Zhang v. USCIS - "[T]he essential issue is whether lawfully-obtained, loan proceeds invested in the enterprise as cash are properly characterized as “cash” or as “indebtedness” pursuant to 8 C.F.R. § 204.6(e). The USCIS denied the petition mentioning that the loan from a family member does not qualify the Beneficiary for the EB-5 program.

The Court is of the opinion that USCIS’ interpretation of its regulation is plainly erroneous, denying plaintiffs’ petitions pursuant to that interpretation was arbitrary and capricious. Moreover, the Court finds that USCIS’ interpretation effectively amends a regulation without notice and comment, violating the Administrative Procedure Act.