AAO decisions for EB5 thus far posted in 2013 2nd REV

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I added the January decisions and few comments, links, etc...

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AAO decisions for EB5 thus far posted in 2013 2nd REV

  1. 1. Page 1 of 48 AAO Decisions for EB-5 Cases thus far Posted in 2013 Compiled by Joseph P. Whalen (September 1, 2013) Revised September 14, 2013 to add the March decisions. Revised September 18, 2013 to add January decisions. Link to Decision Results, Excerpts, & Commentary JAN072013_01B7203.pdf Sorry that it took me a few days to get around to updating this list. I was busy doing other things. Appeal Dismissed [I-526] Affiliated w/Vermont Agency of Commerce and Community Development (V ACCD) …U.S. Citizenship and Immigration Services (USCIS) last approved an amendment to VACCD's designation as a regional center on June 11, 2007. The petitioner invested in the regional center through the [**REDACTED**] is the new commercial enterprise (NCE), which is located in a targeted employment area for which the required amount of capital invested has been adjusted downward. Thus, the required amount of capital in this case is $500,000. The director determined that the petitioner had failed to demonstrate: 1) the lawful source of the invested funds based on salaries from his employment with [******REDACTED*******] and (2) that he invested the required amount of capital considering both the $500,000 the petitioner claims he invested in the NCE and the $50,000 administration fee. On appeal, counsel asserts that: (1) the invested capital was obtained .through lawful means; (2) the required amount of capital was invested in a regional center; and (3) the director's decision was based on issues that were not discussed in the RFE.
  2. 2. Page 2 of 48 For the reasons discussed below, the petitioner has not demonstrated that he has invested, or is actively in the process of investing capital obtained through lawful means. The petitioner has demonstrated that the income from Induservices is not relevant to the invested capital. * * * * * Initially and in response to the RFE, the petitioner claimed the following contributions of cash in the NCE as both capital and as administrative fees: • $40,000 on May 25, 2010; and • $500,000 on May 25, 2010. As evidence of the above investments, the petitioner provided: (1) [REDACTED] bank statements covering several years, which include the two May 25, 2010 transfers to the NCE; (2) a wire transfer order dated May 24, 2010, directing [REDACTED] to transfer $500,000 to the NCE; and (3) a letter dated May 26, 2010, confirming that the NCE received the funds. At the time of filing the petition, the petitioner provided the Offering Agreement dated March 2008, the Limited Partnership Agreement dated March 2008, and the Subscription Agreement which the petitioner signed on May 18, 2010. These documents all make it clear that each investor must contribute the minimum investment amount of $500,000 and $50,000 for additional fees. The petitioner must demonstrate that as of the petition filing date,
  3. 3. Page 3 of 48 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 director concluded that the petitioner failed to demonstrate that he had provided the required amount of capital to the NCE in addition to the full $50,000 administrative fee. On appeal, the petitioner's new counsel identifies the initial payment of$10,000 executed on March 31, 2010, and the account from which the petitioner made his initial contribution. As such, the petitioner has established that he transferred the full amount of the investment and required fees to the regional center prior to the filing date of the petition. * * * * * This heavily redacted decision is worth wading through just to see some mistakes to avoid. JAN092013_01B7203.pdf Appeal Rejected as Improperly Filed No new G-28 submitted on appeal. Withdrawal seen as irrelevant because Counsel was not authorized to either file or withdraw. I-290B REJECTED. JAN112013_01B7203.pdf Appeal Dismissed and Administrative Finding of Material Misrepresentation In her October 19, 2011 decision, the director determined that the petitioner has failed to demonstrate that he has placed in [REDACTED], the required amount of capital at risk for the purpose of generating a return
  4. 4. Page 4 of 48 on the capital, as required under the regulation at 8 C.F.R. § 204.6(j)(2). The director also concluded that the petitioner has not documented the lawful source of the required amount of capital. On appeal, counsel asserts that the director erred. On October 15, 2012, the AAO issued a notice of intent to find willful material misrepresentation. Specifically, the AAO pointed out derogatory evidence in the record relating to [REDACTED]’s Federal Employer Identification Number (FEIN), the amount of the petitioner's claimed capital contribution to [REDACTED] and the petitioner's alleged status as a member or owner of [REDACTED]. The AAO afforded the petitioner 15 days to file a response to the derogatory evidence. As of the day of this decision, no response has been forthcoming. As such, the AAO will adjudicate the appeal based on the documents and evidence in the record. For the reasons discussed below, the AAO finds that the petitioner has ·made willful material misrepresentation to seek to procure admission into the United States or other benefit provided under the Act. The AAO further affirms the director's findings, concluding that the petitioner has not overcome the director's grounds for denial. As an additional issue, the petitioner has not documented that his "investment" has created or will create the requisite number of new and full-time jobs. An application or petition that fails to comply with the technical requirements of the law may be denied by the AAO even if the Service Center does not identify all of the grounds for denial in the
  5. 5. Page 5 of 48 initial decision. See Spencer Enterprises, Inc. v. United States, 229 F. Supp. 2d 102.5, 1043 (E.D. Cal. 2001), aff'd, 345 F.3d 683 (9th Cir. 2003); see also Soltane v. Dep't of Justice, 381 F.3d 143, 145 (3d Cir. 2004) (noting that the AAO conducts appellate review on a de novo basis). JAN162013_01B7203.pdf Appeal Rejected as Improperly Filed Affiliated w/ Metropolitan Milwaukee Association of Commerce Regional Center (MMAC) …. USCIS designated the Metropolitan Milwaukee Association of Commerce Regional Center as a regional center on May 1, 2007. The petitioner's investment is through an affiliated limited partnership, [REDACTED] located in a targeted employment area for which the required amount of capital invested has been adjusted downward. The petitioner's investment was intended to develop, construct, and operate a hotel. The director determined that the petitioner had failed to demonstrate the lawful source of his invested funds. On appeal, counsel asserts the lawful source of funds was previously demonstrated through the submitted evidence. Whether or not the petitioner could have proven the lawful source of funds is not know because the reason for rejection was failure to file a new G-28 (a technicality). This case does however; illustrate the fact that the Regional Center needs to protect itself from investors just as much as investors need to protect
  6. 6. Page 6 of 48 themselves. DUE DILIGENCE goes BOTH ways! JAN222013_01B7203.pdf Appeal Rejected as Improperly Filed Yep, you guessed it, another failure to file a new G-28. This time AAO faxed a request to the attorney who then failed to respond. JAN222013_02B7203.pdf Appeal Rejected as Improperly Filed No new G-28 submitted on appeal. Withdrawal seen as irrelevant because Counsel was not authorized to either file or withdraw. REJECTED. Due to redaction, it is unknown if this case was mishandled by the same attorney as the case immediately above or January 9th (#1). JAN222013_03B7203.pdf Appeal Dismissed and Administrative Finding of Material Misrepresentation The petitioner seeks classification as an employment creation 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], that is not located in a targeted employment area or an upward adjustment area. Thus, the required amount of capital in this case is $1,000,000. The petitioner's investment was intended to fund a financial, computer, and administrative business.
  7. 7. Page 7 of 48 The director determined that the petitioner had failed to demonstrate that the petitioner had invested the requisite amount of capital in the enterprise. On appeal, counsel asserts that the petitioner has invested and is in the process of investing the required amount of capital. On November 16, 2012, in accordance with the regulation at 8 C.F.R. § 103.2(b)(16)(i), the AAO issued a notice advis.ing the petitioner of derogatory information regarding documentation that he submitted in support of the petition and misrepresentations he made on his petition. Specifically, the petitioner misrepresented his answers on Form 1-526, Immigrant Petition by Alien Entrepreneur, when he claimed that on January 1, 2007, he initially invested $10,000 in the new commercial enterprise; however the supporting documentation that purports to indicate this deposit occurred after January 1, 2007. Moreover, the petitioner submitted different and conflicting income tax returns and documentation for the same years. Finally, the petitioner claimed that the commercial enterprise's address is "[REDACTED], Washington, DC [REDACTED] Washington, DC however the AAO indicated that another business, [REDACTED], is operating at the same location, and the petitioner failed to establish that the address is viable for two separate entities to operate a business at this single location. Pursuant to the regulation at 8 C.F.R. § 103.2(b) (16)(i), the petitioner was afforded 15
  8. 8. Page 8 of 48 days in which to respond to the AAO's notice. On December 10, 2012, the AAO received a letter from the petitioner requesting until December 31, 2012, to respond to the AAO' s notice. The AAO granted the petitioner's request and informed the petitioner that no further extensions would be granted. However, as of the date of this decision, the petitioner failed to respond to the AAO's notice. The regulation at 8 C.F.R. § 103.2(b)(13)(i) states that "[i]f the petitioner or applicant fails to respond to a request for evidence or to a notice of intent to deny by the required date, the application or petition may be summarily denied as abandoned, denied based on the record, or denied for both reasons." By filing the instant petition and submitting the aforementioned falsified materials, the petitioner has sought to procure a benefit provided under the Act through fraud and misrepresentation of material facts. Because the petitioner has failed to provide independent and objective evidence to overcome, fully and persuasively, the AAO's findings that he submitted fraudulent documentation and misrepresented his answers to the questions on the petition, the AAO affirms its finding of misrepresentation. This finding of misrepresentation shall be considered in any future proceeding where admissibility is an issue. Regarding the instant petition, the petitioner's failure to submit independent and objective evidence to overcome the derogatory information seriously compromises the credibility of the petitioner and the
  9. 9. Page 9 of 48 documentation he submitted in support of his petition. It is incumbent upon the petitioner to resolve any inconsistencies in the record by independent, objective evidence. Any attempt to explain or reconcile such inconsistencies will not suffice unless the petitioner submits competent objective evidence pointing to where the truth lies. Matter of Ho; 19 I&N Dec. 582, 591-592 (BIA 1988). Doubt cast on any aspect of the petitioner's proof may, of course, lead to a reevaluation of the reliability and sufficiency of the remaining evidence offered in support of the visa petition. Id. If USCIS fails to believe that a fact stated in the petition is true, USCIS may reject that fact. Section 204(b) of the Act, 8 U.S.C. § 1154(b); see also Anetekhai v. INS, 876 F.2d 1218, 1220 (5th Cit 1989); Lu-Ann Bakery Shop, Inc. v. Nelson, 705 F. Supp. 7, 10 (D.D.C. 1988); Systronics Corp. v: INS, 153 F. Supp. 2d 7, 15 (D.D.C. 2001). The remaining documentation and the director's bases of denial will be discussed below. For the reasons discussed below, the AAO will uphold the director's decision. JAN302013_01B7203.pdf Appeal Dismissed Affiliated w/UNNAMED Regional Center In her May 3, 2012 decision, the director denied the petition on the grounds that the petitioner (1) has failed to document the lawful source of the required amount of capital; and (2) has failed to demonstrate that he has placed the required amount of capital at risk for the purpose of generating a return on the capital. On appeal, the petitioner
  10. 10. Page 10 of 48 submits a three-page letter from counsel and additional evidence. For the reasons discussed below, the petitioner has not overcome the director's finding that he has failed to document the lawful source of the required amount of capital. The appeal is therefore dismissed. Once again, it boils down to the alien’s ability to carry his/her small part to demonstrate the source and path of his/her lawful funds. This is something that the burgeoning ranks of Regional Centers have gotten very lazy about. MAR052013_01B7203.pdf The March decisions are the new addition to this document. Pages 1-7. Combined Motions Dismissed [I-526] This one is highly technical on summary dismissals of appeals as well as the proper filing of Motions. MAR052013_02B7203.pdf This portion of the director’s and AAO’s decisions speaks to the heavy burden on the Business Plan and Economic analysis at the I-526 stage. Regional Centers that skip filing and Exemplar or Appeal Dismissed [I-526] 1.The director determined that the petitioner has failed to demonstrate that: a. the requisite amount of capital i. has been made available, ii. committed, and iii. placed at risk or iv. is in the process of being invested; b. the petitioner invested, or i. is in the process of investing, ii. capital obtained through
  11. 11. Page 11 of 48 Dummy I-526 as an I- 924 Amendment, run a terrible risk of delay by using the “guinea pig” approach. If the first I- 526 is not up to par, it cannot be corrected because it would give a priority date to an undeserving petitioner. The I-924 does not have that problem. Since it has no priority date at issue so it can be perfected after filing. lawful means. 2. The director also concluded that the petitioner has not established that: a. 10 full time jobs for qualifying employees have been created by his investment, or b. that he will create not fewer than 10 full-time positions within a two-year period. “On appeal, counsel asserts that the petitioner has made a total overall investment in excess of $1,000,000 and that the funds were from lawfully obtained sources. Counsel also maintains that the petitioner provided sufficient documentation to show that at least 10 full-time positions resulted from the investment in the NCE. Finally, counsel states that U.S. Citizenship and Immigration Services (USCIS) failed to identify the issues upon which the director based his denial in the prior Notice of Intent to Deny. For the reasons discussed below, the petitioner has not overcome the director's grounds for denial. * * * * * ….. There is nothing in the statute or the regulations that requires USCIS to issue a NOID or provide a detailed account of every evidentiary insufficiency in the record through the use of a NOID prior to denying the visa petition. The director based the decision upon the entirety of the record and the underlying issues identified in the decision correspond with the petitioner's failure to meet a regulatory provision. Therefore, the regulations themselves provide notice of the requirements that ultimately became the
  12. 12. Page 12 of 48 underlying bases upon which the director denied the petition: the amount of capital, source of funds, and job creation. The director provided notice through the RFE that the documentation that the petitioner submitted for the amount of capital, source of funds, and job creation were insufficient to meet the plain language requirements of the regulation. Critically, the director's ultimate findings regarding the previously mentioned areas can be supported by the record. On appeal, counsel notes that the director indicated based on Florida corporate filings, the business name for the retail division of the NCE lapsed for 2008 and most of 2009. Because this information was not part of the record of proceedings, the director should have included it in the NOID. 8 C.F.R. § 103.2(b) (16)(ii). The petitioner has been provided ample notice that there was insufficient documentation regarding regulatory requirements and the director's factual findings that support the denial can be found in the record. Accordingly, USCIS need not rely upon the extra-record information referenced in the director's final decision. The question of whether or not [REDACTED] the retail division of the NCE, remains in operation is the underlying factual question that ultimately impacts the sufficiency of capital investment and the break in operational status of [REDACTED] is apparent from the petitioner's submissions alone. The analysis relating to the continuing business operations of [REDACTED] will be discussed in the section relating to investment capital.
  13. 13. Page 13 of 48 Accordingly, there is no waiver of the issues that the NOID fails to raise because the director put petitioner on notice through previous communications and the denial was primarily based on information contained in the record that the petitioner supplied.” This is a 16-page decision worth reading. MAR182013_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] , doing business as [REDACTED] a restaurant located in Bakersfield, California. The petitioner indicated on part 2 of the petition that the business was not located in a targeted employment area. Thus, the required amount of capital in this case is $1 ,000,000. In her June 12, 2012 decision, the director denied the petition on the basis that the petitioner failed to establish the claimed investment has created or will create at least 10 full-time positions for qualifying employees. On appeal, the petitioner submits a three-page statement from counsel and additional evidence. For the reasons discussed below the petitioner has not overcome the director's basis for denial. In addition, the petitioner has failed to document (1) an investment in a
  14. 14. Page 14 of 48 "new" commercial enterprise, (2) the lawful source of the required amount of capital, and (3) that he has placed the required amount of capital at risk for the purpose of generating a return on the capital. The appeal will therefore be dismissed. * * * * * In addition, the petitioner transferred the $499,980 to , [REDACTED], on March 29, 2012. While the September 6, 2011 Minutes of Special Meeting of Directors indicate the petitioner would make the second payment within two years, counsel stated in September 7, 2011, letter accompanying the petition that the petitioner would make the next payment within 60 days. Instead, the petitioner made the payment after the director issued the RFE noting the lack of evidence of an investment of the full amount. Regardless, the petitioner has not established that these funds are at risk. While the petitioner submitted the unsigned August 22, 2011 construction contract for $378,680 toward which the initial $500,000 would allegedly be applied, the record does not identify the capital expenses for which will spend the $499,980. It is acknowledged that, unlike the petitioner in Matter of Ho, 22 I&N Dec. at 209, this petitioner has an operating business. Regardless, the ca8e stands for the proposition that all the funds must be at risk. Matter of Ho states: Simply formulating an idea for future business activity, without taking meaningful concrete action, is simllarly insufficient for a petitioner to meet the at-risk requirement. Id. at 210; see also Al Humaid v. Roark, No.
  15. 15. Page 15 of 48 See also: AAO’s April 20, 2009 Decision in regard to Al-Humaid H.A.K. Co. 3:09-CV-982-L, 2010 WL 308750 (N.D. Tex. Jan. 26, 2010). Without explaining how the March 29, 2012 funds will go towards capital expenses, the petitioner cannot demonstrate that the funds are sufficiently at risk. MAR182013_02B7203.pdf Summarily Dismissed [I-526] Counsel made no arguments as to any legal or factual errors and failed to submit the anticipated brief in the five months the appeal was awaiting review. MAR222013_01B7203.pdf Summarily Dismissed [I-526] Petitioner made no arguments as to any legal or factual errors and failed to submit the anticipated brief and/or additional evidence in the two months the appeal was awaiting review. At least this one was “self- represented” [pro se]. This one is worth reading just for the citations on the topic at hand. MAR272013_01B7203.pdf Appeal Dismissed [I-526]
  16. 16. Page 16 of 48 This is a unique issue that needs further development and study. It really applies to stand-alone or “direct” investments. In the RC context, the EB-5 investor is covered as a mere limited partner. 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 commercial real estate development company, located in Washington, DC 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 September 11, 2012, decision, the director denied the petition, finding that 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, counsel submits a four- page statement, dated October 30, 2012, and a one-page statement, dated November 19, 2012, and additional evidence. For the reasons discussed below, the petitioner has not overcome the director's ground for denial. In addition, the petitioner has failed to document the lawful source of the required amount of capital, has failed to demonstrate that she has placed the required amount of capital at risk for the purpose of generating a return on the capital and has failed to establish that she is or will be engaged in the management of [REDACTED]. The petitioner's appeal is therefore dismissed. MAR272013_02B7203.pdf Appeal Dismissed [I-526]
  17. 17. Page 17 of 48 Did AAO find more? Read it to find out. 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 a business, [REDACTED], a dry cleaning business in Weston, Florida. 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 May 18, 2012 decision, the director denied the petition on three bases. First, the petitioner has failed to demonstrate that he has placed the required amount of capital at risk for the purpose of generating a return on the capital. Second, the petitioner has failed to document the lawful source of the required amount of capital. Finally, the petitioner has 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, through his counsel, submits a brief and additional documents. For the reasons discussed below, the petitioner has not overcome any of the director's grounds for denial. 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 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].
  18. 18. Page 18 of 48 Adjudications Policy Memo. 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. * * * * * 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)
  19. 19. Page 19 of 48 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
  20. 20. Page 20 of 48 This is not truly a new concept. In another version of the “Immigrant Investor” context, see: Matter of Shon Ning Lee, 15 I&N Dec. 439 (BIA 1975), Decided by the Board August 26, 1975, aff’d, Shon Ning Lee v. INS, 576 F.2d 1380 (9th Cir. 1978) or No. 77-2681 (June 13, 1978). Services (USCIS). On appeal, counsel asserts that the director's findings that the petitioner's investment 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
  21. 21. Page 21 of 48 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). 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
  22. 22. Page 22 of 48 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, 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 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
  23. 23. Page 23 of 48 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 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
  24. 24. Page 24 of 48 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 new commercial
  25. 25. Page 25 of 48 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, 20122. The matter is now 2 This decision is not posted as of initial writing or revision date.
  26. 26. Page 26 of 48 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 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
  27. 27. Page 27 of 48 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 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
  28. 28. Page 28 of 48 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 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.
  29. 29. Page 29 of 48 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 the NCE 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 the NCE, 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 the NCE. 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 Florida Department of Economic Opportunity; compiled financial statements; and an organizational chart.
  30. 30. Page 30 of 48 On April 2, 2012, the director· denied the petition determining that the petitioner had failed to demonstrate: (1) that the NCE was located within a TEA; (2) a qualifying at-risk investment of $1 million; (3) that the funds invested in the NCE 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 the NCE 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.
  31. 31. Page 31 of 48 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 conversion business, located in Anaheim. California Counsel indicated in his initial memorandum in support of the 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 the 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.
  32. 32. Page 32 of 48 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 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.
  33. 33. Page 33 of 48 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 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.
  34. 34. Page 34 of 48 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 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.
  35. 35. Page 35 of 48 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 does 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.
  36. 36. Page 36 of 48 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.]
  37. 37. Page 37 of 48 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 the NCE is the [REDACTED]. The initial filing statement heading also indicated 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], the NCE 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, the
  38. 38. Page 38 of 48 NCE 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 by 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: (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 the NCE; 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
  39. 39. Page 39 of 48 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 the NCE; 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 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
  40. 40. Page 40 of 48 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 of Hsiung, 22 I&N Dec. 201, 204 n. 5 (Assoc. Comm'r 1998). The petitioner has not documented that her capital
  41. 41. Page 41 of 48 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
  42. 42. Page 42 of 48 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 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
  43. 43. Page 43 of 48 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! 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.
  44. 44. Page 44 of 48 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. 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
  45. 45. Page 45 of 48 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.
  46. 46. Page 46 of 48 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].
  47. 47. Page 47 of 48 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, 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. 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
  48. 48. Page 48 of 48 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 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 article3 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 3 SEE: http://www.slideshare.net/BigJoe5/a-review-of-the-two-post-policy-memo-regional-center-aao- decisions-jw-9-113

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