Joe Whalen’s EB-5 Roundup at April 27, 2012,EB-5 Investment Summit: Dealmakers Conference                                 ...
My Recommended Approach to RC Applications (I-924s)                                                                       ...
What the EB-5 RC Investor Should Expect                                                                           Creating...
This REALLY Happened!• An attorney, claiming to be             • WOW! I replied that:  involved in EB-5 already,          ...
Tenant-Occupancy Methodology• I was asked for input on the following:   – 1. What could be the economic theory or theories...
Tenant-Occupancy Methodology• (cont’d….) The damn good reasons should be laid out  blandly and bluntly in the Matter of Ho...
Two Key Elements for RC Proposals• Business Plan (BP):                   • Economic Analysis (EA):• Comprehensive, Detaile...
Two Key Elements for RC Proposal• Business Plan (BP):                   • Economic Analysis (EA):• This project specific p...
Transparent Complexity• Failing to Plan equals             • Material Change  Planning to Fail                   • Authori...
Chang v. U.S., 327 F.3d 911, 927 (9th Cir. 2003)• If the alien investor is seeking to have the  conditions removed from hi...
Material Change Invites Re-Evaluation• If, however, the immigrant investor is seeking to  have his or her conditions remov...
Within the Scope• If an investor must alter            • Is the altered plan in the  plans after I-526                    ...
Beyond The Scope—Not Fatal• ORIGINAL Approved Plan                  • FINAL Effectuated Plan• In RC’s Geographic Area     ...
Required Evidence• Preponderance of the                    • Specific Evidence in the regs?  Evidence Standard?           ...
Specific Evidence• Matter of Chawathe, 25 I&N Dec. 369 (AAO 2010): Sometimes  the critical parts are hard to find, such as...
Nexus until Now• Izummi tells us that:                    • Easy Sell:• “Especially where indirect               • The Reg...
What is NEXUS?• “A connection or series of connections linking two or  more things; or A connected group or series; or A  ...
What is NEXUS?• Are the third-party employees who are being counted  for EB-5 purpose, actually working in a business that...
What is NEXUS?• A realistic nexus is not something that can be faked.  The concept of a fake or false nexus is an oxymoron...
What is NEXUS?• In summary, nexus can be straightforward and obvious,  complex, convoluted, or tenuous.• In any of those c...
How Do You Demonstrate NEXUS?• Indirect job projections must be based on clearly  defined assumptions. At the end of the p...
“the employment upon which the          petition is based”• Nexus must be shown                  • Contingency Plans make ...
Broadening NEXUS• Early Commitment                    • “Overall Project” Plan• The Regional Center                 • IF y...
8 CFR § 204.6(g)• (g) Multiple investors —• (1) General. The establishment of a new commercial enterprise  may be used as ...
8 CFR § 204.6(g)• (g) Multiple investors —• (2) Employment creation allocation. The total number  of full-time positions c...
8 CFR § 204.6(g)•   (g) Multiple investors —(1) General. The establishment of a new commercial enterprise    may be used a...
How does your RC make the money available to the      job-creating commercial enterprise(s)?•Is YOUR RC the actual Project...
How does your RC make the money available to   the job-creating commercial enterprise(s)?Is it the case that those “others...
When your Regional Center hands EB-5 money over to an intermediary lender or a developer make sure YOU know whatTHEY will ...
Mind The Money Trails• Bridge funding must be presented in the I-924 first!• You cannot shift funds from their intended us...
RC’s Due Diligence Plans Are Critical• If their money stinks—your project sinks!• If your investors can’t qualify for a vi...
RC’s Due Diligence Plans Are Critical• ALL Project Partners must be vetted!• If your partners have problems, your RC may  ...
Shovel Ready for Initial I-924?• I think it is generally a bad idea!• It encourages being TOO NARROW and  CONFINED—stay ou...
I-526 as I-924 Amendment• Flexibility in Finalizing Project-Specific Details• An I-924 is NOT a visa petition. As such, th...
Issue Preclusion• I-526 EXEMPLAR approval locks in a job methodology.• Oyeniran v. Holder, No. 09-73683(9th Cir. March 6, ...
Issue Preclusion• An EB-5 Regional Center Proposal demands a large quantity of  information and a high level of detail. Th...
Issue Preclusion• Once the approach & methodology have been deemed  reasonable and have been accepted by USCIS; and• EB-5 ...
No Backpedalling Allowed• Siddiqui v. Holder, Nos. 09-3912, 10-1282 & 10-  3221 (7th Circuit, January 12, 2012), is import...
The Victorville Regional Center Termination Case in theDC District Court set a briefing schedule with thefollowing deadlin...
Joseph P. Whalen                        Independent EB-5 Consultant,                         Advocate, Trainer & Advisor  ...
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NYC EB-5 presentation April 27th 2012

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NYC EB-5 presentation April 27th 2012

  1. 1. Joe Whalen’s EB-5 Roundup at April 27, 2012,EB-5 Investment Summit: Dealmakers Conference • I am Joseph P. Whalen and have years of experience in immigration adjudication. I am most known for growing the EB-5 Regional Center (RC) Program from obscurity into a thriving USCIS “product line” . • I am the guy who wrote the very first practical and useable Regional Center Proposal “How to Apply” Instructions for USCIS. I grew the number of Regional Centers from barely a dozen to over 60 as the lone USCIS RC Adjudicator. • I personally wrote the initial RC adjudication training materials and trained the first batch of the CSC RC adjudicators. NOT FOR SALE-I OFFER THIS FREELY- 1 NOBODY IS ALLOWED TO SELL THIS!
  2. 2. My Recommended Approach to RC Applications (I-924s) 1. Don’t be Vague or Stingy at this step! Be 6. Seek EB5 and Proactive and plan for Contingencies. The Domestic Investors 1. Create Comprehensive, Detailed, & Credible Plan will Business Guide Selection of the Econometric Model5. Beware! Do Not Claim Plans and Data Inputs for the Economic Analysis!Approval in Advance ofApproval! It is OK to Say youare Seeking Approval until 5. Obtain 2. Select 2. This choice WILL affect theyou get it. If an Amendment Regional Econometric Center Model & I-829 Evidence Needs andis needed, don’t market it Approval Inputs the EA’s Job Creationyet as if it were ALREADY Projections/Predictions.approved.4. Include: EB-5 Compliant 3. The EA Will Project Direct &Standard Investor Documents, Indirect Jobs Created &Due Diligence Plans, RC 4. Submit 3. Prepare Determine the No. of EB-5 RegionalSponsor’s Funding Source(s), Center Economic Investor Slots Available and;Promotional & Marketing Plans, Analyses Proposal Should Include DomesticInvestor Services and Fee Investors and Benefits to U.S.Structure. and/or Regional Economies. NOT FOR SALE-I OFFER THIS FREELY- 2 NOBODY IS ALLOWED TO SELL THIS!
  3. 3. What the EB-5 RC Investor Should Expect Creating Project Specific Plan & EA Can be Skipped IF Vetted Plans & Select or EA’s Are Already in the RC’sInvestor & Family File Create “Exemplar Library”!!!for Visas or AOS Project Minor changes might be needed. Specific Business Plan Select or EB-5 Visa Create Project Petition Specific Approval Economic Analysis Many RC’s Vet the Funds Before this Next Step! Better Prepared RC Better Prepared Regional Execute EB-5 Investments Begin I-526s Should Center Compliant Affiliated Here for the Investor. NOT get an RFE! Documents & I-526 Agreements Add Investor’s Financial Many RC’s Vet the Funds Before Evidence the Previous Step! NOT FOR SALE-I OFFER THIS FREELY- 3 NOBODY IS ALLOWED TO SELL THIS!
  4. 4. This REALLY Happened!• An attorney, claiming to be • WOW! I replied that: involved in EB-5 already, • The I-526 is a visa petition, asked my opinion on not an application. something and it scared the • The EA is used to predict hell out of me! indirect jobs within the RC.• “How detailed of an • Non-RC petitioners show: economic analysis (EA) do my non-RC investors need • 1.) Jobs, or with to submit with their I- • 2.) a Matter of Ho 526 applications?” compliant, detailed,• This person claimed to comprehensive, and already have filed for EB-5 credible Business Plan clients! SCAIRY THOUGHT! without any EA at all. NOT FOR SALE-I OFFER THIS FREELY- 4 NOBODY IS ALLOWED TO SELL THIS!
  5. 5. Tenant-Occupancy Methodology• I was asked for input on the following: – 1. What could be the economic theory or theories that USCIS is relying on re: excess demand; in RFEs? – 2. What form of evidence would you suggest would prove excess demand?• Here is my take on this:• It is not economic theory that drives USCIS on this but rather it is reality. They expect sound business decisions to drive EB-5 financed projects. They expect that a huge project will not be contemplated, let alone commenced without a damn good reason. (Picking the pockets of rich aliens is not a damn good reason.) (cont’d….) NOT FOR SALE-I OFFER THIS FREELY- 5 NOBODY IS ALLOWED TO SELL THIS!
  6. 6. Tenant-Occupancy Methodology• (cont’d….) The damn good reasons should be laid out blandly and bluntly in the Matter of Ho compliant, comprehensive, detailed, and credible Business Plan.• That plan should be where underlying factual data (such as from statistically sound surveys) is stated (with sources cited–such as BEA, BLS, DOL, Census, a specific state office or program, chambers of commerce, industry-specific interest groups; or a think tank, or policy institute, universities, PEW Institutes, etc…).• A feasibility study may have been done for that particular project; or a local government (usually with state and/or federal support) may have produced a regional study to support legislation or an economic growth plan and/or grant applications for federal or state funding. NOT FOR SALE-I OFFER THIS FREELY- 6 NOBODY IS ALLOWED TO SELL THIS!
  7. 7. Two Key Elements for RC Proposals• Business Plan (BP): • Economic Analysis (EA):• Comprehensive, Detailed • What Econometric Model and Credible. will you use for that• What kinds of commercial economic analysis? enterprises will your • RIMS II Regional Center offer to • IMPLAN ALL of your investors? • REMI• NAICS Codes: North • REDYN [Regional Dynamics] American Industry Classification System (Try • Other/Customized? not to exceed 4 digits.) • Job Count determines• Maximize Flexibility number of EB-5 investors NOT FOR SALE-I OFFER THIS FREELY- 7 NOBODY IS ALLOWED TO SELL THIS!
  8. 8. Two Key Elements for RC Proposal• Business Plan (BP): • Economic Analysis (EA):• This project specific plan • The BP determines will be the source of data categories of input but may categories for input into or may not provide actual an Econometric Model to numbers to plug into the produce an Economic Model used to produce the Analysis (EA). final JOB CREATION• Actual or Exemplar: Projections.• Is it REALISTIC? • Garbage In-Garbage Out• Got NEXUS? • Got more NEXUS? NOT FOR SALE-I OFFER THIS FREELY- 8 NOBODY IS ALLOWED TO SELL THIS!
  9. 9. Transparent Complexity• Failing to Plan equals • Material Change Planning to Fail • Authorized Modification• Putting USCIS On Notice • Chang makes USCIS• [R]evolving Investments accept the predictions• Diversification that it approved, if the• Contingency Plans plan was followed.• Preserve Flexibility • BUT does not force the investor to be limited to• Secure Deference to a only that original plan. reasonable extent NOT FOR SALE-I OFFER THIS FREELY- 9 NOBODY IS ALLOWED TO SELL THIS!
  10. 10. Chang v. U.S., 327 F.3d 911, 927 (9th Cir. 2003)• If the alien investor is seeking to have the conditions removed from his or her status based on the business plan contained in the Form I-526, USCIS may not revisit certain aspects of the business plan, including issues related to the economic analysis supporting job creation.• It is more beneficial for an immigrant investor to utilize the business plan contained in the Form I- 526. NOT FOR SALE-I OFFER THIS FREELY- 10 NOBODY IS ALLOWED TO SELL THIS!
  11. 11. Material Change Invites Re-Evaluation• If, however, the immigrant investor is seeking to have his or her conditions removed based on a business plan not consistent with the approved I-526, the Chang decision does not foreclose USCIS from requiring or requesting evidence to prove the element of job creation.• This may include revisiting issues previously adjudicated in the Form I-526, such as the economic analysis underlying the new direct and indirect job creation. NOT FOR SALE-I OFFER THIS FREELY- 11 NOBODY IS ALLOWED TO SELL THIS!
  12. 12. Within the Scope• If an investor must alter • Is the altered plan in the plans after I-526 approved geographic approval, then results are area? what matter in the I-829 • Does the dollar amount adjudication. match the final project• Did the legally required area (TEA vs. non-TEA)? full amount of capital get • Are “Indirect” jobs invested? estimates in an approved• Did the minimum number industry and supported of jobs get created? by the RC’s approved econometric model? NOT FOR SALE-I OFFER THIS FREELY- 12 NOBODY IS ALLOWED TO SELL THIS!
  13. 13. Beyond The Scope—Not Fatal• ORIGINAL Approved Plan • FINAL Effectuated Plan• In RC’s Geographic Area • In RC’s Geographic Area – TEA or Not TEA? – TEA or Not TEA?• Minimum $$$ predicted • Minimum $$$ invested• Initially Planned Industry • Same or Similar or another Category vetted RC Industry Category• Economic Analysis (EA) • NEW Economic Analysis supports sufficient jobs by follows previously Approved Approved Methodology Model & shows enough jobs• EA Dictates needed I-829 • If beyond the scope, then evidence to prove the only DIRECT Jobs count and Stated Assumptions you need Specific Evidence NOT FOR SALE-I OFFER THIS FREELY- 13 NOBODY IS ALLOWED TO SELL THIS!
  14. 14. Required Evidence• Preponderance of the • Specific Evidence in the regs? Evidence Standard? • 8 CFR § 204.6 (j) (4)(i)(A):• “More Likely than Not” >50%• Matter of Chawathe, 25 I&N • tax records, Form I–9, or Dec. 369 (AAO 2010) other similar documents for• Chawathe’s Prong (3) states: ten (10) qualifying employees• In most administrative (for I-526) immigration proceedings, the • 8 CFR § 216.6 (a)(4)(iv): applicant must prove by a preponderance of evidence • payroll records, relevant tax that he or she is eligible for documents, and Forms I–9 the benefit sought. See (for I-829) footnote #7. • If one strays “outside the• Most ≠ ALL scope” of the RC, then only EB-5 DIRECT Jobs can count and specific evidence applies! NOT FOR SALE-I OFFER THIS FREELY- 14 NOBODY IS ALLOWED TO SELL THIS!
  15. 15. Specific Evidence• Matter of Chawathe, 25 I&N Dec. 369 (AAO 2010): Sometimes the critical parts are hard to find, such as this:• FN 7 The standard of proof should not be confused with the burden of proof. The burden of proving eligibility for the benefit sought remains entirely with the applicant. Section 316(b)(2) of the Act; see also section 291 of the Act, 8 U.S.C. § 1361 (2006).• Additionally, the “preponderance of the evidence” standard does not relieve the petitioner or applicant from satisfying the basic evidentiary requirements set by regulation. There are no regulations relating to a corporation’s eligibility as an “American firm or corporation” under section 316(b) of the Act. Had the regulations required specific evidence, the applicant would have been required to submit that evidence. Cf. 8 C.F.R. § 204.5(h)(3) (2006) (requiring that specific objective evidence be submitted to demonstrate eligibility as an alien of extraordinary ability). NOT FOR SALE-I OFFER THIS FREELY- 15 NOBODY IS ALLOWED TO SELL THIS!
  16. 16. Nexus until Now• Izummi tells us that: • Easy Sell:• “Especially where indirect • The Regional Center and its employment creation is being investors control the entire claimed, and the nexus project. between the money and the • Hard Sell: jobs is already tenuous, • The EB-5 financed project are [USCIS] has an interest in too peripheral, insignificant, examining, to a degree, the and/or too distant in terms of manner in which funds are the money-to-jobs nexus being applied.• The full amount of money • The Usual Challenge: must be made available to • RC Project(s) + Closely the business(es) most closely Associated and Collateral responsible for creating the Projects = EB-5 Direct, Indirect, employment upon which the (& Induced) Jobs & Beneficial petition is based.” Economic Impacts (for nexus). NOT FOR SALE-I OFFER THIS FREELY- 16 NOBODY IS ALLOWED TO SELL THIS!
  17. 17. What is NEXUS?• “A connection or series of connections linking two or more things; or A connected group or series; or A causal link”. [USCIS desires a causal link for nexus.]• It is useful to think of it in terms of a broad relationship that clearly shows a palpable connectivity amongst group members.• In this instance “palpable” is defined as: “Able to be touched or felt: Tangible; esp. of a feeling or atmosphere; So intense as to be almost touched or felt;• [and my particular favorite]: easily perceptible by the mind: Noticeable and/or Manifest. [Leaps from page!]• Address the Regional Center’s Overall Project! NOT FOR SALE-I OFFER THIS FREELY- 17 NOBODY IS ALLOWED TO SELL THIS!
  18. 18. What is NEXUS?• Are the third-party employees who are being counted for EB-5 purpose, actually working in a business that has a direct connection (palpable nexus) to the overall project in which the Regional Center is committed? Are they really a part of the project? Are they really within reach? Are they so distant, peripheral, and/or disconnected that there is no realistic nexus, which is easily perceptible to any rational mind? Are they the employees of a “customer” rather than the employees of a “partner (even a distant partner) in the project”? In this sense, I am not confining the inclusion of only partners that can be traced on paper. Papers can be faked. [Think bigger than you have so far.] NOT FOR SALE-I OFFER THIS FREELY- 18 NOBODY IS ALLOWED TO SELL THIS!
  19. 19. What is NEXUS?• A realistic nexus is not something that can be faked. The concept of a fake or false nexus is an oxymoron.• A nexus can be: strong vs. weak, or clear vs. vague, or sufficient vs. insufficient, etc....• While nexus cannot be faked it may be difficult to explain or hard to see.• If any relationship is supported by fake paperwork, then that is fraud, which may also qualify as criminal behavior. However, it is quite possible for a real relationship, which is not supported by a paper trail to be clearly seen with the naked eye. NOT FOR SALE-I OFFER THIS FREELY- 19 NOBODY IS ALLOWED TO SELL THIS!
  20. 20. What is NEXUS?• In summary, nexus can be straightforward and obvious, complex, convoluted, or tenuous.• In any of those cases, it is there to some degree.• Exactly at what point it is too tenuous to count towards EB-5 indirect job totals is fact-specific and case-specific.• Sufficient Nexus will ultimately be a finding-of-fact by the adjudicator based upon all of the evidence presented as to whether it counts or not.• The number one advantage of participating in the Pilot Program is counting indirect jobs created by others via a clear nexus within the same USCIS Approved and Designated Regional Center’s Overall Project.• The connection needs a reasonable/realistic explanation. NOT FOR SALE-I OFFER THIS FREELY- 20 NOBODY IS ALLOWED TO SELL THIS!
  21. 21. How Do You Demonstrate NEXUS?• Indirect job projections must be based on clearly defined assumptions. At the end of the process you need to establish that the conditions precedent underlying the stated assumptions have been fulfilled or are on the cusp of being achieved within a reasonable period of time.• You need to know exactly what actual physical evidence at the end will support the assertions you made up front.• I call this a back-end burden of proof. NOT FOR SALE-I OFFER THIS FREELY- 21 NOBODY IS ALLOWED TO SELL THIS!
  22. 22. “the employment upon which the petition is based”• Nexus must be shown • Contingency Plans make between the EB-5 money the difference. and the job-creating • Advance Planning can commercial enterprise(s). save an EB-5 investor• How close is close enough from a failing project. and how distant is too • Swap and shift EB-5 distant to count? investors between• Must put USCIS on notice projects that are within of contingencies. the scope of the RC.• Did you confine the RC • Gross mismanagement investment too much? will bury you! NOT FOR SALE-I OFFER THIS FREELY- 22 NOBODY IS ALLOWED TO SELL THIS!
  23. 23. Broadening NEXUS• Early Commitment • “Overall Project” Plan• The Regional Center • IF your RC Plan is too cannot hang back and damn narrow (like shop around for a done- falling for the CSC trick deal and expect to get of making you be too any credit for jobs detailed and constricted created by someone in order to submit an else’s risk and success! actual “shovel-ready”• See: 8 CFR § 204.6(g) application) THEN YOU LOSE broad NEXUS! NOT FOR SALE-I OFFER THIS FREELY- 23 NOBODY IS ALLOWED TO SELL THIS!
  24. 24. 8 CFR § 204.6(g)• (g) Multiple investors —• (1) General. The establishment of a new commercial enterprise may be used as the basis of a petition for classification as an alien entrepreneur by more than one investor, provided each petitioning investor has invested or is actively in the process of investing the required amount for the area in which the new commercial enterprise is principally doing business, and provided each individual investment results in the creation of at least ten full- time positions for qualifying employees.• The establishment of a new commercial enterprise may be used as the basis of a petition for classification as an alien entrepreneur even though there are several owners of the enterprise, including persons who are not seeking classification under section 203(b)(5) of the Act and non-natural persons, both foreign and domestic, provided that the source(s) of all capital invested is identified and all invested capital has been derived by lawful means. NOT FOR SALE-I OFFER THIS FREELY- 24 NOBODY IS ALLOWED TO SELL THIS!
  25. 25. 8 CFR § 204.6(g)• (g) Multiple investors —• (2) Employment creation allocation. The total number of full-time positions created for qualifying employees shall be allocated solely to those alien entrepreneurs who have used the establishment of the new commercial enterprise as the basis of a petition on Form I–526. No allocation need be made among persons not seeking classification under section 203(b)(5) of the Act or among non-natural persons, either foreign or domestic. [USCIS]shall recognize any reasonable agreement made among the alien entrepreneurs in regard to the identification and allocation of such qualifying positions. NOT FOR SALE-I OFFER THIS FREELY- 25 NOBODY IS ALLOWED TO SELL THIS!
  26. 26. 8 CFR § 204.6(g)• (g) Multiple investors —(1) General. The establishment of a new commercial enterprise may be used as the basis of a petition for classification as an alien entrepreneur by more than one investor, provided each petitioning investor has invested or is actively in the process of investing the required amount for the area in which the new commercial enterprise is principally doing business, and provided each individual investment results in the creation of at least ten full-time positions for qualifying employees. The establishment of a new commercial enterprise may be used as the basis of a petition for classification as an alien entrepreneur even though there are several owners of the enterprise, including persons who are not seeking classification under section 203(b)(5) of the Act and non-natural persons, both foreign and domestic, provided that the source(s) of all capital invested is identified and all invested capital has been derived by lawful means.• (2) Employment creation allocation. The total number of full-time positions created for qualifying employees shall be allocated solely to those alien entrepreneurs who have used the establishment of the new commercial enterprise as the basis of a petition on Form I–526. No allocation need be made among persons not seeking classification under section 203(b)(5) of the Act or among non-natural persons, either foreign or domestic. The Service shall recognize any reasonable agreement made among the alien entrepreneurs in regard to the identification and allocation of such qualifying positions. NOT FOR SALE-I OFFER THIS FREELY- 26 NOBODY IS ALLOWED TO SELL THIS!
  27. 27. How does your RC make the money available to the job-creating commercial enterprise(s)?•Is YOUR RC the actual Project Developer?•Does YOUR RC only facilitate the formation of EB-5investor Limited Partnerships (LPs) instead?•Is YOUR RC the General Partner in those LPs?•Does that LP join another entity in a larger project?•Has YOUR RC taken on the primary role of matchingthose EB-5 LPs’ funds to “others”? WHO? NOT FOR SALE-I OFFER THIS FREELY- 27 NOBODY IS ALLOWED TO SELL THIS!
  28. 28. How does your RC make the money available to the job-creating commercial enterprise(s)?Is it the case that those “others” to whom YOUR RC: 1.) loans money to or 2.) makes an equity investment in –are found among the following?a.) An intermediary lender who will in turn make loans to projectdevelopers who in turn will construct facilities for use by theowners/operators of job-creating commercial enterprises; orb.) An intermediary lender who will make loans directly toowners/operators of job-creating commercial enterprises; orc.) The project developers who construct, expand, orremodel/refurbish a facility for the owners/operators of job-creating commercial enterprises; ord.) The owners of job-creating commercial enterprises directly. NOT FOR SALE-I OFFER THIS FREELY- 28 NOBODY IS ALLOWED TO SELL THIS!
  29. 29. When your Regional Center hands EB-5 money over to an intermediary lender or a developer make sure YOU know whatTHEY will do with it and be sure that you inform USCIS Up-Front.•You need to include a description of money pathways in yourInvestor Agreements (PPM & LP Agreements, etc.) that are orwill be used as prima facie evidence in support of the I-526petitions.•Standard transaction documents should be vetted in the I-924and preferably the EXEMPLAR I-526 as an I-924 Amendment.•This will “put USCIS On Notice” of the intended use of fundsto create jobs, or to claim jobs created via earlier bridgefinancing. You can be creative at this stage with yourstandardized transaction documentation but you must beforthcoming about it. NOT FOR SALE-I OFFER THIS FREELY- 29 NOBODY IS ALLOWED TO SELL THIS!
  30. 30. Mind The Money Trails• Bridge funding must be presented in the I-924 first!• You cannot shift funds from their intended use to another purpose that was not identified and claimed up front in the EB-5 investor’s I-526 visa petition.• Misdirecting funds in such a manner is a “bait and switch” tactic that USCIS will catch and will make you suffer greatly for.• Izummi was all about catching the RC promoter in the act of altering the investment mechanisms and transaction documentation as well as pocketing the money instead of creating jobs. That was the true nature of the original prohibited material change. NOT FOR SALE-I OFFER THIS FREELY- 30 NOBODY IS ALLOWED TO SELL THIS!
  31. 31. RC’s Due Diligence Plans Are Critical• If their money stinks—your project sinks!• If your investors can’t qualify for a visa—they will bad mouth you because of their problems. – Past Immigration Violations (previously removed) – Current Unlawful Presence or Status Violations mean that they cannot adjust status and once they depart the U.S. they are barred from re-entry for three or five+ YEARS! – Criminal Histories may mean Inadmissibility! NOT FOR SALE-I OFFER THIS FREELY- 31 NOBODY IS ALLOWED TO SELL THIS!
  32. 32. RC’s Due Diligence Plans Are Critical• ALL Project Partners must be vetted!• If your partners have problems, your RC may be encumbered with those problems.• Full Disclosure is required in the PPM!• Study the South Dakota lawsuit: Zhen v SDRC• http://eb5info.com/system/documents/209/o riginal/Zhen_v_SDRC.pdf?1331404066 NOT FOR SALE-I OFFER THIS FREELY- 32 NOBODY IS ALLOWED TO SELL THIS!
  33. 33. Shovel Ready for Initial I-924?• I think it is generally a bad idea!• It encourages being TOO NARROW and CONFINED—stay out of this straight-jacket!• Only a broad, multi-faceted PROJECT is safe.• IF a single narrow 1st PROJECT fails, THEN, without any options the REGIONAL CENTER likely collapses!• EXEMPLAR PROJECTS as contingencies are a safety net that can save the Regional Center. NOT FOR SALE-I OFFER THIS FREELY- 33 NOBODY IS ALLOWED TO SELL THIS!
  34. 34. I-526 as I-924 Amendment• Flexibility in Finalizing Project-Specific Details• An I-924 is NOT a visa petition. As such, the RC applicant is NOT seeking to secure a priority date for visa allocation purposes (obtaining an actual Immigrant Visa abroad or filing for Adjustment of Status domestically).• Because it is NOT a visa petition, it is wide open for modifications.• I-526 Exemplar Approval as a Marketing Tool• Once one has received an approval for the project specific I-526 exemplar, that approval is a marketable commodity. It promotes investor confidence! NOT FOR SALE-I OFFER THIS FREELY- 34 NOBODY IS ALLOWED TO SELL THIS!
  35. 35. Issue Preclusion• I-526 EXEMPLAR approval locks in a job methodology.• Oyeniran v. Holder, No. 09-73683(9th Cir. March 6, 2012), explains:• Collateral estoppel applies to a question, issue, or fact when four conditions are met: – (1) the “issue” at stake was identical in both proceedings (Job Prediction Methodology & money pathways); – (2) the issue was actually “litigated and decided” in the prior proceedings (EXEMPLAR I-526); – (3) there was a “full and fair opportunity to litigate” the issue (RFE and response); and – (4) the issue was “necessary to decide the merits” (Exemplar I-526 was approved for $ path & methodology). NOT FOR SALE-I OFFER THIS FREELY- 35 NOBODY IS ALLOWED TO SELL THIS!
  36. 36. Issue Preclusion• An EB-5 Regional Center Proposal demands a large quantity of information and a high level of detail. The exacting standards employed lead to a very solid settlement of many hypertechnical matters and issues. This is a standard, general and basic basis for reasonable reliance on the approved financing approach and job creation prediction methodology.• Going that extra mile and securing a Project Specific EXEMPLAR I-526-I-924 approval which locks in USCIS acceptance of the indirect job-creation methodology is the safest approach, if you stick close enough to that plan.• This is the basis for an even greater degree of reasonable reliance. This proposition is supported by Chang v. United States of America, 327 F. 3d 911 (9th Cir. 2003). NOT FOR SALE-I OFFER THIS FREELY- 36 NOBODY IS ALLOWED TO SELL THIS!
  37. 37. Issue Preclusion• Once the approach & methodology have been deemed reasonable and have been accepted by USCIS; and• EB-5 aliens have invested millions of dollars into a large project;• USCIS cannot conscionably disallow the predicted indirect job creation of a successfully accomplished, previously approved plan when adjudicating the I-829 requests for removal of conditions on status.• AAO has already blocked CSC on this basis in the same way that the Ninth Circuit blocked INS from reneging on such a “contract-like” agreement in Chang v. United States of America, 327 F. 3d 911 (9th Cir. 2003). NOT FOR SALE-I OFFER THIS FREELY- 37 NOBODY IS ALLOWED TO SELL THIS!
  38. 38. No Backpedalling Allowed• Siddiqui v. Holder, Nos. 09-3912, 10-1282 & 10- 3221 (7th Circuit, January 12, 2012), is important for the:• The Seventh Circuit’s statement that they were “.... unable to affirm the AAO’s conclusion[s] .... because .... AAO’s decisions lack[ed] individualized analysis and.... [did].... not identify particular deficiencies in the substantial evidence submitted ...”• Additionally, the Court found that AAO impermissibly applied statutory changes retroactively and contrary to the terms of a settlement agreement. NOT FOR SALE-I OFFER THIS FREELY- 38 NOBODY IS ALLOWED TO SELL THIS!
  39. 39. The Victorville Regional Center Termination Case in theDC District Court set a briefing schedule with thefollowing deadlines:Administrative record January 17, 2012 (This was met early by USCIS.)Dispositive motions March 2, 2012Responses to dispositive motions April 2, 2012Replies April 16, 2012However, Victorville filed for “Voluntary Dismissal” before USCIS couldfile anything further and cut-off any actual Court Decision!The CSC Decision of May 24,2011, which Dismissed the Motion broughtagainst its October 20, 2010 Termination, was incorporated by reference andAffirmed by AAO on Certification. In addition, the new and futile issuesraised by Victorville in response to CSC’s Notice of Certification werespecifically addressed in the final AAO Decision of December 21, 2011.There are NO Regional Center Specific PRECEDENTS to date. NOT FOR SALE-I OFFER THIS FREELY- 39 NOBODY IS ALLOWED TO SELL THIS!
  40. 40. Joseph P. Whalen Independent EB-5 Consultant, Advocate, Trainer & Advisor 51 Ashton Place | Buffalo, NY 14220-2107 Phone: (716) 604-4233 Fax: (716) 822-1860 E-mail: joseph.whalen774@gmail.com or Silver.SurferEB5@gmail.com Visit me on the web at: http://www.slideshare.net/BigJoe5 or http://eb5info.com/eb5-advisors/34-silver-surfer DISCLAIMER: Work is performed by a non-attorney independent business consultant. It is the clients responsibility to have any and all non-attorney work products checked by an attorney. I provide highly-individualized training based onconsultation with my clients. I serve Regional Center Principals and their counsel. I am not an attorney myself although I have trained numerous attorneys and INS/USCISadjudicators in complex issues within immigration and nationality law. I do not prepareforms, write business plans, or create economic analyses. I do review them for clients prior to submission and suggest corrections and/or modifications to run by their attorneys and investment advice professionals. NAICS Code: 611430 Professional and Management Development Training NOT FOR SALE-I OFFER THIS FREELY- 40 NOBODY IS ALLOWED TO SELL THIS!

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