the Federal Register and the notice and comment requirements, ordered each of the INS’s four Service
23   Centers to select cases that raised the issues raised in the OGC’s December 19, 1997 Memorandum and
24   forward those cases to the AAO to become “precedent” decisions.
25           101.     On June 12, 1998, Joseph R. Greene, the Acting Associate Commissioner of Programs
26   issued a memorandum explaining that the AAO had received 19 immigrant investor petitions on certification
27   from the four Service Centers (pursuant to the March 11, 1998, Operating Instruction), and was preparing
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                                                         - 60 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   decisions on these cases. The INS would then designate certain “precedent decisions” from these 19
 2   certified cases.
 3           102.       The AAO, however, is part of the INS Office of Adjudications, and is under the direct
 4   supervision of the INS management team. Further belying the independence and impartiality of the AAO
 5   is the fact that it periodically consults and in fact did consult with the INS’s Office of General Counsel
 6   (author of the December 19, 1997 Memorandum setting out the new rules and requirements for immigrant
 7   investor petitions), as well as other INS offices before issuing “precedent decisions” certified to it from the
 8   regional service centers. The AAO submitted its proposed decisions in each of the precedent decisions to
 9   the OGC for its review and approval prior to the publication by the AAO of these decisions. In sum, the
10   AAO simply lacks the independence to fairly and impartially decide administrative appeals. The OGC,
11   through its legal memorandum of December 19, 1997, ensured the outcome of these cases and that no
12   pending or previously approved immigrant investor petitions would be found approvable under the INS’s
13   new rules and requirements.
14           103.       Notwithstanding the AAO’s lack of independence and the INS’s use of the AAO merely
15   to circumvent APA notice and comment requirements, the AAO in June and July, 1998 issued four so-
16   called “precedent” decisions in Matter of Soffici, Int. Dec. No. 3359, __ I. & N. Dec. __, 1998 WL
17   471519 (Exam. Comm. June 30, 1998), Matter of Izumii, Int. Dec. No. 3360, __ I. & N. Dec. __, 1998
18   WL 483977 (Exam. Comm. July 13, 1998), Matter of Hsiung, Int. Dec. No. 3361, __ I. & N. Dec. __,
19   1998 WL 483978 (Exam. Comm. July 31, 1998) and Matter of Ho, Int. Dec. No. 3362, __ I. & N. Dec.
20   __, 1998 WL 483979 (Exam. Comm. July 31, 1998) all denying petitions of investors.
21           104.       The four so-called precedent decisions of Soffici, Izumii, Hsiung and Ho, merely put in
22   “precedent” form the OGC Memorandum and the rules and regulations the INS had previously refused
23   to publish in December 1997 in accordance with the notice and comment provisions of the APA. These
24   new rules and requirements were radically contrary to the existing rules, requirements, policies and
25   procedures applied by the INS in all prior adjudications over a six-year period. The drastic changes to
26   the rules which affect all Partnership Plaintiffs and will result in the denial of all Investor Plaintiffs’ I-829
27   applications to lift their conditional residency are as follows:
28



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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           a.       New Rule: In order for a petitioner to be considered to have established an original
 2                    business, he must have had a hand in the original creation of the new commercial enterprise
 3                    and must have been present at its inception. Any investor who was not a member of the
 4                                                                                       Prior
                      partnership at the time it was established is automatically disqualified. Rule: The INS at
 5                                                                                                no time required
 6                                                                                                an investor to
 7                                                                                                be present at, or
 8                    play a hand in, the paper or legal formation of a limited partnership or corporation in order
 9                    to be deemed to have “established” a new commercial enterprise. Rather, the INS
10                    consistently and repeatedly held that multiple limited partners who invested in a limited
11                    partnership after the time the limited partnership was legally formed had “established” a
12                    new commercial enterprise. The requirement that an investor “establish a new commercial
13                    enterprise” under the Immigrant Investor Law was merely a means of distinguishing
14                    between an investment made in a “new” enterprise, as opposed to an investment made in
15                    an “ongoing” or “existing” enterprise being reorganized or restructured. The distinction
16                    was made purely for purposes of determining the requisite job creation requirements which
17                    applied to the two types of enterprises. So long as the investment would ultimately create
18                    the requisite number of jobs (i.e., the purpose of the EB-5 program), the investment
19                    qualified under the law. The new requirement is unworkable and illogical as it would have
20                    the investor agree to make an investment before he knew about the investment or business
21                    plan, since no business has yet been formed.
22           b.       New Rule: Merely establishing and capitalizing a new commercial enterprise and signing
23                    a commercial lease are not sufficient to show that an immigrant-investor petitioner has
24                    placed his capital at risk. A petitioner must, instead, provide evidence that he is personally
25                    and actively involved in the business activity.
26
27
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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1                    Prior Rule: Investors were at no time required to be “active,” as opposed to “passive,”
 2                    participants, pursuant to the Uniform Limited Partnership Act. In fact, participants would
 3                    jeopardize their limited partnership status if they actively managed the partnership.
 4           c.       New Rule: An alien may not enter into a redemption agreement with the new commercial
 5                    enterprise at any time prior to completing all of his cash payments under a promissory note,
 6                    and in no event may the alien enter into a redemption agreement prior to the end of the
 7                    two-year period of conditional residence.
 8                    Prior Rule: The INS issued and consistently applied an operating instruction and opinion
 9                    of the INS General Counsel that allowed for redemption agreements to be entered into
10                    prior to the end of the two-year period of conditional residence, so long as the redemption
11                    itself did not occur until after the two-year period of conditional residence or, in the case
12                    of a promissory note, after the promissory note has been paid in full. None of the investor
13                    Plaintiffs’ interests were redeemed prior to the end of the two year period of conditional
14                    residency.
15           d.       New Rule: A redemption agreement between an alien investor and the new commercial
16                    enterprise constitutes a debt arrangement.
17                    Prior Rule: The INS permitted investments containing redemption agreements (which
18                    provided for the redemption to take place after the two-year period of conditional
19                    residency) to qualify as an “at risk” investment where the redemption was payable if the
20                    partnership or investment entity was successful, thus earning a profit. The investor still risks
21                    losing some or all of his investment in the event the partnership is unsuccessful or does not
22                    earn a profit. In fact, it is standard business practice in equity investments to allow buy
23                    back or buy out provisions at some point in the investment.
24           e.       New Rule: An alien may not receive guaranteed returns from a new commercial enterprise
25                    while he owes money to the new commercial enterprise.
26
27
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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1                    Prior Rule: The INS issued and consistently applied an express operating instruction to
 2                    the contrary allowing enterprises to make guaranteed payments to investors, even while
 3                    the investor still owes money to the commercial enterprise.
 4           f.       New Rule: Funds that are used for business purposes but not for job creation cannot be
 5                    considered as part of the invested capital. Thus, all amounts attributable to start the new
 6                    commercial enterprise, to pay for managerial or escrow fees associated therewith, or for
 7                    any other legitimate business expense associated with the investment, are not part of total
 8                    required investment amount, as they are not “employment-creating,” “job-related,” or
 9                    “profit-generating.”
10                    Prior Rule: In all prior AAO opinions and INS approvals funds that were used to cover
11                    legitimate business, escrow and managerial expenses associated with the investment, were
12                    considered as investment capital at risk. The INS permitted all amounts attributable to the
13                    start-up of the new commercial enterprise, and other legitimate managerial, escrow and
14                    business expenses to be included in the total requisite amount of the capital contribution.
15           g.       New Rule: All capital must be valued at fair market value in United States dollars,
16                    including promissory notes used as capital. In determining the fair market value of a
17                    promissory note, it is necessary to consider, among other things, present value, as well as
18                    the fair market value of the assets securing the note. The fair market value of the
19                    promissory note can be reduced by “considerable expense and effort” to execute on
20                    foreign assets.
21                    Prior Rule: In accordance with years of administrative jurisprudence, all promissory notes
22                    used as capital in immigrant investments were consistently and routinely valued by the INS
23                    at face value, not fair market value.
24           h.       New Rule: Under certain circumstances, a promissory note that does not itself constitute
25                    capital may constitute evidence that the alien is “in the process of investing” other capital,
26                    such as cash. In such a case, the petitioner must substantially complete payments on the
27                    promissory note prior to the end of the two-year conditional period. Whether the
28



                                                         - 64 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1                    promissory note constitutes capital or is simply evidence that the alien is in the process of
 2                    investing other capital, nearly all of the money due under the promissory note must be
 3                    payable within two years, without provisions for extensions.
 4                    Prior Rule: In accordance with years of administrative jurisprudence, and the INS’s
 5                    application of the Immigrant Investor Law, 8 U.S.C. §1153(b)(5), the INS never imposed
 6                    a time limit of any kind on the term of a promissory note in order for the investment utilizing
 7                    the note to qualify under the Immigrant Investor Law.
 8           i.       New Rule: A promissory note secured by assets owned by a petitioner can constitute
 9                    capital only if: it is secured by specifically identified assets which belong to the petitioner,
10                    the security interests in the note are perfected in the jurisdiction in which the assets are
11                    located, and the assets are fully amenable to seizure by a U.S. note holder.
12                    Prior Rule: The INS did not require security for promissory notes to be perfected or
13                    amenable to seizure under the UCC’s perfected security interest standards.
14           j.       New Rule: Regardless of its location, a new commercial enterprise that is engaged directly
15                    or indirectly in lending money to job-creating businesses may only lend money to
16                    businesses located within targeted areas in order for a petitioner to be eligible for the
17                    reduced minimum capital requirement. In other words, only businesses located in the
18                    targeted employment area may benefit from the investment.
19                    Prior Rule: The INS consistently held that petitioners qualified for the reduced minimum
20                    capital requirement of $500,000 if their investment was made in a new commercial
21                    enterprise located within a targeted employment area. There was at no time any exclusion
22                    where businesses located outside the targeted area, in addition to those inside the targeted
23                    area, benefitted from the investment. The sole purpose of the targeted employment area
24                    was to create jobs in rural areas or areas of high unemployment. So long as this criteria
25                    was met, the benefit to additional businesses outside the targeted area in no way
26                    disqualified the investment from receiving the reduced minimum investment requirement.
27
28



                                                         - 65 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           k.       New Rule: Under the Immigrant Investor Pilot Program, if a new commercial enterprise
 2                    is engaged directly or indirectly in lending money to job-creating businesses, such job-
 3                    creating businesses must all be located within the geographic limits of the regional center.
 4                    The location of the new commercial enterprise is not controlling.
 5                    Prior Rule: The INS consistently held that petitioners qualified for the application of
 6                    indirect job creation criteria if their investment was made in a new commercial business
 7                    located within a regional center. There was never a separate requirement imposed by the
 8                    INS that all of the petitioner’s investment activities must benefit businesses solely within the
 9                    regional center in order for the petitioner to qualify for indirect job-creation criteria.
10           l.       New Rule: Third party guarantees are prohibited, bank accounts cannot be used as
11                    security, and capital invested using a trust reserve is not deemed “at risk.”
12                    Prior Rule: The INS repeatedly approved investments containing trust agreements. The
13                    INS recognized that the purpose of the trust is most beneficial where an investment was
14                    made in a “troubled business.” In that instance, the trust will prevent the business from
15                    utilizing all of the investment funds up-front and prevents the funds from being immediately
16                    seized by creditors. Further, the INS permitted petitioners to place their investments in
17                    escrow accounts pending the approval of their I-526 petition. Third-party guarantees
18                    were permitted by the INS so long as not backed by a government obligation and bank
19                    accounts qualified as security.
20           m.       New Rule: New ownership or a new corporation is not sufficient to establish a new
21                    commercial enterprise. A petitioner engaging in the reorganization or restructuring of a pre-
22                    existing business may not cause a net loss of employment.
23                    Prior Rule: The INS consistently deemed that a new partnership, for example, acquiring
24                    a pre-existing commercial business constituted the “establishment of a new commercial
25                    enterprise” and there was no prior requirement that the petitioner show whether the
26                    reorganization or restructuring initially did not cause a net loss of employment. So long as
27
28



                                                          - 66 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1                    the petitioner satisfied the requisite job-creation criteria for a new commercial enterprise,
 2                    the petition qualified under the law.
 3           n.       New Rule: A petitioner must not only demonstrate that he is the legal owner of the
 4                    invested capital and that he acquired the legal ownership of the invested capital through
 5                    lawful means, but he must trace the source of the funds over many years including through
 6                    donors. The definition of unlawful funds has been expanded to include funds earned in the
 7                    United States without work authorization.
 8                    Prior Rule: The INS consistently and repeatedly permitted petitioners to set forth in a
 9                    sworn affidavit and through minimal documentation, if any, that they had obtained the
10                    investment funds through lawful means. If the funds were supplied by a donor, an affidavit
11                    by the petitioner to that effect was sufficient. Lawful funds was broadly defined and only
12                    excluded illegal drug profits. The new rule is designed to unlawfully defeat any valid
13                    petition as there are no limits or boundaries on the amount of information the INS can
14                    request. Further, the rule is arbitrary as the INS routinely utilizes the resources of the CIA
15                    and FBI to trace the financial and work history of aliens on conditional residency status to
16                    uncover any prior unlawful activity.
17           o.       New Rule: If the new commercial enterprise is a holding company, the full requisite
18                    amount of capital must be made available to the business(es) most closely responsible for
19                    creating the employment on which the petition is based.
20                    Prior Rule: The INS at no time required that holding companies make the full amount of
21                    capital available to the businesses responsible for creating the employment. Payments
22                    towards expenses and costs associated with starting the partnership and other legitimate
23                    business expenses associated with the investment were permitted, without reducing the
24                    amount of the qualifying intitial capital contribution. Paragraph 103(f), above, is
25                    incorporated herein by reference.
26           p.       New Rule: If a petitioner places the investment funds in an escrow account pending the
27                    outcome of his I-526 petition, the funds are not deemed to have been placed at risk and
28



                                                         - 67 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1                    no investment is deemed to have been made, unless the petitioner shows that the funds in
 2                    escrow are actually committed to the new commercial enterprise, i.e. the funds will be
 3                    available and put to use for job creation purposes immediately and irrevocably upon
 4                    approval of the petition and visa issuance or adjustment of status. Such rule is also set
 5                    forth in the August 28, 1988 memorandum issued and released to all Regional Directors
 6                    by the INS Executive Commissioner and the Office of Policy and Planning.
 7                    Prior Rule: The INS has consistently considered investments placed in escrow accounts
 8                    to meet the qualifying capital contribution amount, and to be deemed a legal mechanism
 9                    which places the funds sufficiently “at risk,” regardless of whether the funds are in escrow
10                    pending the approval of the I-526 petition. There was never a requirement by the INS that
11                    the funds be “immediately,” “unequivocally,” and/or “irrevocably” released into the
12                    commercial enterprise for job creation purposes or a requirement that the petitioner
13                    establish that such an agreement was entered.
14           q.       New Rule: A petitioner may not make material changes to a petition that has already
15                    been filed (or even approved) in an effort to achieve compliance or make an apparently
16                    now “deficient” petition conform to the INS’s new retroactive requirements. Immigrant
17                    investors, therefore, can not “retroactively” amend their petitions so as to cure any
18                    deficiencies caused by the retroactive application of the INS’s new rules and requirements.
19
20                    Prior Rule: This rule is most egregious as it is directly contrary to the INS’s long standing
21                    practice and procedure allowing petitioners to rectify errors or add or delete information
22                    from their petitions in order to achieve compliance. This rule is particularly nefarious as it
23                    applies to all Investor Plaintiffs who filed their petitions prior to the precedent decisions
24                    (and in accordance with the prior rules), and then are subsequently required to comply with
25                    the new rules issued in the precedent decisions, yet are given no opportunity to change
26                    their petitions in order to comply.
27
28



                                                         - 68 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           105.     None of the requirements reflected in the so-called precedent decisions were ever
 2   previously imposed by the INS and are not required by the statute or its regulations. The Defendant may
 3   not rely on these self-proclaimed “precedent” decisions as the AAO is incapable of properly issuing rules
 4   through adjudication, as it is not an impartial and independent adjudicative body. Moreover, the AAO’s
 5   “precedent” decisions merely reflect the INS’ new rules and requirements set forth in the OGC’s
 6   December 19, 1997 Memorandum, both of which were promulgated in violation of the APA. The
 7   retroactive application of these new rules and requirements is arbitrary, capricious, and an abuse of
 8   discretion.
 9           106.     In order to effectuate the new rules and policies as expressed in the “precedent” decisions,
10   the INS planned in June 1998, as reflected in the memorandum of June 12, 1998 issued by Joseph R.
11   Greene, that the INS would be providing intensive supplemental training on these precedent decisions and
12   related matters to select adjudicators. After this training, “the Service [INS] will assemble a ‘tiger team’
13   to adjudicate the cases currently in the Headquarters-directed hold.” The “tiger team” was to operate from
14   the California Service Center.
15           107.     The Service Centers were further instructed to forward all I-526 and I-829 petitions in the
16   hold to the California Service Center for adjudication by the “tiger team.” “The ‘tiger team’ was to
17   adjudicate the approximately 680 initial cases being held, namely, newly filed Form I-526 petitions, Form
18   I-526 petitions approved by the Service but returned by the Department of State for revocation before visa
19   issuance, and related approved Form I-526 petitions with pending Form I-485 adjustment of status
20   applications.”
21           108.     On information and belief, Defendant has instituted a policy and practice of denying
22   immigrant investor petitions irrespective of and contrary to the law.
23           109.     The Defendant, through various agencies, including but not limited to the DOS and INS,
24   have also instituted an unlawful secret policy of singling out for adverse treatment all Plaintiff Investors and
25   Plaintiff Partnerships solely because their investments were made through programs established by
26   American Immigration Services (AIS). The Defendant established unlawful secret “special procedures” to
27   treat Plaintiffs’ cases as “unique” requiring, to the Plaintiffs’ detriment, special “handling” of their cases.
28



                                                         - 69 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   These secret procedures resulted in substantial delays in approving Plaintiffs’ cases and will result in denying
 2   the removal of their conditional residency. On information and belief, no other applications of immigrant
 3   investors which originated with other companies or were self-generated are subject to the “special
 4   procedures” that the Defendant is using and unlawfully used against Investor Plaintiffs and Partnership
 5   Plaintiffs.
 6            110.    In addition, and despite its legal obligation to do so, the INS has failed to provide Investor
 7   Plaintiffs and their dependents who have filed forms I-829 with receipts or other evidence of their status
 8   as conditional residents. The INS has failed to uniformly issue “official” receipts for dependents of
 9   immigrant investors filing I-829s. The INS has also failed to create a procedure for providing evidence of
10   status for immigrant investors, such as Investor Plaintiffs, who received I-829 filing receipts but whose
11   receipts expired while their I-829s are still pending.
12            111.    The failure to provide Investor Plaintiffs with proof of their status while their cases are
13   pending has also resulted in irreparable harm. The lack of evidence of lawful status causes Plaintiff Investors
14   to be unable to re-enter the United States after traveling abroad, to prove eligibility for lawful employment,
15   to prove eligibility for attending schools and colleges and causes hardship in obtaining numerous benefits
16   for which evidence of lawful status is required.
17            112.    As a result of the Defendant’s unlawful actions and affirmative misconduct, the Partnership
18   Plaintiffs have also suffered substantial and irreparable harm. The Plaintiff Partners have suffered a
19   substantial loss of revenue, have been unable to represent effectively the interests of the partners, and has
20   been unable to fulfill the goals of the partnership to make investments which will preserve or enhance
21   employment in the United States, generate revenues for the partners, and obtain lawful permanent residency
22   for the Investor Plaintiffs. The reputation of the partnership and its ability to continue to operate has been
23   destroyed by the Defendant’s unlawful actions.
24                                           V. CAUSES OF ACTION
25                    First Cause of Action: Violation of Administrative Procedure Act
26            113.    Plaintiffs hereby incorporate by reference paragraphs 1 through 112 of this First Amended
27   Complaint.
28



                                                         - 70 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           114.     The INS promulgated its new requirements, which are substantive rules of general
 2   applicability, without complying with the APA’s rule making procedures. The APA requires that notice
 3   of the proposed rule making be published in the Federal Register and that the agency provide notice to and
 4   an opportunity for comment by interested persons. Further, such rules may only be applied prospectively
 5   under the APA. Defendant, in violation of the APA, is applying or threatening to apply its new rules
 6   retroactively. The retroactive application of these new rules without notice and comment, has a substantial
 7   and direct deleterious effect on Investor Plaintiffs and Partnership Plaintiffs.
 8           115.     The Defendant also violated the rule making and notice and comment requirements of the
 9   Administrative Procedures Act by establishing an unlawful, illegal and secret special procedure for
10   determining Plaintiffs’ cases to their detriment without first publishing it in the Federal Register. On
11   information and belief, no other investors were or are subject to these secret “special procedures” and
12   “unique handling” of their cases, to their detriment, as are the Plaintiffs.
13                                 Second Cause of Action: Abuse of Discretion
14           116.     Plaintiffs hereby incorporate by reference paragraphs 1 through 112 of this First Amended
15   Complaint.
16           117.     The INS’s stated decision to adjudicate the Investor Plaintiffs’ I-829 petitions using
17   investment and investor qualification standards different than those used by INS to adjudicate the Investor
18   Plaintiffs’ I-526 petitions, even though both petitions are based on identical facts, is arbitrary, capricious,
19   and an abuse of discretion.
20           118.     The INS’s stated decision to apply its new rules and requirements retroactively is similarly
21   arbitrary, capricious, and an abuse of discretion.
22           119.     The INS’s decision to abruptly and radically depart from its own prior publicly announced
23   and published rules, requirements, and standards governing the Immigrant Investor Law without the
24   opportunity of prior notice and comment is likewise arbitrary, capricious, and an abuse of discretion.
25           120.     The Defendant’s establishment of an unlawful, illegal and secret special procedure for
26   determining Plaintiffs’ cases to their detriment is also arbitrary, capricious and an abuse of discretion. On
27
28



                                                          - 71 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   information and belief no other investors or partnerships were or are subject to the secret “special
 2   procedures” and “unique handling” of their cases, to their detriment, as are the Plaintiffs.
 3             121.     The Defendant’s failure to provide proper evidence of status to immigrant investors and
 4   their dependants with pending I-829s is also in violation of law and is likewise arbitrary, capricious and an
 5   abuse of discretion.
 6             122.     The Partnership and Investor Plaintiffs have reasonably relied on the INS’s prior rules,
 7   requirements, pronouncements, statements, and adjudications relating to the Immigrant Investor Law, and
 8   upon the INS’s approval of the I-526 petitions and the DOS’s issuance of visas in specific cases involving
 9   the Investor Plaintiffs where the investment programs contained one or more of the elements at issue.
10             123.     Plaintiffs have been and will continue to be irreparably harmed by the retroactive application
11   of the new rules and requirements.
12                        Third Cause of Action: Action Exceeding Statutory Authority
13             124.     Plaintiffs hereby incorporate by reference paragraphs 1 through 112 of this First Amended
14   Complaint.
15             125.     The Defendant’s abrupt and radical revision of the regulatory scheme governing the
16   Immigrant Investor Law and the Immigrant Investor Pilot Program was contrary to the law’s authorizing
17   legislation, and exceeded statutory jurisdiction or authority, in violation of the APA, 5 U.S.C. § 706(C)(2).
18             126.     The Defendant’s establishment of a secret “special procedure” to adjudicate Plaintiffs’
19   cases to their detriment is contrary to the law’s authorizing legislation and exceeded statutory jurisdiction
20   or authority in violation of the APA, 5 U.S.C. §706(C)(2).
21                    Fourth Cause of Action: Violation of Due Process and Equal Protection
22             127.     Plaintiffs hereby incorporate by reference paragraphs 1 through 112 of this First Amended
23   Complaint.
24             128.     The Defendant’s abrupt and radical revision of the regulatory scheme governing the
25   Immigrant Investor Law and the Immigrant Investor Pilot Program, and its retroactive application of the
26   new rules and requirements, violates Plaintiffs’ rights to due process under the Constitution of the United
27   States.
28



                                                           - 72 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           129.     In addition, the Defendant violated Plaintiffs’ due process rights in that the INS, as an agent
 2   of Defendant, failed to follow its own regulations, and allowed the AAO, which is not an independent and
 3   impartial adjudicative body, to adjudicate the “precedent” cases.
 4           130.     In addition the Defendant violated Plaintiffs’ due process and equal protection rights under
 5   the Fifth Amendment by establishing secret “special procedures” and “unique handling” of Plaintiffs’ cases
 6   to their detriment. These procedures were never disclosed to either Investor Plaintiffs or Partnership
 7   Plaintiffs and therefore Plaintiffs have never been given the opportunity to rebut or challenge the procedures
 8   that are used by the Defendant to determine their cases in violation of due process. On information and
 9   belief no other investors were or are subject to the secret “special procedures” and “unique handling” of
10   their cases, to their detriment, as are the Plaintiffs and therefore Defendant, in violation of equal protection
11   and due process of law, has singled out Plaintiffs for adverse treatment.
12
13                               Fifth Cause of Action: Uncompensated Taking
14           131.     Plaintiffs hereby incorporate by reference paragraphs 1 through 112 of this First Amended
15   Complaint.
16           132.     The Defendant’s abrupt and radical revision of the regulatory scheme governing the
17   Immigrant Investor Law and the Immigrant Investor Pilot Program, and its retroactive application of the
18   new rules and requirements, has resulted in an uncompensated taking of the economic worth of the
19   Partnership Plaintiffs, in violation of the Fifth Amendment of the United States Constitution.
20                                        Sixth Cause of Action: Estoppel
21           133.     Plaintiffs hereby incorporate by reference paragraphs 1 through 112 of this First Amended
22   Complaint.
23           134.     The Defendant knew or should have known that Plaintiffs would rely upon consistent and
24   long-standing INS practice, as expressly stated in policy memoranda, pronouncements, rulings, and written
25   replies to inquiries, concerning immigrant investor programs and that Plaintiffs would conform the structure
26   of their own investment programs upon this long-standing practice.
27
28



                                                         - 73 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           135.     The Defendant knew or should have known that Plaintiffs relied upon Defendant’s specific
 2   assurances that the investment programs at issue complied with the Immigrant Investor Law and Immigrant
 3   Investor Pilot Program, and that any potential changes to the INS’s rules or requirements issued pursuant
 4   to those laws would be applied prospectively.
 5           136.     The Defendant knew or should have known that Plaintiffs relied upon the Defendant’s
 6   assurances, specifically the prior approval of I-526 petitions with similar investment program elements, that
 7   such investment programs fully complied with the Immigrant Investor Law and Immigrant Investor Pilot
 8   Program.
 9           137.     Plaintiffs reasonably and justifiably relied on the consistent and long-standing practice of
10   the INS, specifically the approval of I-526 petitions and issuance of visas to immigrant investors
11   participating in similar or identical investment programs, to participate in and/or to structure the immigrant
12   investor programs at issue to comply with the Immigrant Investor Law and Immigrant Investor Pilot
13   Program.
14           138.     Plaintiffs reasonably and justifiably relied on the specific promises, representations and
15   assurances made by the Defendant to the Partnership Plaintiffs that the investment programs at issue
16   complied with the Immigrant Investor Law and Immigrant Investor Pilot Program and that petitions filed
17   on behalf of investors of these same investment programs would be approved, as, in fact, each and every
18   I-526 petition and adjustment of status or immigrant visa in this case was approved by Defendant.
19           139.     As a result of the Plaintiffs’ reasonable and justifiable reliance on the consistent and long-
20   standing position of the Defendant in its approval of I-526 petitions and adjustment of status or issuance
21   of immigrant visas, they sold their homes, uprooted their families, dramatically changed their lives, spent
22   hundreds of thousands of dollars and moved their families many thousands of miles.
23           140.     Defendant knew or should have known that the Partnership Plaintiffs entered into numerous
24   contracts and business agreements and relationships due to their reasonable reliance on past INS practice
25   and the specific assurances of Defendant. The Partnership Plaintiffs have spent considerable resources
26   establishing and operating the investment programs based on the Defendant’s prior long-standing practices
27   and assurances. Defendant has benefitted from the filing fees paid to it for immigration processing and from
28



                                                         - 74 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1   the investments which the Plaintiffs undertook in reliance upon Defendant’s prior rules, requirements,
 2   practices, interpretations, promises and assurances.
 3           141.       Defendant should be estopped from denying the I-829 petitions of the Investor Plaintiffs
 4   who have been approved for conditional residence status, have intended to comply with the investment
 5   program as set forth in their approved I-526 petitions, have obtained conditional lawful permanent resident
 6   status, and who are now or will in the future be seeking to remove the conditionality of that status.
 7           142.       Defendant should be estopped as its wrongful acts and affirmative misconduct have caused
 8   and will continue to cause a serious injustice to Plaintiffs and the imposition of liability will not damage the
 9   public interest.
10                        Seventh Cause of Action: Improper Retroactive Application
11           143.       Plaintiffs hereby incorporate by reference paragraphs 1 through 112 of this First Amended
12   Complaint.
13           144.       The Defendant, through its agents, has applied its new rules as expressed in Matter of
14   Izumii and its progeny and the General Counsel’s memorandum of December 19, 1997 retroactively.
15           145.       The Defendant’s retroactive application of its new rules, even if regarded as interpretations,
16   may not be applied retroactively to the detriment of the Plaintiff Investors and Partnership Plaintiffs.
17           146.       The retroactive application has in fact harmed Investor Plaintiffs and Partnership Plaintiffs
18   because they have detrimentally relied on the Defendant’s former criteria when investing in the United
19   States. By applying new criteria to all Plaintiffs which were not part of Investor Plaintiffs’ original
20   applications and Partnership Plaintiffs’ original programs, the Defendant has rendered it impossible for: (a)
21   Partnership Plaintiffs to continue the viability of the Partnerships and (b) Plaintiff Investors to achieve the
22   removal of their conditional residency even if they complied with all requirements that were expected of
23   them under the regulations regarding the removal of conditional residency.
24           147.       As a result of the retroactive application of the Defendant’s new rules, even if characterized
25   as interpretations, all Plaintiffs have been and will continue to be injured to their detriment.
26                                               ATTORNEY’S FEES
27
28



                                                           - 75 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1           148.     As a result of the Defendant’s unlawful actions Investor Plaintiffs and Partnership Plaintiffs
 2   were required to hire counsel and pay counsel reasonable attorney’s fees which may be recovered along
 3   with costs and expenses under the Equal Access to Justice Act.
 4
 5                                          VI. RELIEF REQUESTED
 6           WHEREFORE, Plaintiffs respectfully request that this Court enter judgment on their behalf and
 7   enter permanent injunctive and declaratory relief against the Defendant and all of its agencies and
 8   subordinates as follows:
 9           Declaring that the investment program elements and structure used and offered by the Partnership
10   Plaintiffs in existence prior to December 19, 1997, satisfy the requirements of the Immigrant Investor Law
11   and its regulations;
12           Declaring that the Defendant, through the INS, has the authority to remove immediately conditional
13   resident status and grant permanent resident status with respect to each of the Investor Plaintiffs and their
14   families based upon their participation in the investment programs of the Partnership Plaintiffs;
15           Declaring invalid and ordering the Defendant to withdraw and set aside the purported “precedent”
16   decisions of the AAO;
17           Declaring that the practices of Defendant challenged herein violate the Plaintiffs’ right to due
18   process and equal protection under the Constitution of the United States, the Administrative Procedure Act,
19   the INA and federal regulations;
20           Declaring that the practices of Defendant challenged herein constitute an uncompensated taking of
21   the Partnership Plaintiffs’ economic worth, in violation of the Fifth Amendment to the United States
22   Constitution;
23           Declaring that the practices of the Defendant constitute an improper retroactive application of the
24   law which has harmed all Plaintiffs;
25           Enjoining the Defendant from applying any of the criteria announced in the General Counsel
26   Memorandum of December 19, 1997 or in Matter of Izumii and the other “precedent” decisions following
27   Izumii to Investor Plaintiffs’ cases, including their I-829, I-526 and I-485 applications;
28



                                                         - 76 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1            Enjoining the Defendant from taking any action to deport, remove or deem inadmissible any
 2   Investor Plaintiffs from the United States pending a final determination in this case;
 3            Enjoining the Defendant from taking any action to deprive the Investor Plaintiffs of their right to be
 4   employed in the U.S. during the pendency of this case;
 5            Ordering Defendant and its agents, in a prompt and timely manner, to approve each and every I-
 6   829 petition to remove conditional status already filed or to be timely filed by Investor Plaintiffs;
 7            Ordering Defendant to cease using a secret or special adverse procedure for processing Plaintiffs’
 8   cases;
 9            Ordering Defendant and its agents to reinstate approvals concerning any I-526 petitions filed by
10   Investor Plaintiffs that have been revoked;
11            Ordering Defendant and its agents to immediately issue all necessary and appropriate
12   documentation to the Investor Plaintiffs and their dependents to evidence continuing lawful resident status
13   in the United States and the right to work and to freely enter the United States as lawful residents;
14            Ordering that any and all new rules and requirements regarding the EB-5 investor visa program be
15   promulgated only in accordance with the Administrative Procedure Act and that such new rules and
16   requirements may only be applied prospectively to I-526 petitions filed after the effective date of the new
17   rules and requirements;
18            Awarding Partnership Plaintiffs damages, in an amount to be determined;
19            Awarding Plaintiffs their attorney’s fees and costs; and
20            Granting such other relief as the Court may deem just, equitable and proper.
21   Dated: March 7, 2000
22
23                                              Respectfully submitted,
24
                                               _____________________________
25                                             Ira J. Kurzban, Esq.
                                               Nancy P. Horn, Esq.
26                                             KURZBAN, KURZBAN, WEINGER & TETZELI, P.A.
                                               2650 S.W. 27th Avenue, 2nd floor
27                                             Miami, Florida 33133
                                       Tel.: 305.444-0060 Fax.: 305.444.3503
28



                                                         - 77 -
     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action
 1
 2
 3                                              Daniel C. Levy (State Bar No.: 125876)
                                                6300 Wilshire Blvd., Suite 1020
 4                                              Los Angeles, CA 90048
                                                (323) 951-0000
 5
 6                                              Marc Van Der Hout, Esq.
                                                VAN DER HOUT & BRIGAGLIANO
 7                                              180 Sutter Street, Fifth Floor
                                                San Francisco, CA 94104
 8                                              Tel: 415.981.3000        Fax: 415 981 3003

 9                                              ATTORNEYS FOR PLAINTIFFS

10
11
12
13
14
15
16                                     CERTIFICATE OF SERVICE

17           I HEREBY CERTIFY that a true and correct copy of the foregoing First Amended Complaint was
     served via express mail to Shirley H.L.Wang, Assistant United States Attorney, Room 7516, Federal
18   Building, 300 N. Los Angeles Street, Los Angeles, California 90012 and to (Via Federal Express) M.
     Jocelyn Lopez Wright, Office of Immigration Litigation, Civil Division, U.S. Dept. of Justice, 1331
19   Pennsylvania Avenue, NW, Suite 7025 South, Washington, D.C. 20530 on this 7th day of March, 2000.

20
21                                              By___________________________
                                                   IRA J. KURZBAN, ESQ.
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     First Amended Complaint For Injunctive and Declaratory
     Relief and For Damages - Class Action