Your SlideShare is downloading. ×
AAO Decisions for EB-5 Cases thus far Posted in 2013
Compiled by Joseph P. Whalen (September 1, 2013)
Link to Decision Res...
II. PROCEDURAL AND FACTUAL HISTORY
The petitioner filed the petition on March 31, 2011,
supported by the following types o...
was not an at-risk investment is "superfluous to the
regulatory requirements" and that the petitioner's
comprehensive busi...
Furthermore, the contracts the petitioner
provided postdate the petition filing date and
cannot be relied upon to establis...
identified the capital accounts the NCE would
utilize as follows:
4. CAPITAL ACCOUNTS. A shall be established
by the Compa...
bank accounts will be made available for job
creation. Funds infused into an NCE must be made
available for job creation t...
new commercial enterprise, the need for not fewer
than ten (10) qualifying employees will result,
including approximate da...
motion must be: "Accompanied by a statement
about whether or not the validity of the unfavorable
decision has been or is t...
reconsider is not a process by which a party may
submit, in essence, the same brief presented on
appeal and seek reconside...
manufacturer (OEM) automobile parts. The
petitioner purchased the building and assets of
the former owner and in a separat...
Florida Department of Economic Opportunity;
compiled financial statements; and an
organizational chart.
On April 2, 2012, ...
conversion business, located in Anaheim. California
Counsel indicated· in his initial memorandum in
support ofthe petition...
Entrepreneur, the petitioner's investment was
intended to fund a trading and real estate business.
The director determined...
County, which the petitioner has established is a
targeted employment area. Thus, while the
inconsistent addresses are an ...
actively in the process of investing the required
amount of capital, that the qualifying funds are
lawfully obtained funds...
In her July 18, 2012 decision, the director denied
the petition, finding that the petitioner failed to
establish that the ...
the investor's name as the petitioner; however, the
body of the statement named someone else as the
investor and [REDACTED...
(1) evidence that the required amount of capital had
been invested; (2) that this capital was placed at
risk within the NC...
immigration. Specifically, these cases relate to
whether the petitioner retained control over funds
she had placed in escr...
of Hsiung, 22 I&N Dec. 201, 204 n. 5 (Assoc.
Comm'r 1998). The petitioner has not documented
that her capital was committe...
with it.
APR302013_01B7203.pdf APPEAL DISMISSED [I-526]
The petitioner seeks classification as an
employment creation alie...
DECISIONS DATED
AFTER THE MAY 30,
2013, EB-5
ADJUDICATIONS
POLICY MEMO
TWO REGIONAL CENTER DENIALS ARE
OVERTURNED AND APPR...
B. General Proposal and General
Predictions
The applicant has not filed an exemplar or a
request for approval of an actual...
JUL192013_01K1610.pdf RC PROPOSAL DENIAL WITHDRAWN,
INITIAL DESIGNATION APPROVED ON
CERTIFICATION
DISCUSSION: The Director...
PM-602-0083 (May 30, 2013), provides:
The level of verifiable detail required for a
[regional center proposal] to be appro...
burden to establish eligibility for the immigration
benefit sought. See, e.g., section 291 of the Act, 8
U.S.C. § 1361. He...
Upcoming SlideShare
Loading in...5
×

AAO Decisions for EB-5 thus far posted in 2013

531

Published on

Two RC Decisions utilize, apply, and interpret principles from the May 30, 2013, EB-5 Adjudications Policy Memo. Check back for an Article about the application of the May 30 Policy Memo. I made a couple of small edits and replaced this document on 9/1/13 @ approx. 10:40am.

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
531
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
10
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Transcript of "AAO Decisions for EB-5 thus far posted in 2013"

  1. 1. AAO Decisions for EB-5 Cases thus far Posted in 2013 Compiled by Joseph P. Whalen (September 1, 2013) Link to Decision Results, Excerpts, & Commentary APR012013_01B7203.pdf Note that all the “B7” Decisions pre-date the May 30, 2013, EB-5 Adjudications Policy Memo and that the two “K1” Decisions post-date the May 30, 2013, EB-5 Adjudications Policy Memo. APPEAL DISMISSED [I-526] The petitioner seeks classification as an employment creation alien pursuant to section 203(b)(5) of the Immigration and Nationality Act (the Act), 8 U.S. C. § 1153(b)(5). The record indicates that the petition is based on an investment a raw materials trading business, in [REDACTED]. The petitioner established in [REDACTED] as a new commercial enterprise (NCE) through the creation of a new business. The petitioner previously indicated that the NCE might also engage in passive real estate investments. As the NCE ultimately abandoned that plan, the issue of whether those funds would be available for job creation is not before the AAO. The petitioner indicates within Part 2 of the Form I-526 that the business is located in a targeted employment area (TEA). Thus, the petitioner claims that the required amount of capital investment is $500,000. As discussed below, the AAO disagrees and finds that the required amount of capital in this case is $1,000,000. The director determined that the petitioner had failed to demonstrate an at-risk investment and inferred that the NCE was a grossly overcapitalized entity. The director also concluded that the petitioner failed to demonstrate that the NCE would meet the job creation requirements. For the reasons discussed below, the AAO dismisses the petitioner's appeal, concluding that he has not demonstrated that the invested capital was his own or that the business plan sufficiently demonstrates that the NCE will generate the requisite number of jobs for qualifying employees. * * * * *
  2. 2. II. PROCEDURAL AND FACTUAL HISTORY The petitioner filed the petition on March 31, 2011, supported by the following types of evidence: (1) statements from both the petitioner and his father-in-law; (2) documentation establishing the familial relationship between the petitioner and his father-in-law; (3) evidence regarding the lawful source of the invested funds to include evidence relating to the father-in-law's income, and documentation of the transfer of funds; (4) the NCE's corporate documents, business permit, lease agreement, business plan, escrow agreement relating to a permanent business location; and (5) evidence purporting to demonstrate that the place of business is located within a TEA. On December 7, 2011, the director issued· a request for evidence (RFE). Specifically, the director requested: (1) evidence that the petitioner's capital was an at-risk ·investment; and (2) a comprehensive business plan that demonstrates the NCE has the potential to meet the job creation requirements. The petitioner responded on January 23, 2012, with additional documentation. On February 27, 2012, the director denied the petition determining that the petitioner had failed to demonstrate that his investment was at-risk within the NCE and inferred that the estimated startup cost of $1,155,000 noted in the business plan did not seem necessary. The director implied that the NCE was a grossly overcapitalized entity. The director also concluded that the petitioner's business model noted in the business plan did not justify the need to hire four sales representatives or to fill the total claimed 11 full-time positions. On March 29, 2012, the petitioner filed an appeal with U.S. Citizenship and Immigration Services (USCIS). On appeal, counsel asserts that the director's findings that the petitioner's investment
  3. 3. was not an at-risk investment is "superfluous to the regulatory requirements" and that the petitioner's comprehensive business plan sufficiently demonstrated that the NCE would meet the regulatory job creation requirement. * * * * * The director determined that the petitioner had failed to demonstrate that his capital contributed to the NCE was an at-risk investment. The AAO affirms the director's ultimate conclusion based on the following reasoning. At the time of filing the petition, the petitioner had placed his funds into the NCE's bank accounts, but he had not engaged in any business activity. "Simply formulating an idea for future business activity without taking meaningful concrete action, is similarly insufficient for a petitioner to meet the at-risk requirement. Before it can be said that capital made available to a commercial enterprise has been placed at risk, a petitioner must present some evidence of the actual undertaking of business activity; otherwise, no assurance exists that the funds will in fact be used to carry out the business of the commercial enterprise." Matter of Ho, 22 I&N Dec. 206, 210 (Assoc. Comm'r 1998). Also at the time of filing the petition, the petitioner retained control over the NCE's business accounts as he possessed a 90 percent interest in the NCE. "A mere deposit into a corporate money-market account, such that the petitioner himself still exercises sole control over the funds, hardly qualifies as an active, at-risk investment." Matter of Ho, 22 I&N Dec. at 209-210. Although the petitioner had entered into a lease agreement in which the NCE would operate, this is insufficient to demonstrate his capital was at risk. Matter of Ho, 22 I&N Dec. at 210 (the de minimis action of signing a lease does not demonstrate that funds already transferred to the new commercial enterprise are at risk).
  4. 4. Furthermore, the contracts the petitioner provided postdate the petition filing date and cannot be relied upon to establish his eligibility. A petitioner must establish the elements for the approval of the petition at the time of filing the petition. 8 C.F.R §§ 103.2(b) (1), (12). A petition may not be approved if the petitioner was not qualified at the priority date, but expects to become eligible at a subsequent time. See Matter of Katigbak, 14 I&N Dec. 45, 49 (Reg'l Comm'r 1971) Within her decision, the director inferred that the NCE was overcapitalized by stating: [A]lthough it is not USCIS' prerogative to determine whether a company should lease or purchase its place of business, and the fact that [the NCE] chose to purchase one, it does not seem that the [$1,155,000] startup capital listed in the business plan was necessary. USCIS cannot conclude that a grossly overcapitalized company demonstrates a fully at-risk investment. Funds invested in a grossly overcapitalized company with insufficient capital expenditures forecasted are not at risk. See Al Humaid v. Roark,1 2010 WL 308750, *4 (N.D. Tex. Jan. 26, 2010). The court in the Al Humaid decision was concerned that the plaintiff was the sole director and shareholder, thereby exercising control over the allegedly invested funds. The court also expressed concern that the plaintiffs business documents allowed him to abolish the reserve accounts in which the invested funds rested, and that the business plan did not anticipate costs that would utilize the reserve funds. The NCE's Operating Agreement, Article III: Capital Contributions, signed on February 8, 2011, 1 See also the AAO Decision that was challenged in court: http://www.slideshare.net/BigJoe5/h-a-k-co-humaid-e-b-5-a-a-o-dismissal-apr202009-02b7203
  5. 5. identified the capital accounts the NCE would utilize as follows: 4. CAPITAL ACCOUNTS. A shall be established by the Company for each Member. The capital account shall consist of: a) The amount of the Member's Capital Contributions to the Company including the fair market value of any property so contributed to the Company or distributed by the Company to the Member. Additionally, item number five of the document titled, ''Unanimous Written Consent of the Members of [REDCATED]'' states: The following resolutions and actions are adopted relating to a depository of the funds of the corporation and relating to the authorization of Managers and Members of the Company to deal with the Company’s funds: ... (b) To open, keep and close general and special bank accounts, including general deposit accounts, payroll-accounts and working fund accounts, with any such depository . . . . The NCE's company register reflects that the petitioner owns a 90 percent controlling interest in the NCE, with [REDACTED] owning the remaining ten percent. These documents establish that the petitioner exercised control over the funds that he invested in the NCE. As of November 30, 2011, the NCE's two bank accounts with [REDACTED] contained $1,233,925. Although the business plan provided projected expenses covering a five-year period, the petitioner has not demonstrated the need for such capital on hand to cover operating costs over the next five years. The profits are projected to increase considerably each year that the NCE operates. Furthermore, the petitioner has not shown that all of the required funds in the two
  6. 6. bank accounts will be made available for job creation. Funds infused into an NCE must be made available for job creation to be considered capital placed at risk for the purpose of generating a return on the capital being placed at risk. Matter of Izummi, 22 I&N Dec. 169, 189 (Assoc. Comm'r 1998). The NCE is grossly overcapitalized given the absence of any explanation as to how the invested cash will be used for capital expenses or to cover operating losses early on. Thus, the petitioner did not place his funds in an at-risk investment for the purpose of generating a return on the capital being placed at risk. As noted within the below section relating to the NCE being located in a TEA, the required amount of capital to be invested in the NCE is $1,000,000. The petitioner must demonstrate that as of the petition filing date, he has placed the required amount of capital at risk for the purpose of generating a return on the capital placed at risk. 8 § C.F.R. 204.6(j)(2). The petitioner has failed to demonstrate that he has placed the required amount of capital at risk as he maintained control over the accounts in which his invested funds resided and the new commercial enterprise had engaged in only de minimis activity as of the date of filing the petition. As such, he cannot comply with the regulation at 8 C.F.R. § 204:6(j)(2). B. Employment Creation The regulation at 8 C.F.R. § 204.6(j)(4)(i) lists types of evidence that must accompany a petition for the petitioner to demonstrate that the ten qualifying employees have already been hired following the establishment of the NCE, or if the employment- creation requirement has not been satisfied prior to filing the petition, the petitioner must submit a "comprehensive business plan" which demonstrates that "due to the nature and projected size of the
  7. 7. new commercial enterprise, the need for not fewer than ten (10) qualifying employees will result, including approximate dates, within the next two years, and when such employees will be hired." To be considered comprehensive, a business plan must be sufficiently detailed to permit USCIS to reasonably conclude that the enterprise has the potential to meet the job creation requirements. Matter of Ho, 22 I&N Dec. at 206. After relying on a more detailed description of the elements of a comprehensive plan identified in Matter of Ho, 22 I&N Dec. at 212-213, the director concluded that the petitioner had not established that his business model ''justifies the need to hire four sales representatives let alone fill 11 full-time positions." It keeps getting juicier from here on out, it is a must read non-precedent Administrative Decision. APR012013_02B7203.pdf 3RD MOTION DISMISSED [I-526] DISCUSSION: The Director, California Service Center, denied the employment-based immigrant visa petition on November 17, 2009. The Administrative Appeals Office (AAO) dismissed the petitioner's appeal of that decision on July 8, 2010. The petitioner filed a subsequent motion on the AAO's decision, which it dismissed on January 10, 2012. The petitioner then filed a second motion, which the AAO dismissed on September 14, 2012 .2 The matter is now before the AAO on a third motion . The motion to reconsider will be dismissed. The motion to reopen will be dismissed. I. LAW The petitioner has been notified within the September 14, 2012 motion decision that any 2 This decision is not posted as of this writing.
  8. 8. motion must be: "Accompanied by a statement about whether or not the validity of the unfavorable decision has been or is the subject of any judicial proceeding and, if so, the court, nature, date, and status or result of the proceeding." 8 C.F.R. § 103.5(a)(1). Yet, even within this motion, the petitioner failed to include such a statement. The regulation at 8 C.F.R. § 103.5(a)(4) requires that "[a] motion that does not meet applicable requirements shall be dismissed. As such, the motion must be dismissed pursuant to the regulation at 8 C.F.R. § 103.5(a)(4) without regard to the claims contained within the motion. Notwithstanding this failure, the filing does not otherwise meet the requirements for either a motion to reconsider or a motion to reopen. A motion to reconsider must state the reasons for reconsideration and be supported by any pertinent precedent decisions to establish that the decision was based on an incorrect application of law or USCIS policy. 8 C.F .R. § 1 03.5(a)(3). The Board of Immigration Appeals (BIA) generally provides that a motion to reconsider asserts that at the time of the previous decision, an error was made. It questions the decision for alleged errors in appraising the facts and the law. The very nature of a motion to reconsider is that the original decision was defective in some regard. See Matter of Cerna, 20 I&N Dec. 399, 402 (BIA 1991). A motion to reconsider is based on the existing record and petitioners may not introduce new facts or new evidence relative to their arguments. Additionally, a motion to reconsider cannot be used to raise a legal argument that could have been raised earlier in the proceedings. See Matter of Medrano, 20 I&N Dec. 216, 220 (BIA 1990, 1991). Rather, the "additional legal arguments" that may be raised in a motion to reconsider should flow from new law or a de novo legal determination· reached in its decision that could not have been addressed by the party. Further, a motion to
  9. 9. reconsider is not a process by which a party may submit, in essence, the same brief presented on appeal and seek reconsideration by generally alleging error in the prior decision. Matter of O-S-G, 24 I&N Dec. 56, 58 (BIA 2006). Instead, the moving party must specify the factual and legal issues raised on appeal that were decided in error or overlooked in the initial decision or must show how a change in law materially affects the prior decision. Id. at 60. A motion to reopen proceedings, however, a fundamentally different motion. Matter of Cerna, 20 I&N Dec. at 402. (citing Sanchez v. INS, 707 F.2d 1523, 1529 (D.C.Cir. 1983); Chudshevid v. INS, 641 F.2d 780, 783 (9th Cir.l981)). It does not contest the correctness of (or simply request a reevaluation of) the prior decision on the previous factual record. Rather, a motion to reopen proceedings seeks to reopen proceedings so that new evidence can be presented and so that a new decision can be entered, normally after a further evidentiary hearing. Matter of Cerna, 20 I&N Dec. at 403. This Decision may serve as somewhat of a Primer on Motions to AAO and USCIS Directors across-the board. APR032013_01B7203.pdf APPEAL DISMISSED [I-526] The petitioner seeks classification· as an employment creation alien pursuant to section 203(b)(5) of the Immigration and Nationality Act (the Act), 8 U.S.C. § 1153(b)(5). The record indicated that the petition is based on an investment in an existing business that underwent a restructuring resulting in the creation of a new commercial enterprise (NCE), [REDACTED]. The petitioner amended the business strategy from being a salvage yard to providing wholesale and retail sales of recycled original equipment
  10. 10. manufacturer (OEM) automobile parts. The petitioner purchased the building and assets of the former owner and in a separate transaction, and from a separate party, purchased the land upon which the existing business resided. As the petitioner has not provided sufficient evidence to establish that the NCE is within a targeted employment area, the required amount of capital in this case is $1 million. For the reasons discussed below, including serious discrepancies among the tax documentation for assets and wages, the AAO will dismiss the appeal. II. PROCEDURAL AND FACTUAL HISTORY The petitioner filed the petition on January 20, 2011, supported by evidence relating to the following issues (1) the establishment of the NCE; (2) the restructuring of the business; (3) a November 12, 2010 letter from [REDACTED], Director of the Labor Market Statistics Center at Florida's Agency for Workforce Innovation (AWI) relating to the NCE 's location within a TEA; ( 4) the amount of capital the petitioner invested; (5) the lawful source of the invested funds; and (6) the.creation of jobs as required by the statute and regulation. On January 6, 2012, the director issued a notice of intent to deny (NOID). Specifically, the director noted the following deficiencies: (1) the petitioner checked the box indicating theNCE was not located in a TEA but counsel asserted that the NCE was situated within a TEA; (2) the petitioner appeared to have purchased the relevant assets with funds earned from the operation of theNCE, which is not a qualifying investment; (3) the record did not establish the requisite job creation; and (4) the petitioner had not established that he had invested $1 million of his own funds into theNCE. The petitioner responded on February 8, 2012, with additional documentation, including a January 23, 2012, letter from [REDACTED] Director of the Labor Market Statistics Center, now part of the
  11. 11. Florida Department of Economic Opportunity; compiled financial statements; and an organizational chart. On April 2, 2012, the director· denied the petition determining that the petitioner had failed to demonstrate: (1) that theNCE was located within a TEA; .(2) a qualifying at-risk investment of $1 . million: (3) that the funds invested in theNCE were obtained through lawful means; and (4) that the NCE would create at least ten full-time positions for qualifying employees. On April 30, 2012, the petitioner filed an appeal with U.S. Citizenship and Immigration Services (USCIS). On counsel asserts: (1) the petitioner has invested .capital in the NCE in excess of $1 million; (2) the director erred in her determination that theNCE was not located in a TEA; (3) the director misapplied the law by failing to recognize that the petitioner was in the process of investing the required capital; ( 4) the petitioner demonstrated that his invested. funds derived from a lawful source; and (5)" that the petitioner had demonstrated the requisite job creation For the reasons discussed below, including serious discrepancies on the tax documentation relating to assets and wages, the AAO finds that the petitioner has not overcome the director' s grounds for denial. The deep discussion and analysis from AAO while parsing the evidence is most enlightening, informative, somewhat tedious, and takes up the next approximately 11 pages. APR032013_02B7203.pdf APPEAL DISMISSED [I-526] The petitioner seekS classification as an employment creation alien pursuant to section 203(b)(5) of the Immigration and Nationality Act (the Act), 8 U.S.C. § 1153(b)(5). The petition is based on an investment in [REDACTED], a car
  12. 12. conversion business, located in Anaheim. California Counsel indicated· in his initial memorandum in support ofthe petition that "is involved in ... the business of exporting automobiles (mostly luxury cars) to China in accordance with customers' specialized requests for said automobiles." The petitioner indicated on part 2 of the petition that the business is not located in a targeted employment area Thus, the required amount of capital in this case is $1,000,000. In her July 12, 2012 decision, the director denied the petition on two grounds: (1) the petitioner failed to demonstrate that he has placed the required amount of capital at-risk for the purpose of generating a return on the capital; and (2) the petitioner failed to establish that the claimed investment has created or will create at least 10 full-time positions for qualifying employees. On appeal, the petitioner submits a statement and additional evidence. For the reasons discussed below, the petitioner has not overcome either of tlie director's two grounds for deniaL In addition, the petitioner has failed to document the lawful source of the required amount of capital. The appeal will therefore be dismissed. The highly detailed discussion presented from page 3 through page 12, while dizzying is highly informative, if you can follow it. APR152013_01B7203.pdf APPEAL DISMISSED [I-526] ...The record indicates that the petition is based on an investment in an existing business, [REDACTED] that is located in a targeted employment area for which the required amount of capital invested has been adjusted downward. [REDACTED] incorporated [REDACTED] on January 8, 2008. According to the petitioner's Form I-526, Immigrant Petition by Alien
  13. 13. Entrepreneur, the petitioner's investment was intended to fund a trading and real estate business. The director determined that the petitioner failed to demonstrate that she had placed the required amount of capital at risk in the new commercial enterprise, and the petitioner failed to establish that her investment in the new commercial enterprise would create at least 10 new full-time direct positions to qualifying employees. On appeal, the petitioner asserts that the director failed to fully consider all of the evidence under the totality of the circumstances. For the reasons discussed below, the petitioner has not overcome the director's grounds for denial. The highly redacted pages that follow (pages 3-11) shred the evidence that was initially submitted, submitted in response to the Director’s RFE, and on appeal. APR152013_02B7203.pdf APPEAL DISMISSED [I-526] The petitioner seeks classification as an employment creation alien pursuant to 203(b )(5) of the Immigration and Nationality Act (the Act), 8 U.S.C. § 1153(b)(5). The petition is based on an investment in [REDACTED], a business located in [REDACTED] San Joaquin County, California. According to its business plan, the "exclusive objective of this business is the export of California wines to China." The petitioner indicated on part 2 of the petition that the business was located in a targeted employment area. The record contains inconsistent claims regarding the location of the business. Specifically, the Form I-526 and Operating Agreement list an address on [REDACTED] the bank statements, invoices and business contracts reflect counsel's address; and the petitioner submitted a lease for yet a third address on [REDACTED] on appeal. Nevertheless, all three of the addresses are located within San Joaquin
  14. 14. County, which the petitioner has established is a targeted employment area. Thus, while the inconsistent addresses are an issue, the required amount of capital in this matter is $500,000. In her September 5, 2012 decision, the director denied the petition on the grounds that: (1) the petitioner failed to establish that he has placed the required amount of capital at risk for the purpose of generating a return; and (2) the petitioner failed to establish that the claimed investment has created or will create at least 10 full-time positions for qualifying employees. On appeal, the petitioner submits a brief from counsel and additional evidence. For the reasons discussed below, the petitioner has not overcome either of the director's grounds of denial. In addition; the petitioner has failed to document the lawful source of the required amount of capital. The appeal will therefore be dismissed. Pages 2 through 10 tell a complex tale which would make more sense if it were not so heavily redacted. I must question some of the redactions. In particular, the ones that make paragraphs or even entire pages unintelligible. Good Luck! APR162013_01B7203.pdf APPEAL DISMISSED [I-526] The petitioner seeks classification as an employment creation alien pursuant to section 203(b)(5) of the Immigration and Nationality Act (the Act), 8 U.S.C. § 1153(b)(5). The record indicates that the petition is based on an investment in a business, [REDACTED]. The required amount of capital in this case is $1,000,000. The new commercial enterprise (NCE), [REDACTED], is a funeral home, which assists in funeral planning and related services. The director determined that the petitioner had failed to demonstrate that he has invested or is
  15. 15. actively in the process of investing the required amount of capital, that the qualifying funds are lawfully obtained funds, and that he had created 10 full-time jobs. On appeal, counsel asserts that U.S. Citizenship and Immigration Services (USCIS) failed to apply the proper standard of proof in making its determination. Counsel maintains that USCIS erred by denying the petitioner's claim of creating 10 jobs for qualified employees. Counsel further asserts that USCIS erred in denying that the petitioner invested or is actively in the process of investing the required investment amount and that the investment capital came from lawfully acquired funds. In addition, counsel asserts that USCIS erroneously determined that the petitioner had not established that the business is a new entity rather than a previously existing business. For the reasons discussed below, the petitioner has not overcome the director's grounds for denial. AAO’s thorough dissection and intense discussion and analysis begins at the bottom of page 2 and doe not end until the bottom of page 12. While the redaction is again annoying, I’ve seen worse and I am sure you have too. APR162013_02B7203.pdf APPEAL DISMISSED [I-526] The petitioner seeks classification as an employment creation alien pursuant to section 203(b)(5) of the Immigration and Nationality Act (the Act), 8 U.S.C. § 1153(b)(5). The petition is based on an investment in [REDACTED] that purchased the [REDACTED] in Great Bend, Kansas, on August 23, 2011. The petitioner indicated on part 2 of the petition that the business. is not located in a targeted employment area Thus, the required amount of capital in this case is $1,000,000.
  16. 16. In her July 18, 2012 decision, the director denied the petition, finding that the petitioner failed to establish that the claimed equity investment has created or will create at least 10 full-time positions for qualifying employees. On APPEAL, the petitioner submits a four-page statement and additional documents. The petitioner noted on page 1 of the Form I-290B, Notice of Appeal or Motion, filed on August 10, 2012, that he would submit a brief and/or additional evidence to the AAO within 30 days. As of the date of this decision, the AAO has received nothing further. The appeal therefore, will be adjudicated based on evidence currently in the record, including the materials the petitioner submitted on appeal. For the reasons discussed below, the AAO finds that the petitioner has not overcome the director's ground for denial. In addition, the petitioner has failed to document the lawful source of the claimed equity investment or that the job-creating entity is "new." The appeal will therefore be dismissed. AAO’s dissection, discussion, and analysis begins on the bottom of page 2 and continued through the middle of page 11. This one also has some ridiculously redacted portions which might give you eye strain or a headache. APR172013_01B7203.pdf Related Case found here. That case was discussed in my May EB-5 Newsletter found here. APPEAL DISMISSED [I-526] [This investor is filing through a Project from Chicagoland Foreign Investment Group (CFIG) Regional Center.] The record contains conflicting information relating to the·name of the petitioner and the name of the new commercial enterprise (NCE). The Form I-526 reflected that the petitioner's name is REDACTED] and that theNCE is the [REDACTED]. The initial filing statement heading also indicated
  17. 17. the investor's name as the petitioner; however, the body of the statement named someone else as the investor and [REDACTED] as the NCE. The initial filing statement repeatedly referred to [REDACTED] but failed to mention [REDACTED] at any point in the statement. Although the petitioner named on the Form I-526 was mentioned in the heading, none of the claims within the body of this statement will be considered to apply to the present petition based on the fact that the body of the initial filing statement pertained to an alien that is not the petitioner. The exhibit list submitted with the petition, however, did relate to the petitioner. Despite references to [REDACTED], theNCE is [REDACTED], the entity listed on the petition and the ultimate recipient of the petitioner's funds. The petitioner lists counsel's address as the address of the NCE. [REDACTED] proposes to loan all invested funds to [REDACTED], which, according to page five of the Private Placement Memorandum, ''has been formed to renovate a historic building in the City of Aurora Illinois and convert it into memory care assisted living units for senior citizens with Alzheimer, dementia, and related illnesses." As the petitioner has demonstrated that, at the time she filed the petition, theNCE was within a targeted employment area, the required amount of capital in this case is $500,000. * * * * * II. PROCEDURAL AND FACTUAL HISTORY The petitioner filed the petition on June 21, 2010, supported bv the following types of evidence: (1) a Subscription Agreement and an Escrow Agreement relating to [REDACTED] (2) an Advisory Agreement and an Operating Agreement relating to [REDACTED]; (3) a TEA letter relating to the location of the assisted living facility; (4) documents relating to the lawful source of the petitioner's invested capital; and (5) identity documents. On March 16, 2011, the director issued a request for evidence (RFE). Specifically, the director requested:
  18. 18. (1) evidence that the required amount of capital had been invested; (2) that this capital was placed at risk within the NCE; (3) evidence of ownership of theNCE; and (4) that the petitioner's invested capital was obtained through lawful means. The petitioner responded on June 8, 2011, with additional documentation to include evidence of monetary transactions that occurred after the petition's filing date and new escrow and subscription agreements pertaining to [REDACTED]. On August 23, 2011, the director denied the petition determining that the petitioner had failed to demonstrate that the required amount of capital was invested in or that it was placed at risk within the NCE, and that she had failed to demonstrate the lawful source of the invested funds pertaining to the regulations of the Office of Foreign Assets Control (OFAC). The petitioner has established that her investment does not violate any executive orders or OFAC regulations relating to sanctions against Iran. On September 22, 2011, the petitioner filed an appeal with U.S. Citizenship and Immigration Services (USCIS). On appeal, counsel asserted: (1) the petitioner demonstrated that she was actively in the process of investing the requisite funds and that the required capital had. been committed to the NCE; (2) the petitioner had established that the capital was at risk within theNCE; and (3) the petitioner had demonstrated that.her invested capital was obtained through lawful means. * * * * * It is clear from the above regulatory language that a direct nexus must be present when considering the capital and the NCE. Therefore, counsel's position is not persuasive that the petitioner had committed her investment capital in accordance with the regulation at 8 C.F.R. § 204.6(j)(2). Counsel also refers to judicial opinions that relate to other areas of law not pertaining to
  19. 19. immigration. Specifically, these cases relate to whether the petitioner retained control over funds she had placed in escrow rather than to which of the two funds they were committed. Significantly, while CFIG may be affiliated with both [REDACTED] and [REDACTED] and a party to both escrow agreements, the escrow agreement provides that the funds would be released to [REDACTED] in the event of approval and the petitioner signed a subscription agreement for [REDACTED]. None of the cases counsel cites address this particular issue. It remains that the relevant precedent, Matter of Izummi, 22 I&N Dec. at 179, and the regulation at 8 § 204.6(j)(2) require that the funds be committed to the job creating entity. In response to the director's RFE, the petitioner documented the transfer of$100,000 from the [REDACTED] escrow account to the [REDACTED] escrow account on May 17, 2011. This transaction occurred after the petition filing date and is not in compliance with the regulation at 8 C.F.R. § 204.6 (j)(2), which requires that the petitioner demonstrate the full required amount of capital either already be in the NCE or be committed to it. In order for any claimed investments to be permissible, the petitioner must demonstrate that any capital invested after the priority date was committed to the NCE as of that date. 8 C.F.R. § 204.6(j)(2). A petitioner must establish eligibility at the time of filing the/ petition; a petition cannot be approved at a future date after the petitioner becomes eligible under a new set of facts. See 8 C.F.R. § 103.2(b)(12); Matter of Katigbak, 14 I&N Dec. 45, 49 (Reg'l Comm'r 1971); see Matter of Izummi, 22 I&N Dec. at 175. The "mere intent to invest ... will not suffice to show that the petitioner is actively in the process of investing." 8 C.F.R. § 204.60)(2). "An actual commitment does not exist if the petitioner's assets are not at-risk. See 8 C.F.R. § 204.6(j)(2)." Matter
  20. 20. of Hsiung, 22 I&N Dec. 201, 204 n. 5 (Assoc. Comm'r 1998). The petitioner has not documented that her capital was committed to or secured for the investment in the NCE as of the date of filing the petition. The entirety of AAO’s dissection, discussion and analysis of the evidence and law which is merely sampled here begins on page 3 and continues through page 7. APR222013_01B7203.pdf APPEAL DISMISSED [I-526] ...The record indicates that the petition is based on an investment in. a new commercial enterprise (NCE), [REDACTED]. As the area in which the NCE is principally doing business was designated as a targeted employment area (TEA) at the time of investment, the required amount of capital in this case is $500,000. According to the business plan, the NCE engages in purchasing and refurbishing used printing machinery within the United States, subsequently selling the machinery overseas. The director determined that the petitioner had failed to demonstrate that the NCE would create the minimum number of qualifying employees and that the business model did not support the need for the full-time services often employees. · On appeal, counsel asserted that the submitted evidence sufficiently established the NCE would create the requisite number of jobs and that the director violated the regulations when she relied on derogatory information, within the decision, to which the petitioner did not have an opportunity to respond. For the reasons discussed below, the AAO finds that the petitioner has not demonstrated eligibility for the classification sought, both for reasons identified by the director as well as for additional insufficiencies. AAO’s entire dissection, discussion, and analysis takes up about 8 pages. Have fun
  21. 21. with it. APR302013_01B7203.pdf APPEAL DISMISSED [I-526] The petitioner seeks classification as an employment creation alien pursuant to section 203(b)(5) of the Immigration· and Nationality Act (the Act), 8 U.S.C. § 1153(b)(5). The petition is based on an investment in [REDACTED], a restaurant located in San Gabriel, California. FN1 The petitioner indicated on part 2 of the petition that the business is not located in a targeted employment area. Thus, the required amount of equity investment is $1,000,000. In her August 17, 2012 decision, the director denied the petition, finding that the petitioner failed to show that he placed the full amount of the claimed equity investment at risk for the purpose of generating a return. For the reasons discussed below, the petitioner has not overcome the director's ground for denial. Moreover, the petitioner has failed to demonstrate that his claimed investment has created or will create at least 10 full-time positions for qualified employees, or demonstrate the lawful source of his funds. __________ FN1 On appeal, the petitioner submitted a Certificate of Amendment of Articles of Incorporation, filed with California's Office of the Secretary of State on August 21,1012, changing the name of the corporation from [REDACTED] to [REDACTED]. For clarity purposes, the AAO will refer to the new commercial enterprise as [REDACTED], in this decision, as the name change occurred after the filing of the petition on March 14, 2012, and the of the director's decision on August 17, 2012. ___________ Cuba Gooding said “Show me the money!” AAO says “Show us the source and pathway of the money!” And they really mean it! You can’t get away with anything that is not 100% above board. Those folks are not afraid to contact the FBI, OFAC, SEC, or various other Federal or State agencies and blow you in!
  22. 22. DECISIONS DATED AFTER THE MAY 30, 2013, EB-5 ADJUDICATIONS POLICY MEMO TWO REGIONAL CENTER DENIALS ARE OVERTURNED AND APPROVED BASED ON APPLICATION OF THE ACKNOWLEDGED CHANGE IN POLICY, CITING TO THE MAY 30, 2013 POLICY MEMO. JUN122013_01K1610.pdf RC AMENDMENT DENIAL WITHDRAWN EXPANSION AMENDMENT APPROVED III. ANALYSIS For the reasons set forth below, the applicant has provided sufficient evidence of a general proposal based on general predictions to establish that the amendment request is approvable. A. Requirement to File Regional Center Amendments The regulation at 8 C.F.R. § 204.6(m)(3) provides the evidentiary requirements for regional centers wishing to participate in the Immigrant Investor Pilot Program. Page 23 of EB-5 Adjudications Policy, PM-602-0083 (May 30, 2013), discusses amendments to regional center designations and states: Such formal amendments to the regional center designation, however, are not required when a regional center changes its industries of focus, its geographic boundaries, its business plans, or its economic methodologies. A regional center may elect to pursue an amendment if it seeks certainty in advance that such changes will be permissible to USCIS before they are adjudicated at the I-526 stage, but the regional center is not required to do so. Thus, the applicant was not required to file the instant amendment request. While not required, the applicant has, in fact, filed the request. Therefore, the merits of that request are discussed below.
  23. 23. B. General Proposal and General Predictions The applicant has not filed an exemplar or a request for approval of an actual investment project. Instead, the applicant has filed an amendment request for hypothetical projects, such as a coffee company that desires to branch out into the home and office delivery business. Page 14 of EB-5 Adjudications Policy, PM-602-0083 (May 30, 2013), provides: The level of verifiable detail required for a [regional center proposal] to be approved and provided deference may vary depending on the nature of the [regional center proposal]. If the [regional center proposal] projects are "hypothetical" projects, general proposals and general predictions may be sufficient to determine that the proposed regional center will more likely than not promote economic growth, improved regional productivity, job creation, and increased domestic capital investment. Determinations based on hypothetical projects, however, will not receive deference and the actual projects on which the Form I-526 petitions will be based will receive de novo review during the subsequent filing (e.g., an amended [regional center proposal] including the actual project details or the first Form I-526 petition filed by an investor under the regional center project). The record contains a general proposal based on Census Bureau and other data and general predictions concerning the kinds of commercial enterprises that will receive capital, the direct and indirect jobs that will be created as a result of such capital investments based on RIMS II data and multipliers, and other positive economic effects. Thus, the AAO withdraws the director's concerns.
  24. 24. JUL192013_01K1610.pdf RC PROPOSAL DENIAL WITHDRAWN, INITIAL DESIGNATION APPROVED ON CERTIFICATION DISCUSSION: The Director, California Service Center, denied the proposal for designation as a regional center on June 15, 2011. The matter is now before the Administrative Appeals Office (AAO) on certification pursuant to 8 C.F.R. § 103.4. The director's decision will be withdrawn and the proposal for designation as a regional center will be approved. The matter is returned to the director for issuance of a formal letter to the applicant consistent with this decision. * * * * * The director determined that the applicant had not provided a business plan with verifiable detail regarding how the proposal will create sufficient jobs. The director denied the proposal accordingly and certified the matter to the AAO. The director afforded the applicant 30 days to supplement the record. The applicant's response is now part of the record. On August 17, 2012, prior counsel withdrew as counsel. For the reasons discussed below, the AAO will withdraw the director's determination. * * * * * III. ANALYSIS The applicant seeks regional center designation based solely on a hypothetical project to establish [REDACTED] funds that will invest in the [REDACTED] and distribution of unidentified [REDACTED]. The applicant concedes on certification, through prior counsel, that the regional center proposal is not based on an actual project and does not include an exemplar I-526 petition. Page 14 of EB-5 Adjudications Policy,
  25. 25. PM-602-0083 (May 30, 2013), provides: The level of verifiable detail required for a [regional center proposal] to be approved and provided deference may vary depending on the nature of the [regional center proposal]. If the [regional center proposal] projects are "hypothetical" projects, general proposals and general predictions may be sufficient to determine that the proposed regional center will more likely than not promote economic growth, improved regional productivity, job creation, and increased domestic capital investment. The record contains a general proposal based on general predictions concerning the kinds of commercial enterprises that will receive capital, the jobs that will be created as a result of such capital investments based on RIMS II data and multipliers, and other positive economic effects. As the record contains a general proposal, the applicant is not required to submit letters of intent or commitment from the prospective sources of matching funds for regional center designation. 1 Thus, the AAO withdraws the director's determination. While the proposal for designation as a regional center is approved, it is based on hypothetical projects. Determinations based on hypothetical projects will not receive deference, and the actual projects on which the Form I-526 petitions will be based will receive de novo review in a subsequent filing (e.g., an amended Form I -924 application including the actual project details or the first Form I-526 petition filed by an investor under the regional center project). See EB-5 Adjudications Policy, PM-602-0083, page 14 (May 30, 2013). IV. CONCLUSION In application proceedings, it is the applicant's
  26. 26. burden to establish eligibility for the immigration benefit sought. See, e.g., section 291 of the Act, 8 U.S.C. § 1361. Here, that burden has been met. Accordingly, the decision of the director denying the proposal for designation as a regional center will be withdrawn and the proposal approved. The matter is returned to the director for issuance of a formal approval letter consistent with this decision. ORDER: The director's decision dated June 15, 2011 is withdrawn. The applicant's proposal for designation as a regional center is approved. Keep an eye out for an article analyzing those two Regional Center Decisions posted after the issuance of the May 30, 2013, EB-5 Adjudications Policy Memo. e-mail me at: joseph.whalen774@gmail.com or call 716-604-4233

×