~data de~­            ..=~dearly unwarraMeo                                               U.S. Department of Homeland Secu...
Page 2DISCUSSION: The Director, California Service Center, denied the preference visa petition, which isnow before the Adm...
Page 3The record indicates that the petition is based on an investment in a business,                             not loca...
Page4submitted by the petitioner, and on-Internal Revenue Service (IRS) Form 1065 U.S. Returnof Partnership Income.While -...
Page 5concept to the petitioner for 15 years, allowing the petitioner to open new restaurants. Counselfurther explains tha...
--~   ~-·   ------------------------------Page 6         generating a return on the capital placed at risk. Evidence of me...
..     Page 7     amount. In 2007, however, the petitioners schedule K-1 reflects a capital contribution of      $1,029,04...
..     Page 8     The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act,     8...
U.S. Department of Homeland Security     identifying data deleted to                                                 U.S. ...
Page 2DISCUSSION: The Director, California Service Center, denied the preference visa petition. TheAdministrative Appeals ...
Page 3INVESTMENT OF CAPITALThe regulation at 8 C.F.R. § 204.6(e) states, in pertinent part, that:         Capital means ca...
Page 4               nonvoting, common or preferred). Such stock may not include terms               requiring the new com...
-Page 5-     is no longer a wholly-owned subsidiary o f - and, thus, is no longer part of the new commercial enterprise.Wh...
Page 6             (Emphasis added.)             On motion, counsel asserts that the petitioner owns 90 percent of b o t h...
ORDER:   The AAOs decision ofFebruary 18,2010 is affirmed. The petition is denied.
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Single EB-5 case AAO combined dismissal and MTR 2010-2011

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Single EB-5 case AAO combined dismissal and MTR 2010-2011

  1. 1. ~data de~­ ..=~dearly unwarraMeo U.S. Department of Homeland Security •lil•_. ~,.......patswr ... , U.S. Citizenship and Immigration Services Office ofAdministrative Appeals, MS 2090 Washington, DC 20529-2090 U.S. Citizenship ft)BLICCOPV and Immigration Services Two Decisions conerning the same case have been combined for easy reference and study. FILE: Office: CALIFORNIA SERVICE CENTER Date: fEB 1 s zom INRE: Petitioner: PETITION: Immigrant Petition by Alien Entrepreneur Pursuant to Section 203(b)(5) of the Immigration and Nationality Act, 8 U.S.C. § 1153(b)(5) ON BEHALF OF PETITIONER: 1.) Is it "new"? 2.) Has the "investment been sustained"? 3.) Wholly-owned vs. affiliate. INSTRUCTIONS: This is the decision of the Administrative Appeals Office in your case. All documents have been returned to the office that originally decided your case. Any further inquiry must be made to that office. If you believe the law was inappropriately applied or you have additional information that you wish to have considered, you may file a motion to reconsider or a motion to reopen. Please refer to 8 C.F.R. § 103.5 for the specific requirements. All motions must be submitted to the office that originally decided your case by filing a Form I-290B, Notice of Appeal or Motion, with a fee of $585. Any motion must be filed within 30 days of the decision that the motion seeks to reconsider or reopen, as required by 8 C.F.R. § I 03.5(a)(l)(i).;?.- Perry Rhew Chief, Administrative Appeals Office www.uscis.gov
  2. 2. Page 2DISCUSSION: The Director, California Service Center, denied the preference visa petition, which isnow before the Administrative Appeals Office (AAO) on certification. The directors decision will beaffirmed.The petitioner seeks classification as an alien entrepreneur pursuant to section 203(b)(5) of theImmigration and Nationality Act (the Act), 8 U.S.C. § 1153(b)(5).The director determined that the petitioner had failed to demonstrate a qualifying sustained investmentin a new commercial enterprise. The director certified the decision denying the petition to the AAOpursuant to 8 C.F.R. § 103.4 and advised the petitioner that he was afforded 30 days in which to submita brief to this office.In response, counsel submits a brief and additional evidence. For the reasons discussed below, theemployment generating enterprise, a restaurant built in 2006, fits the regulatory definition of "new"notwithstanding the establishment date of the franchise. Thus, we withdraw the directors conclusionthat the commercial enterprise in this matter is not "new." While we find that the accountantsexplanation for the reduction in capital as losses rather than withdrawals is consistent with the schedulesK-1 submitted in this matter, we uphold the directors concern that the petitioner did not maintain hisinvestment based on a $1,000,000 transfer from the commercial enterprise to the petitioner on June.28,2007. Finally, the petitioners 2008 schedule K-1 for the employment generating entity, submitted onappeal, suggests that it may no longer be a wholly owned subsidiary of the new commercial enterpriseidentified on the petition.The AAO maintains plenary power to review each appeal on a de novo basis. 5 U.S.C. § 557(b) ("Onappeal from or review of the initial decision, the agency has all the powers which it would have inmaking the initial decision except as it may limit the issues on notice or by rule."); see also Janka v.US. Dept. of Transp., NTSB, 925 F.2d 1147, 1149 (9th Cir. 1991). The AAOs de novo authorityhas been long recognized by the federal courts. See, e.g., Dor v. INS, 891 F.2d 997, 1002 n. 9 (2dCir. 1989).Section 203(b)(5)(A) of the Act, as amended by the 21st Century Department of Justice AppropriationsAuthorization Act, Pub. L. No. 107-273, 116 Stat. 1758 (2002), provides classification to qualifiedimmigrants seeking to enter the United States for the purpose of engaging in a new commercialenterprise: (i) in which such alien has invested (after the date of the enactment of the Immigration Act of 1990) or, is actively in the process of investing, capital in an amount not less than the amount specified in subparagraph (C), and (ii) which will benefit the United States economy and create full-time employment for not fewer than 10 United States citizens or aliens lawfully admitted for permanent residence or other immigrants lawfully authorized to be employed in the United States (other than the immigrant and the immigrants spouse, sons, or daughters).
  3. 3. Page 3The record indicates that the petition is based on an investment in a business, not located in a targeted employment area for which the required amount adjusted downward. Thus, the required amount of capital in this case is$1 ,000,000.NEW COMMERCIAL ENTERPRISESection 203(b)(5)(A)(i) of the Act states, in pertinent part, that: "Visas shall be made available ... toqualified immigrants seeking to enter the United States for the purpose of engaging in a newcommercial enterprise" (Emphasis added.)The regulation at 8 C.F.R. § 204.6(e) defines "new" as established after November 29, 1990.The regulation at 8 C.F .R. § 204.6(h) states that the establishment of a new commercial enterprisemay consist of the following: (1) The creation of an original business; (2) The purchase of an existing business and simultaneous or subsequent restructuring or reorganization such that a new commercial enterprise results; or (3) The expansion of an existing business through the investment of the required amount, so that a substantial change in the net worth or number of employees results from the investment of capitaL Substantial change means a 40 percent increase either in the net worth, or in the number of employees, so that the new net worth, or number of employees amounts to at least 140 percent of the pre-expansion net worth or number of employees. Establishment of a new commercial enterprise in this manner does not exempt the petitioner from the requirements of 8 CFR 204.6G)(2) and (3) relating to the required amount of capital investment and the creation of full-time employment for ten qualifying employees. In the case of a capital investment in a troubled business, employment creation may meet the criteria set forth in 8 CFR 204.6G)(4)(ii).The 21st Century Department of Justice Appropriations Authorization Act, Pub. L. No. 107-273, 116Stat. 1758 (2002), which amends portions of the statutory framework of the EB-5 AlienEntrepreneur program, was signed into law on November 2, 2002. Section 11036(a)(l)(B) of thislaw eliminates the requirement that the alien personally establish the new commercial enterprise.This amendment did not, however, eliminate the requirement that the commercial enterprise be"new." Thus, we find that 8 C.F.R. § 204.6(h) is still relevant for commercial enterprises establishedby the petitioner or someone else prior to November 29, 1990.The petitioner indicated on the petition that the new commercial enterprise was established on March31, 2006. This date is the establishment date listed on the State of Floridas electronic records,
  4. 4. Page4submitted by the petitioner, and on-Internal Revenue Service (IRS) Form 1065 U.S. Returnof Partnership Income.While - w a s organized in 2006, it is the job creating enterprise that must be examined indetermining whether a new commercial enterprise has been created. Matter 22 I&N Dec.~mr. 1998). The main employment generating entity ·- T h i s company was organized on March 21, 2006.The regulation at 8 C.P.R. § 204.6(e) provides: Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to, a sole proprietorship, partnership (whether limited or general), holding company, joint venture, corporation, business trust, or other entity which may be publicly or privately owned. This definition includes a commercial enterprise consisting of a holding company and its wholly- owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business. This definition shall not include a noncommercial activity such as owning and operating a personal residence.(Bold emphasis added.)Thus, in order to consider- part of the new commercial enterprise, it must be a wholly-ownedsubsidiary o f - The record establishes t h a t - was initially owned by the petitioner and the members o f - On December 31, 2007, however, they transferred theirinterest to Thus, as of the date of filing in August 2008,- was a wholly-ownedsubsidiary o f - and may be considered part of the new commercial enterprise. That said, onappeal, the petitioner submits the petitioners Form schedule K-1 for-eflecting that thepetitioner once again owns capital in - If true, - would no longer be able to beconsidered part of the commercial enterprise identified on the Form I-526 petition,- Anyfuture filing must address this discrepancy.On March 23, 2009, the director noted that the petitioners initial business partner,had operated restaurants under a similar name and requested evidence that the petitioner hadinvested in a "new" commercial enterprise. In response, counsel notes that was organized onMarch 21, 2006 and asserts that the documentation of the petitioners investment relates only to thisone restaurant.The director noted that the restaurants logo says "1926" and the record contains a menu dated 2004.Thus, the director concluded that the petitioner had not invested in a new commercial enterprise.
  5. 5. Page 5concept to the petitioner for 15 years, allowing the petitioner to open new restaurants. Counselfurther explains that the new restaurant incorporated the menu from other . .restaurants and, thus,used a 2004 version of the menu.While the unsupported assertions of counsel are not evidence, Matter of Obaigbena, 19 I&N Dec.533,534 n.2 (BIA 1988); Matter of Laureano, 19 I&N Dec. 1, 3 n.2 (BIA 1983); Matter ofRamirez-Sanchez, 17 I&N Dec. 503, 506 (BIA 1980), the petitioner submits ample evidence to supportcounsels statements. Specifically, the petitioner resubmits the separation including thelicense and trademark 4 and submits (1) a letter from ·that the did not open until Fand invoices confirming that built the restaurant in2006 and 2007 and (3) a letter and lease from the that-leased the restaurant property in May 2006 and began construction shortly thereafter.The above evidence amply demonstrates that the the employmentgenerating entity in this case, was built in 2 time in 2007.Thus, notwithstanding its affiliation with the 1926 . . brand, the employment generating entity inthis matter is clearly "new" as defined at 8 C.F.R. § 204.6(e).In light of the above, we withdraw the directors conclusion that the petitioner did not invest in a"new" commercial enterprise.INVESTMENT OF CAPITALThe regulation at 8 C.F .R. § 204.6( e) states, in pertinent part, that: Capital means cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien entrepreneur, provided the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. * * * Invest means to contribute capital. A contribution of capital in exchange for a note, bond, convertible debt, obligation, or any other debt arrangement between the alien entrepreneur and the new commercial enterprise does not constitute a contribution of capital for the purposes of this part.The regulation at 8 C.F.R. § 204.60) states, in pertinent part, that: (2) To show that the petitioner has invested or is actively in the process of investing the required amount of capital, the petition must be accompanied by evidence that the petitioner has placed the required amount of capital at risk for the purpose of
  6. 6. --~ ~-· ------------------------------Page 6 generating a return on the capital placed at risk. Evidence of mere intent to invest, or of prospective investment arrangements entailing no present commitment, will not suffice to show that the petitioner is actively in the process of investing. The alien must show actual commitment of the required amount of capital. Such evidence may include, but need not be limited to: (i) Bank statement(s) showing amount(s) deposited in United States business account(s) for the enterprise; (ii) Evidence of assets which have been purchased for use in the United States enterprise, including invoices, sales receipts, and purchase contracts containing sufficient information to identify such assets, their purchase costs, date of purchase, and purchasing entity; (iii) Evidence of property transferred from abroad for use in the United States enterprise, including United States Customs Service commercial entry documents, bills of lading and transit insurance policies containing ownership information and sufficient information to identify the property and to indicate the fair market value of such property; (iv) Evidence of monies transferred or committed to be transferred to the new commercial enterprise in exchange for shares of stock (voting or nonvoting, common or preferred). Such stock may not include terms requiring the new commercial enterprise to redeem it at the holders request; or (v) Evidence of any loan or mortgage agreement, promissory note, security agreement, or other evidence of borrowing which is secured by assets of the petitioner, other than those of the new commercial enterprise, and for which the petitioner is personally and primarily liable.The petitioner indicated on the Form I-526 petition, Part 3, that he made an initial investment of$175,000 on August 24, 2005 and that he had made a total investment of $1 ,029,070.84.The full amount of the requisite investment must be made available to the business most closelyresponsible for creating the employment upon which the petition is based. Matter of Izummi,22 I&N Dec. 169, 179 (Commr. 1998). As stated above, the emplo~enerating e n t i t y -was a ~-owned subsidiary of the new commercial enterprise, - as of the date of filing.Thus,- was part of the commercial enterprise as defined at 8 C.P.R. § 204.6(e). In addition tocomplying with the definition of commercial enterprise, this relationship makes it easier todemonstrate a nexus between the petitioners investment and job creation.The petitioner submitted the schedules K-1 accompanying- IRS Forms 1065. Thepetitioners schedule K-1 for 2006 reflects a capital investment of $89,970 and a withdrawal of that
  7. 7. .. Page 7 amount. In 2007, however, the petitioners schedule K-1 reflects a capital contribution of $1,029,041. While this schedule K-1 also reflects a decrease of$577,147, that decrease purports to represent the petitioners share of the companys losses. The separate and distinct line for "withdrawals and distributions" does not reflect that the petitioner withdrew any money in 2007. In addition, because the petitioner transferred his interest i n - t o - i n 2007, his schedule K-1 for that year showed an ending capital balance of $0. The director noted that decrease in capital in - and the zero ending balance for the petitioners capital i n - and concluded that the petitioner had not sustained his investment. ·oner submits a letter from the firm that prepared the tax returns for correctly notes schedules K-1 for BGCM show losses, not withdrawals. In -explains that the petitioners zero ending balance i n - reflects the change in ownership of that company. The petitioner submits his 2008 schedule K-1 f o r - showing an additional contribution of $684,630 during that year . • • • • • assertions are supported by the plain language of the schedules K-1. Thus, the schedules K-1 in and of themselves do not suggest that the petitioner has withdrawn any of his investment in-after 2006. Moreover, the petitioners lack of interest in -would not be ~act, for the reasons stated above, had the petitioner not transferred his interest in - - - - w e would not be able to consider- as part of the new commercial enterprise. As also stated above, however, the petitioners schedule 2008 K-1 f o r - suggests t h a t - is no longer a wholly owned subsidiary o f - Nevertheless, the bank statements f o r - and the petitioner do support the directors ultimate conclusion that the petitioner did not maintain his investment in The statements reflect that as of June 22, 2007, the petitioner had transferred $555 001 to As of September 28, 2006, the petitioner had transferred $650,000 to which went towards the construction of the restaurant. On June 28, 2007, however, transferred $1,000,000 to the petitioners checking account. On the same date, he transferred those funds (in two transfers of $500,000 each) to his own personal money market savings account. On July 12, 2007, the petitioner transferred the same amount (in two transfers of $500,000 each) back to his checking account. On the same date, the petitioner transferred $1,000,000 to an unknown checking account. The record contains- checking account statement for July 2007. This statement does not reflect that - w a s the recipient of the $1,000,000 transfer. Thus, the beneficiary of the July 12, 2007 transfer of $1,000,000 from the petitioners checking account is undocumented. In light of the above, regardless of the information on the petitioners schedules K-1 f o r - he in fact withdrew $1 0,000 from-checking account on June 28, 2007 and did not return that money to Thus, we uphold the directors finding that the petitioner did not maintain his investment in
  8. 8. .. Page 8 The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. § 1361. The petitioner has not sustained that burden. Accordingly, the decision of the director denying the petition will be affirmed. ORDER: The petition is denied.
  9. 9. U.S. Department of Homeland Security identifying data deleted to U.S. Citizenship and Immigration Services Administrative Appeals Office (AAO) prevent cleariy unwarranted 20 Massachusetts Ave., N.W., MS 2090 invasion of~oersonal privacy Washington, DC 20529-2090 U.S. Citizenship and Immigration Services PUBLIC COPY FILE: Office: CALIFORNIA SERVICE CENTER Date: JJIJ! 0 7 ZC11 INRE: Petitioner: PETITION: Immigrant Petition by Alien Entrepreneur Pursuant to Section 203(b)(5) of the Immigration and Nationality Act, 8 U.S.C. § 1153(b)(5) ON BEHALF OF PETITIONER: INSTRUCTIONS: Enclosed please find the decision of the Administrative Appeals Office in your case. All of the documents related to this matter have been returned to the office that originally decided your case. Please be advised that any further inquiry that you might have concerning your case must be made to that office. If you believe the law was inappropriately applied by us in reaching our decision, or you have additional information that you wish to have considered, you may file a motion to reconsider or a motion to reopen. The specific requirements for filing such a request can be found at 8 C.F .R. § I 03.5. All motions must be submitted to the office that originally decided your case by filing a Form I-290B, Notice of Appeal or Motion, with a fee of $630. Please be aware that 8 C.F.R. § 103.5(a)(l)(i) requires that any motion must be filed within 30 days of the decision that the motion seeks to reconsider or reopen. Thank you,~PerryRhew Chief, Administrative Appeals Office www.uscis.gov
  10. 10. Page 2DISCUSSION: The Director, California Service Center, denied the preference visa petition. TheAdministrative Appeals Office (AAO) affirmed the directors decision on certification. The matter isnow before the AAO on a motion to reopen. The motion will be granted, the previous decision of theAAO will be affirmed and the petition will be denied.The petitioner seeks classification as an alien entrepreneur pursuant to section 203(b )(5) of theImmigration and Nationality Act (the Act), 8 U.S.C. § 1153(b)(5). The director determined that thepetitioner had failed to demonstrate a qualifying sustained investment in a new commercial enterprise.The director certified the decision denying the petition to the AAO pursuant to 8 C.P.R. § 103.4. TheAAO withdrew the directors concern that the commercial enterprise was not "new" as defined at8 C.P.R. § 204.6(e). The AAO also rejected the directors concern that the losses reflected on certaintax returns demonstrated that the petitioner was not sustaining his investment in the new commercialenterprise. Nevertheless, the AAO upheld the directors ultimate conclusion that the petitioner had notsustained his investment based on bank statements showing withdrawals of funds from the newcommercial enterprises account. The AAO also questioned whether the employment creating entitywas still a wholly owned subsidiary of the new commercial enterprise.On motion, the petitioner submits documentation explaining the withdrawal of funds. Counsel furtherasserts that the employment creating entity is an "affiliate" of the new commercial enterprise, arelationship that the regulations do not prohibit. For the reasons discussed below, the petitioner has nowovercome the AAOs concerns about the withdrawal of funds. Nevertheless, counsels assertions aboutthe affiliate nature of the employment creating entity confuse the structure of the business with therelationship of the business to the new commercial enterprise and, thus, are not persuasive.Section 203(b )(5)(A) of the Act, as amended by the 21st Century Department of Justice AppropriationsAuthorization Act, Pub. L. No. 107-273, 116 Stat. 1758 (2002), provides classification to qualifiedimmigrants seeking to enter the United States for the purpose of engaging in a new commercialenterprise: (i) in which such alien has invested (after the date of the enactment of the Immigration Act of 1990) or, is actively in the process of investing, capital in an amount not less than the amount specified in subparagraph (C), and (ii) which will benefit the United States economy and create full-time employment for not fewer than I 0 United States citizens or aliens lawfully admitted for permanent residence or other irmnigrants lawfully authorized to be employed in the United States (other than the immigrant and the immigrants spouse, sons, or daughters). petition is based on an investment in a business, located in a targeted employment area for which the required amountof capital invested has been adjusted downward. Thus, the required amount of capital in this case is$1,000,000.
  11. 11. Page 3INVESTMENT OF CAPITALThe regulation at 8 C.F.R. § 204.6(e) states, in pertinent part, that: Capital means cash, equipment, inventory, other tangible property, cash equivalents, and indebtedness secured by assets owned by the alien entrepreneur, provided the alien entrepreneur is personally and primarily liable and that the assets of the new commercial enterprise upon which the petition is based are not used to secure any of the indebtedness. * * * Invest means to contribute capital. A contribution of capital in exchange for a note, bond, convertible debt, obligation, or any other debt arrangement between the alien entrepreneur and the new commercial enterprise does not constitute a contribution of capital for the purposes of this part.The regulation at 8 C.F.R. § 204.6(j) states, in pertinent part, that: (2) To show that the petitioner has invested or is actively in the process of investing the required amount of capital, the petition must be accompanied by evidence that the petitioner has placed the required amount of capital at risk for the purpose of generating a return on the capital placed at risk. Evidence of mere intent to invest, or of prospective investment arrangements entailing no present commitment, will not suffice to show that the petitioner is actively in the process of investing. The alien must show actual commitment of the required amount of capital. Such evidence may include, but need not be limited to: (i) Bank statement(s) showing amount(s) deposited m United States business account( s) for the enterprise; (ii) Evidence of assets which have been purchased for use in the United States enterprise, including invoices, sales receipts, and purchase contracts containing sufficient information to identify such assets, their purchase costs, date of purchase, and purchasing entity; (iii) Evidence of property transferred from abroad for use in the United States enterprise, including United States Customs Service commercial entry documents, bills of lading and transit insurance policies containing ownership information and sufficient information to identify the property and to indicate the fair market value of such property; (iv) Evidence of monies transferred or committed to be transferred to the new commercial enterprise in exchange for shares of stock (voting or
  12. 12. Page 4 nonvoting, common or preferred). Such stock may not include terms requiring the new commercial enterprise to redeem it at the holders request; or (v) Evidence of any loan or mortgage agreement, promissory note, security agreement, or other evidence of borrowing which is secured by assets of the petitioner, other than those of the new commercial enterprise, and for which the petitioner is personally and primarily liable.The petitioner indicated on the Form I-526 petition, Part 3, that he made an initial investment of$175,000 on August 24, 2005 and that he had made a total investment of $1,029 ,070.84.The full amount of the requisite investment must be made available to the business most closelyresponsible for creating the employment upon which the petition is based. Matter Izummi,22 I&N Dec. I 179 (Commr. 1998). The employment generating entity was, at the time of filing, a~-owned subsidiary of the new commercialenterprise, Thus, the AAO accepted t h a t - was part of the commercial enterprise asdefined at 8 C.P.R. § 204.6(e) as of that date. In addition to complying with the definition ofcommercial enterprise, this relationship makes it easier to demonstrate a nexus between thepetitioners investment and job creation. The petitioner submitted the schedules K-1 accompanying - IRS Forms 1065. The petitioners schedule K-1 for 2006 reflects a capital investment of $89,970 and a withdrawal of that amount. In 2007, however, the petitioners schedule K-1 reflects a capital contribution of $1,029,041. While this schedule K-1 also reflects a decrease of$577,147, that decrease purports to represent the petitioners share of the companys losses. The separate and distinct line for "withdrawals and distributions" does not reflect that the petitioner withdrew any money in 2007. In addition, because the petitioner transferred his interest i~to-in 2007, his schedule K-1 for that year showed an ending capital balance of $0. The director noted that decrease in capital in- and the zero ending balance for the petitioners capital in and concluded that the petitioner had not sustained his investment. submitted a letter from - Senior Financial and Tax the firm that prepared the tax returns fo~and • • • correctly notes schedules K-1 f o r - show losses, not withdrawals. Inaddition, explains that the petitioners zero ending balance i n - reflects the changein ownership of that company. The petitioner submits his 2008 schedule K-1 fo~showing anadditional contribution of $684,630 during that year.• • • • • assertions are supported by the plain language of the schedules K-1. Thus, the AAOconcluded that the schedules K-1 in and of themselves do not suggest that the petitioner haswithdrawn any of his investment after 2006. Moreover, the petitioners lack of interest in would not be problematic. In fact, for the reasons stated below, the new commercialenterprise, , includes only wholly owned subsidiaries. As will be discussed below, however,
  13. 13. -Page 5- is no longer a wholly-owned subsidiary o f - and, thus, is no longer part of the new commercial enterprise.While the AAO concluded that the losses and transfers of capital from the subsidiary to the newcommercial enterprise were not disqualifying, the AAO raised concerns about the transfer of fundsrepresented on certain bank statements. The relevant bank statements reflect that as of June 22,2007, the petitioner had transferred t o - As of September 28, 2006, the petitionerhad transferred $650,000 to which went towards the construction of the restaurant. OnJune 28, 2007, however-transferred $1,000,000 to the petitioners checking account. On thesame date, he transferred those funds (in two transfers of $500,000 each) to his own personal moneymarket savings account. On July 12, 2007, the petitioner transferred the same amount (in twotransfers of $500,000 each) back to his checking account. On the same date, the petitionertransferred $1,000,000 to an unknown checking account. The AAO reviewed checkingaccount statement for July 2007, which did not reflect t h a t - was the recipient of the$1,000,000 transfer. Thus, the AAO concluded that the beneficiary of the July 12, 2007 transfer of$1,000,000 from the petitioners checking account is undocumented. On motion, counsel asserts that the petitioner spent more than $1,000,000 on construction and other costs; thus, "it is not logically feasible" to conclude that the petitioner did not sustain his investment. Counsel notes t h a t - is a holding company that serves to manage investments other than- Counsel asserts that the petitioner took out a loan in June 2007 by refinancing his condominium and transferred those funds t o - account to demonstrate sufficient funds for the construction of a new restaurant in Florida. Once the construction company was satisfied that the petitioner had sufficient funds, the petitioner transferred those funds to higher interest bearing accounts. Counsel asserts that these funds are unrelated to the petitioners investment i n - benefitting-The petitioner submitted evidence of the refinancing, relevant bank statements and other evidencesupporting counsels assertions. Thus, we concur that these funds are unrelated to the investment inllllii•through-COMMERCIAL ENTERPRISEThe regulation at 8 C.F.R. § 204.6(e) provides: Commercial enterprise means any for-profit activity formed for the ongoing conduct of lawful business including, but not limited to, a sole proprietorship, partnership (whether limited or general), holding company, joint venture, corporation, business trust, or other entity which may be publicly or privately owned. This definition includes a commercial enterprise consisting of a holding company and its wholly- owned subsidiaries, provided that each such subsidiary is engaged in a for-profit activity formed for the ongoing conduct of a lawful business. This definition shall not include a noncommercial activity such as owning and operating a personal residence.
  14. 14. Page 6 (Emphasis added.) On motion, counsel asserts that the petitioner owns 90 percent of b o t h - a n d - · making the two companies "affiliates." As noted by counsel, the petitioner previously submitted the management agreement through which- manages-. Counsel states that an affiliate is a corporation related to another corporation by shareholding or other means of control, a subsidiary or sibling corporation. Counsel further notes that affiliates are viable and qualifying corporate entities for another immigrant classification pursuant to section 203(b)(l)(C) of the Act. Counsel concludes that the "not limited to" language in the definition of commercial enterprise at 8 C.F.R. § 204.6(e) reveals that affiliates may be included as qualifying commercial enterprises. Counsel further asserts that the same definition excludes non-commercial activities but not affiliates. Finally, counsel asserts that the change in ownership is not a material change precluded under Matter of Izummi, 22 I&N Dec. at 175.This is the Counsel is not persuasive. The "not limited to" language relates to the types of business structures.critical key "Affiliate" is not a business structure but a modifier of that structure explaining its relationship topoint! other businesses. a n d - are both limited liability companies. These are appropriate structures. Significantly, the regulatory definition is not silent on affiliates. Rather, the definition of commercial enterprise specifies that wholly-owned subsidiaries are affiliates considered within a commercial enterprise. Thus, it is clear that other affiliates, including subsidiaries that are not wholly-owned and sibling companies, are not included in the definition of commercial enterprise. As the regulatory definition is not silent on affiliates, the final sentence of the definition excluding noncommercial enterprises does not suggest that the definition of commercial enterprise includes a company and all of its affiliates. Moreover, as the regulatory definition pertinent to the classification sought answers the question of which affiliates may be included, we need not attempt to extrapolate this information from regulations relating to other, unrelated classifications. On November 10, 2010, the AAO requested the complete 2009 tax returns, including all schedules K-1, for b o t h - and . The petitioner submitted the requested documents, which confirm that the petitioner owns 90 percent of both companies.- does not own any o f - . Thus, - i s not even a partially-owned subsidiary Matter of Izummi, 22 I&N Dec. at 175, addresses the situation where a petitioner makes a material change in an attempt to correct disqualifying factors. That case does not address situations where the employment generating entity was part of the commercial enterprise at the time of filing but is no longer part of the commercial enterprise. We find t h a t - is no longer part of the commercial enterprise and, thus, the investment in and employment at can no longer support the petition. The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. § 1361. The petitioner has not met that burden. Accordingly, the previous decision of the AAO will be affirmed, and the petition will be denied.
  15. 15. ORDER: The AAOs decision ofFebruary 18,2010 is affirmed. The petition is denied.

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