AAO Decisions for EB-5 Cases thus far Posted in 2013Compiled by Joseph P. Whalen (September 1, 2013)

Link to Decision Results, Excerpts, & CommentaryAPR012013_01B7203.pdf

Note that all the “B7”Decisions pre-datethe May 30, 2013,EB-5 AdjudicationsPolicy Memo and thatthe two “K1”Decisions post-datethe May 30, 2013,EB-5 AdjudicationsPolicy Memo.

APPEAL DISMISSED [I-526]

The petitioner seeks classification as anemployment creation alien pursuant to section203(b)(5) of the Immigration and Nationality Act(the Act), 8 U.S. C. § 1153(b)(5). The recordindicates that the petition is based on an investmenta raw materials trading business, in [REDACTED].The petitioner established in [REDACTED] as anew commercial enterprise (NCE) through thecreation of a new business. The petitionerpreviously indicated that the NCE might alsoengage in passive real estate investments. As theNCE ultimately abandoned that plan, the issue ofwhether those funds would be available for jobcreation is not before the AAO. The petitionerindicates within Part 2 of the Form I-526 that thebusiness is located in a targeted employment area(TEA). Thus, the petitioner claims that the requiredamount of capital investment is $500,000. Asdiscussed below, the AAO disagrees and finds thatthe required amount of capital in this case is$1,000,000.

The director determined that the petitioner hadfailed to demonstrate an at-risk investment andinferred that the NCE was a grossly overcapitalizedentity. The director also concluded that thepetitioner failed to demonstrate that the NCEwould meet the job creation requirements. For thereasons discussed below, the AAO dismisses thepetitioner's appeal, concluding that he has notdemonstrated that the invested capital was his ownor that the business plan sufficiently demonstratesthat the NCE will generate the requisite number ofjobs 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 hisfather-in-law; (2) documentation establishing thefamilial relationship between the petitioner and hisfather-in-law; (3) evidence regarding the lawfulsource of the invested funds to include evidencerelating to the father-in-law's income, anddocumentation of the transfer of funds; (4) theNCE's corporate documents, business permit, leaseagreement, business plan, escrow agreementrelating to a permanent business location; and (5)evidence purporting to demonstrate that the placeof business is located within a TEA.

On December 7, 2011, the director issued· a requestfor evidence (RFE). Specifically, the directorrequested: (1) evidence that the petitioner's capitalwas an at-risk ·investment; and (2) a comprehensivebusiness plan that demonstrates the NCE has thepotential to meet the job creation requirements.The petitioner responded on January 23, 2012, withadditional documentation.

On February 27, 2012, the director denied thepetition determining that the petitioner had failedto demonstrate that his investment was at-riskwithin the NCE and inferred that the estimatedstartup cost of $1,155,000 noted in the businessplan did not seem necessary. The director impliedthat the NCE was a grossly overcapitalized entity.The director also concluded that the petitioner'sbusiness model noted in the business plan did notjustify the need to hire four sales representatives orto fill the total claimed 11 full-time positions.

On March 29, 2012, the petitioner filed an appealwith U.S. Citizenship and Immigration Services(USCIS). On appeal, counsel asserts that thedirector's findings that the petitioner's investment

was not an at-risk investment is "superfluous to theregulatory requirements" and that the petitioner'scomprehensive business plan sufficientlydemonstrated that the NCE would meet theregulatory job creation requirement.

* * * * *

The director determined that the petitioner hadfailed to demonstrate that his capital contributed tothe NCE was an at-risk investment. The AAOaffirms the director's ultimate conclusion based onthe following reasoning.

At the time of filing the petition, the petitioner hadplaced his funds into the NCE's bank accounts, buthe had not engaged in any business activity."Simply formulating an idea for future businessactivity without taking meaningful concrete action,is similarly insufficient for a petitioner to meet theat-risk requirement. Before it can be said thatcapital made available to a commercial enterprisehas been placed at risk, a petitioner must presentsome evidence of the actual undertaking of businessactivity; otherwise, no assurance exists that thefunds will in fact be used to carry out the businessof the commercial enterprise." Matter of Ho, 22I&N Dec. 206, 210 (Assoc. Comm'r 1998). Also atthe time of filing the petition, the petitionerretained control over the NCE's business accountsas he possessed a 90 percent interest in the NCE. "Amere deposit into a corporate money-marketaccount, such that the petitioner himself stillexercises sole control over the funds, hardlyqualifies as an active, at-risk investment." Matter ofHo, 22 I&N Dec. at 209-210. Although thepetitioner had entered into a lease agreement inwhich the NCE would operate, this is insufficient todemonstrate his capital was at risk. Matter of Ho,22 I&N Dec. at 210 (the de minimis action ofsigning a lease does not demonstrate that fundsalready transferred to the new commercialenterprise are at risk).

Furthermore, the contracts the petitionerprovided postdate the petition filing date andcannot be relied upon to establish his eligibility. Apetitioner must establish the elements for theapproval of the petition at the time of filing thepetition. 8 C.F.R §§ 103.2(b) (1), (12). A petitionmay not be approved if the petitioner was notqualified at the priority date, but expects to becomeeligible at a subsequent time. See Matter ofKatigbak, 14 I&N Dec. 45, 49 (Reg'l Comm'r 1971)

Within her decision, the director inferred that theNCE was overcapitalized by stating:

[A]lthough it is not USCIS' prerogative todetermine whether a company should lease orpurchase its place of business, and the fact that[the NCE] chose to purchase one, it does notseem that the [$1,155,000] startup capital listedin the business plan was necessary. USCIScannot conclude that a grossly overcapitalizedcompany demonstrates a fully at-riskinvestment.

Funds invested in a grossly overcapitalizedcompany with insufficient capital expendituresforecasted are not at risk. See Al Humaid v. Roark,1

2010 WL 308750, *4 (N.D. Tex. Jan. 26, 2010). Thecourt in the Al Humaid decision was concerned thatthe plaintiff was the sole director and shareholder,thereby exercising control over the allegedlyinvested funds. The court also expressed concernthat the plaintiffs business documents allowed himto abolish the reserve accounts in which theinvested funds rested, and that the business plandid not anticipate costs that would utilize thereserve funds.

The NCE's Operating Agreement, Article III:Capital Contributions, signed on February 8, 2011,

1 See also the AAO Decision that was challenged in court:

http://www.slideshare.net/BigJoe5/h-a-k-co-humaid-e-b-5-a-a-o-dismissal-apr202009-02b7203

identified the capital accounts the NCE wouldutilize as follows:

4. CAPITAL ACCOUNTS. A shall be establishedby the Company for each Member. The capitalaccount shall consist of:

a) The amount of the Member's CapitalContributions to the Company includingthe fair market value of any property socontributed to the Company ordistributed by the Company to theMember.

Additionally, item number five of the documenttitled, ''Unanimous Written Consent of theMembers of [REDCATED]'' states:

The following resolutions and actions areadopted relating to a depository of the funds ofthe corporation and relating to the authorizationof Managers and Members of the Company todeal with the Company’s funds: ...

(b) To open, keep and close general andspecial bank accounts, including generaldeposit accounts, payroll-accounts andworking fund accounts, with any suchdepository . . . .

The NCE's company register reflects that thepetitioner owns a 90 percent controlling interest inthe NCE, with [REDACTED] owning the remainingten percent. These documents establish that thepetitioner exercised control over the funds that heinvested in the NCE. As of November 30, 2011, theNCE's two bank accounts with [REDACTED]contained $1,233,925. Although the business planprovided projected expenses covering a five-yearperiod, the petitioner has not demonstrated theneed for such capital on hand to cover operatingcosts over the next five years. The profits areprojected to increase considerably each year thatthe NCE operates. Furthermore, the petitioner hasnot shown that all of the required funds in the two

bank accounts will be made available for jobcreation. Funds infused into an NCE must be madeavailable for job creation to be considered capitalplaced at risk for the purpose of generating a returnon the capital being placed at risk. Matter ofIzummi, 22 I&N Dec. 169, 189 (Assoc. Comm'r1998). The NCE is grossly overcapitalized given theabsence of any explanation as to how the investedcash will be used for capital expenses or to coveroperating losses early on. Thus, the petitioner didnot place his funds in an at-risk investment for thepurpose of generating a return on the capital beingplaced at risk.

As noted within the below section relating to theNCE being located in a TEA, the required amountof capital to be invested in the NCE is $1,000,000.The petitioner must demonstrate that as of thepetition filing date, he has placed the requiredamount of capital at risk for the purpose ofgenerating a return on the capital placed at risk. 8§ C.F.R. 204.6(j)(2).

The petitioner has failed to demonstrate that he hasplaced the required amount of capital at risk as hemaintained control over the accounts in which hisinvested funds resided and the new commercialenterprise had engaged in only de minimis activityas of the date of filing the petition. As such, hecannot 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 typesof evidence that must accompany a petition for thepetitioner to demonstrate that the ten qualifyingemployees have already been hired following theestablishment of the NCE, or if the employment-creation requirement has not been satisfied prior tofiling the petition, the petitioner must submit a"comprehensive business plan" which demonstratesthat "due to the nature and projected size of the

new commercial enterprise, the need for not fewerthan ten (10) qualifying employees will result,including approximate dates, within the next twoyears, and when such employees will be hired." Tobe considered comprehensive, a business plan mustbe sufficiently detailed to permit USCIS toreasonably conclude that the enterprise has thepotential to meet the job creation requirements.Matter of Ho, 22 I&N Dec. at 206.

After relying on a more detailed description of theelements of a comprehensive plan identified inMatter of Ho, 22 I&N Dec. at 212-213, the directorconcluded that the petitioner had not establishedthat his business model ''justifies the need to hirefour sales representatives let alone fill 11 full-timepositions."

It keeps getting juicier from here on out, it isa must read non-precedent Administrative

Decision.

APR012013_02B7203.pdf 3RD MOTION DISMISSED [I-526]

DISCUSSION: The Director, California ServiceCenter, denied the employment-based immigrantvisa petition on November 17, 2009. TheAdministrative Appeals Office (AAO) dismissed thepetitioner's appeal of that decision on July 8, 2010.The petitioner filed a subsequent motion on theAAO's decision, which it dismissed on January 10,2012. The petitioner then filed a second motion,which the AAO dismissed on September 14, 2012 .2

The matter is now before the AAO on a thirdmotion . The motion to reconsider will bedismissed. The motion to reopen will be dismissed.

I. LAW

The petitioner has been notified within theSeptember 14, 2012 motion decision that any

2 This decision is not posted as of this writing.

motion must be: "Accompanied by a statementabout whether or not the validity of the unfavorabledecision has been or is the subject of any judicialproceeding and, if so, the court, nature, date, andstatus or result of the proceeding." 8 C.F.R. §103.5(a)(1). Yet, even within this motion, thepetitioner failed to include such a statement. Theregulation at 8 C.F.R. § 103.5(a)(4) requires that"[a] motion that does not meet applicablerequirements shall be dismissed. As such, themotion must be dismissed pursuant to theregulation at 8 C.F.R. § 103.5(a)(4) without regardto the claims contained within the motion.Notwithstanding this failure, the filing does nototherwise meet the requirements for either amotion to reconsider or a motion to reopen.

A motion to reconsider must state the reasons forreconsideration and be supported by any pertinentprecedent decisions to establish that the decisionwas based on an incorrect application of law orUSCIS policy. 8 C.F .R. § 1 03.5(a)(3). The Board ofImmigration Appeals (BIA) generally providesthat a motion to reconsider asserts that at the timeof the previous decision, an error was made. Itquestions the decision for alleged errors inappraising the facts and the law. The very nature ofa motion to reconsider is that the original decisionwas defective in some regard. See Matter of Cerna,20 I&N Dec. 399, 402 (BIA 1991). A motion toreconsider is based on the existing record andpetitioners may not introduce new facts or newevidence relative to their arguments.

Additionally, a motion to reconsider cannot beused to raise a legal argument that could have beenraised earlier in the proceedings. See Matter ofMedrano, 20 I&N Dec. 216, 220 (BIA 1990, 1991).Rather, the "additional legal arguments" that maybe raised in a motion to reconsider should flowfrom new law or a de novo legal determination·reached in its decision that could not have beenaddressed by the party. Further, a motion to

reconsider is not a process by which a party maysubmit, in essence, the same brief presented onappeal and seek reconsideration by generallyalleging error in the prior decision. Matter ofO-S-G, 24 I&N Dec. 56, 58 (BIA 2006). Instead, themoving party must specify the factual and legalissues raised on appeal that were decided in error oroverlooked in the initial decision or must show howa change in law materially affects the priordecision. Id. at 60.

A motion to reopen proceedings, however, afundamentally different motion. Matter of Cerna,20 I&N Dec. at 402. (citing Sanchez v. INS, 707F.2d 1523, 1529 (D.C.Cir. 1983); Chudshevid v.INS, 641 F.2d 780, 783 (9th Cir.l981)). It does notcontest the correctness of (or simply request areevaluation of) the prior decision on the previousfactual record. Rather, a motion to reopenproceedings seeks to reopen proceedings so thatnew evidence can be presented and so that a newdecision can be entered, normally after a furtherevidentiary hearing. Matter of Cerna, 20 I&N Dec.at 403.

This Decision may serve as somewhat of aPrimer on Motions to AAO and USCIS

Directors across-the board.

APR032013_01B7203.pdf APPEAL DISMISSED [I-526]

The petitioner seeks classification· as anemployment creation alien pursuant to section203(b)(5) of the Immigration and Nationality Act(the Act), 8 U.S.C. § 1153(b)(5). The recordindicated that the petition is based on aninvestment in an existing business that underwent arestructuring resulting in the creation of a newcommercial enterprise (NCE), [REDACTED]. Thepetitioner amended the business strategy frombeing a salvage yard to providing wholesale andretail sales of recycled original equipment

manufacturer (OEM) automobile parts. Thepetitioner purchased the building and assets ofthe former owner and in a separate transaction,and from a separate party, purchased the landupon which the existing business resided. As thepetitioner has not provided sufficient evidence toestablish that the NCE is within a targetedemployment area, the required amount of capital inthis case is $1 million. For the reasons discussedbelow, including serious discrepancies among thetax documentation for assets and wages, the AAOwill dismiss the appeal.

II. PROCEDURAL AND FACTUAL HISTORY

The petitioner filed the petition on January 20,2011, supported by evidence relating to thefollowing issues (1) the establishment of the NCE;(2) the restructuring of the business; (3) aNovember 12, 2010 letter from [REDACTED],Director of the Labor Market Statistics Center atFlorida's Agency for Workforce Innovation (AWI)relating to the NCE 's location within a TEA; ( 4) theamount of capital the petitioner invested; (5) thelawful source of the invested funds; and (6)the.creation of jobs as required by the statute andregulation.

On January 6, 2012, the director issued a notice ofintent to deny (NOID). Specifically, the directornoted the following deficiencies: (1) the petitionerchecked the box indicating theNCE was not locatedin a TEA but counsel asserted that the NCE wassituated within a TEA; (2) the petitioner appearedto have purchased the relevant assets with fundsearned from the operation of theNCE, which is nota qualifying investment; (3) the record did notestablish the requisite job creation; and (4) thepetitioner had not established that he had invested$1 million of his own funds into theNCE. Thepetitioner responded on February 8, 2012, withadditional documentation, including a January 23,2012, letter from [REDACTED] Director of theLabor Market Statistics Center, now part of the

Florida Department of Economic Opportunity;compiled financial statements; and anorganizational chart.

On April 2, 2012, the director· denied the petitiondetermining that the petitioner had failed todemonstrate: (1) that theNCE was located within aTEA; .(2) a qualifying at-risk investment of $1 .million: (3) that the funds invested in theNCE wereobtained through lawful means; and (4) that theNCE would create at least ten full-time positions forqualifying employees.

On April 30, 2012, the petitioner filed an appealwith U.S. Citizenship and Immigration Services(USCIS). On counsel asserts: (1) the petitioner hasinvested .capital in the NCE in excess of $1 million;(2) the director erred in her determination thattheNCE was not located in a TEA; (3) the directormisapplied the law by failing to recognize that thepetitioner was in the process of investing therequired capital; ( 4) the petitioner demonstratedthat his invested. funds derived from a lawfulsource; and (5)" that the petitioner haddemonstrated the requisite job creation For thereasons discussed below, including seriousdiscrepancies on the tax documentation relating toassets and wages, the AAO finds that the petitionerhas not overcome the director' s grounds for denial.

The deep discussion and analysis from AAOwhile parsing the evidence is most

enlightening, informative, somewhattedious, and takes up the next

approximately 11 pages.

APR032013_02B7203.pdf APPEAL DISMISSED [I-526]

The petitioner seekS classification as anemployment creation alien pursuant to section203(b)(5) of the Immigration and Nationality Act(the Act), 8 U.S.C. § 1153(b)(5). The petition isbased on an investment in [REDACTED], a car

conversion business, located in Anaheim. CaliforniaCounsel indicated· in his initial memorandum insupport ofthe petition that "is involved in ...the business of exporting automobiles (mostlyluxury cars) to China in accordance with customers'specialized requests for said automobiles." Thepetitioner indicated on part 2 of the petition thatthe business is not located in a targetedemployment area Thus, the required amount ofcapital in this case is $1,000,000.

In her July 12, 2012 decision, the director deniedthe petition on two grounds: (1) the petitioner failedto demonstrate that he has placed the requiredamount of capital at-risk for the purpose ofgenerating a return on the capital; and (2) thepetitioner failed to establish that the claimedinvestment has created or will create at least 10full-time positions for qualifying employees.

On appeal, the petitioner submits a statement andadditional evidence. For the reasons discussedbelow, the petitioner has not overcome either of tliedirector's two grounds for deniaL In addition, thepetitioner has failed to document the lawful sourceof the required amount of capital. The appeal willtherefore be dismissed.

The highly detailed discussion presentedfrom 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 petitionis based on an investment in an existing business,[REDACTED] that is located in a targetedemployment area for which the required amount ofcapital invested has been adjusted downward.[REDACTED] incorporated [REDACTED] onJanuary 8, 2008. According to the petitioner'sForm I-526, Immigrant Petition by Alien

Entrepreneur, the petitioner's investment wasintended to fund a trading and real estate business.

The director determined that the petitioner failed todemonstrate that she had placed the requiredamount of capital at risk in the new commercialenterprise, and the petitioner failed to establishthat her investment in the new commercialenterprise would create at least 10 new full-timedirect positions to qualifying employees. On appeal,the petitioner asserts that the director failed to fullyconsider all of the evidence under the totality of thecircumstances. For the reasons discussed below, thepetitioner has not overcome the director's groundsfor denial.

The highly redacted pages that follow(pages 3-11) shred the evidence that was

initially submitted, submitted in response tothe Director’s RFE, and on appeal.

APR152013_02B7203.pdf APPEAL DISMISSED [I-526]

The petitioner seeks classification as anemployment creation alien pursuant to 203(b )(5)of the Immigration and Nationality Act (the Act), 8U.S.C. § 1153(b)(5). The petition is based on aninvestment in [REDACTED], a business located in[REDACTED] San Joaquin County, California.According to its business plan, the "exclusiveobjective of this business is the export of Californiawines to China." The petitioner indicated on part 2of the petition that the business was located in atargeted employment area. The record containsinconsistent claims regarding the location of thebusiness. Specifically, the Form I-526 andOperating Agreement list an address on[REDACTED] the bank statements, invoices andbusiness contracts reflect counsel's address; and thepetitioner submitted a lease for yet a third addresson [REDACTED] on appeal. Nevertheless, all threeof the addresses are located within San Joaquin

County, which the petitioner has established is atargeted employment area. Thus, while theinconsistent addresses are an issue, the requiredamount of capital in this matter is $500,000.

In her September 5, 2012 decision, the directordenied the petition on the grounds that: (1) thepetitioner failed to establish that he has placed therequired amount of capital at risk for the purposeof generating a return; and (2) the petitioner failedto establish that the claimed investment has createdor will create at least 10 full-time positions forqualifying employees.

On appeal, the petitioner submits a brief fromcounsel and additional evidence. For the reasonsdiscussed below, the petitioner has not overcomeeither of the director's grounds of denial. Inaddition; the petitioner has failed to document thelawful source of the required amount of capital.The appeal will therefore be dismissed.

Pages 2 through 10 tell a complex tale whichwould make more sense if it were not so

heavily redacted. I must question some ofthe redactions. In particular, the ones that

make paragraphs or even entire pagesunintelligible. Good Luck!

APR162013_01B7203.pdf APPEAL DISMISSED [I-526]

The petitioner seeks classification as anemployment creation alien pursuant to section203(b)(5) of the Immigration and Nationality Act(the Act), 8 U.S.C. § 1153(b)(5). The recordindicates that the petition is based on an investmentin a business, [REDACTED]. The required amountof capital in this case is $1,000,000. The newcommercial enterprise (NCE), [REDACTED], is afuneral home, which assists in funeral planning andrelated services.

The director determined that the petitioner hadfailed to demonstrate that he has invested or is

actively in the process of investing the requiredamount of capital, that the qualifying funds arelawfully obtained funds, and that he had created 10full-time jobs.

On appeal, counsel asserts that U.S. Citizenshipand Immigration Services (USCIS) failed to applythe proper standard of proof in making itsdetermination. Counsel maintains that USCIS erredby denying the petitioner's claim of creating 10 jobsfor qualified employees. Counsel further assertsthat USCIS erred in denying that the petitionerinvested or is actively in the process of investing therequired investment amount and that theinvestment capital came from lawfully acquiredfunds. In addition, counsel asserts that USCISerroneously determined that the petitioner had notestablished that the business is a new entity ratherthan a previously existing business. For the reasonsdiscussed below, the petitioner has not overcomethe director's grounds for denial.

AAO’s thorough dissection and intensediscussion and analysis begins at the

bottom of page 2 and doe not end until thebottom of page 12. While the redaction is

again annoying, I’ve seen worse and I amsure you have too.

APR162013_02B7203.pdf APPEAL DISMISSED [I-526]

The petitioner seeks classification as anemployment creation alien pursuant to section203(b)(5) of the Immigration and Nationality Act(the Act), 8 U.S.C. § 1153(b)(5). The petition isbased on an investment in [REDACTED] thatpurchased the [REDACTED] in Great Bend,Kansas, on August 23, 2011. The petitionerindicated 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 18, 2012 decision, the director deniedthe petition, finding that the petitioner failed toestablish that the claimed equity investment hascreated or will create at least 10 full-time positionsfor qualifying employees. On APPEAL, thepetitioner submits a four-page statement andadditional documents. The petitioner noted on page1 of the Form I-290B, Notice of Appeal or Motion,filed on August 10, 2012, that he would submit abrief and/or additional evidence to the AAO within30 days. As of the date of this decision, the AAO hasreceived nothing further. The appeal therefore, willbe adjudicated based on evidence currently in therecord, including the materials the petitionersubmitted on appeal.

For the reasons discussed below, the AAO finds thatthe petitioner has not overcome the director'sground for denial. In addition, the petitioner hasfailed to document the lawful source of the claimedequity investment or that the job-creating entity is"new." The appeal will therefore be dismissed.

AAO’s dissection, discussion, and analysisbegins 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 eyestrain or a headache.

APR172013_01B7203.pdf

Related Case found here. Thatcase was discussed in my MayEB-5 Newsletter found here.

APPEAL DISMISSED [I-526]

[This investor is filing through a Projectfrom Chicagoland Foreign Investment

Group (CFIG) Regional Center.]

The record contains conflicting informationrelating to the·name of the petitioner and the nameof the new commercial enterprise (NCE). The FormI-526 reflected that the petitioner's name isREDACTED] and that theNCE is the [REDACTED].The initial filing statement heading also indicated

the investor's name as the petitioner; however, thebody of the statement named someone else as theinvestor and [REDACTED] as the NCE. The initialfiling statement repeatedly referred to[REDACTED] but failed to mention [REDACTED]at any point in the statement. Although thepetitioner named on the Form I-526 was mentionedin the heading, none of the claims within the bodyof this statement will be considered to apply to thepresent petition based on the fact that the body ofthe initial filing statement pertained to an alien thatis not the petitioner. The exhibit list submitted withthe petition, however, did relate to the petitioner.Despite references to [REDACTED], theNCE is[REDACTED], the entity listed on the petition andthe ultimate recipient of the petitioner's funds.

The petitioner lists counsel's address as the addressof the NCE. [REDACTED] proposes to loan allinvested funds to [REDACTED], which, accordingto page five of the Private Placement Memorandum,''has been formed to renovate a historic building inthe City of Aurora Illinois and convert it intomemory care assisted living units for senior citizenswith Alzheimer, dementia, and related illnesses." Asthe petitioner has demonstrated that, at the timeshe filed the petition, theNCE was within a targetedemployment area, the required amount of capital inthis case is $500,000.

* * * * *II. PROCEDURAL AND FACTUAL HISTORY

The petitioner filed the petition on June 21, 2010,supported bv the following types of evidence: (1) aSubscription Agreement and an Escrow Agreementrelating to [REDACTED] (2) an Advisory Agreementand an Operating Agreement relating to[REDACTED]; (3) a TEA letter relating to thelocation of the assisted living facility; (4) documentsrelating to the lawful source of the petitioner'sinvested capital; and (5) identity documents.

On March 16, 2011, the director issued a request forevidence (RFE). Specifically, the director requested:

(1) evidence that the required amount of capital hadbeen invested; (2) that this capital was placed atrisk within the NCE; (3) evidence of ownership oftheNCE; and (4) that the petitioner's investedcapital was obtained through lawful means. Thepetitioner responded on June 8, 2011, withadditional documentation to include evidence ofmonetary transactions that occurred after thepetition's filing date and new escrow andsubscription agreements pertaining to[REDACTED].

On August 23, 2011, the director denied the petitiondetermining that the petitioner had failed todemonstrate that the required amount of capitalwas invested in or that it was placed at risk withinthe NCE, and that she had failed to demonstrate thelawful source of the invested funds pertaining to theregulations of the Office of Foreign Assets Control(OFAC). The petitioner has established that herinvestment does not violate any executive orders orOFAC regulations relating to sanctions againstIran.

On September 22, 2011, the petitioner filed anappeal with U.S. Citizenship and ImmigrationServices (USCIS). On appeal, counsel asserted: (1)the petitioner demonstrated that she was actively inthe process of investing the requisite funds and thatthe required capital had. been committed to theNCE; (2) the petitioner had established that thecapital was at risk within theNCE; and (3) thepetitioner had demonstrated that.her investedcapital was obtained through lawful means.

* * * * *It is clear from the above regulatory languagethat a direct nexus must be present whenconsidering the capital and the NCE. Therefore,counsel's position is not persuasive that thepetitioner had committed her investment capital inaccordance with the regulation at 8 C.F.R. §204.6(j)(2). Counsel also refers to judicial opinionsthat relate to other areas of law not pertaining to

immigration. Specifically, these cases relate towhether the petitioner retained control over fundsshe had placed in escrow rather than to which ofthe two funds they were committed. Significantly,while CFIG may be affiliated with both[REDACTED] and [REDACTED] and a party toboth escrow agreements, the escrow agreementprovides that the funds would be released to[REDACTED] in the event of approval and thepetitioner signed a subscription agreement for[REDACTED]. None of the cases counsel citesaddress this particular issue. It remains that therelevant precedent, Matter of Izummi, 22 I&NDec. at 179, and the regulation at 8 § 204.6(j)(2)require that the funds be committed to the jobcreating entity.

In response to the director's RFE, the petitionerdocumented the transfer of$100,000 from the[REDACTED] escrow account to the [REDACTED]escrow account on May 17, 2011. This transactionoccurred after the petition filing date and is not incompliance with the regulation at 8 C.F.R. § 204.6(j)(2), which requires that the petitionerdemonstrate the full required amount of capitaleither already be in the NCE or be committed to it.In order for any claimed investments to bepermissible, the petitioner must demonstrate thatany capital invested after the priority date wascommitted to the NCE as of that date. 8 C.F.R. §204.6(j)(2). A petitioner must establish eligibility atthe time of filing the/ petition; a petition cannot beapproved at a future date after the petitionerbecomes eligible under a new set of facts. See 8C.F.R. § 103.2(b)(12); Matter of Katigbak, 14 I&NDec. 45, 49 (Reg'l Comm'r 1971); see Matter ofIzummi, 22 I&N Dec. at 175.

The "mere intent to invest ... will not suffice to showthat the petitioner is actively in the process ofinvesting." 8 C.F.R. § 204.60)(2). "An actualcommitment does not exist if the petitioner's assetsare 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 documentedthat her capital was committed to or secured for theinvestment in the NCE as of the date of filing thepetition.

The entirety of AAO’s dissection, discussionand analysis of the evidence and law which

is merely sampled here begins on page 3 andcontinues through page 7.

APR222013_01B7203.pdf APPEAL DISMISSED [I-526]

...The record indicates that the petition is based onan investment in. a new commercial enterprise(NCE), [REDACTED]. As the area in which the NCEis principally doing business was designated as atargeted employment area (TEA) at the time ofinvestment, the required amount of capital in thiscase is $500,000. According to the business plan,the NCE engages in purchasing and refurbishingused printing machinery within the United States,subsequently selling the machinery overseas.

The director determined that the petitioner hadfailed to demonstrate that the NCE would createthe minimum number of qualifying employees andthat the business model did not support the needfor the full-time services often employees. ·

On appeal, counsel asserted that the submittedevidence sufficiently established the NCE wouldcreate the requisite number of jobs and that thedirector violated the regulations when she relied onderogatory information, within the decision, towhich the petitioner did not have an opportunity torespond. For the reasons discussed below, the AAOfinds that the petitioner has not demonstratedeligibility for the classification sought, both forreasons identified by the director as well as foradditional insufficiencies.

AAO’s entire dissection, discussion, andanalysis takes up about 8 pages. Have fun

with it.

APR302013_01B7203.pdf APPEAL DISMISSED [I-526]

The petitioner seeks classification as anemployment creation alien pursuant to section203(b)(5) of the Immigration· and Nationality Act(the Act), 8 U.S.C. § 1153(b)(5). The petition isbased on an investment in [REDACTED], arestaurant located in San Gabriel, California. FN1

The petitioner indicated on part 2 of the petitionthat the business is not located in a targetedemployment area. Thus, the required amount ofequity investment is $1,000,000.

In her August 17, 2012 decision, the director deniedthe petition, finding that the petitioner failed toshow that he placed the full amount of the claimedequity investment at risk for the purpose ofgenerating a return. For the reasons discussedbelow, the petitioner has not overcome thedirector's ground for denial. Moreover, thepetitioner has failed to demonstrate that hisclaimed investment has created or will create atleast 10 full-time positions for qualified employees,or demonstrate the lawful source of his funds.__________FN1 On appeal, the petitioner submitted a Certificateof Amendment of Articles of Incorporation, filed withCalifornia's Office of the Secretary of State on August21,1012, 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 changeoccurred 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! Youcan’t get away with anything that is not 100%

above board. Those folks are not afraid tocontact the FBI, OFAC, SEC, or various otherFederal or State agencies and blow you in!

DECISIONS DATEDAFTER THE MAY 30,

2013, EB-5ADJUDICATIONS

POLICY MEMO

TWO REGIONAL CENTER DENIALS AREOVERTURNED AND APPROVED BASED ONAPPLICATION OF THE ACKNOWLEDGED

CHANGE IN POLICY, CITING TO THEMAY 30, 2013 POLICY MEMO.

JUN122013_01K1610.pdf RC AMENDMENT DENIAL WITHDRAWNEXPANSION AMENDMENT APPROVED

III. ANALYSISFor the reasons set forth below, the applicant hasprovided sufficient evidence of a general proposalbased on general predictions to establish that theamendment request is approvable.

A. Requirement to File Regional CenterAmendments

The regulation at 8 C.F.R. § 204.6(m)(3) providesthe evidentiary requirements for regional centerswishing to participate in the Immigrant InvestorPilot Program. Page 23 of EB-5 AdjudicationsPolicy, PM-602-0083 (May 30, 2013), discussesamendments to regional center designations andstates:

Such formal amendments to the regionalcenter designation, however, are not requiredwhen a regional center changes its industriesof focus, its geographic boundaries, itsbusiness plans, or its economicmethodologies. A regional center may elect topursue an amendment if it seeks certainty inadvance that such changes will bepermissible to USCIS before they areadjudicated at the I-526 stage, but theregional center is not required to do so.

Thus, the applicant was not required to file theinstant amendment request. While not required,the applicant has, in fact, filed the request.Therefore, the merits of that request are discussedbelow.

B. General Proposal and GeneralPredictions

The applicant has not filed an exemplar or arequest for approval of an actual investmentproject. Instead, the applicant has filed anamendment request for hypothetical projects, suchas a coffee company that desires to branch out intothe home and office delivery business. Page 14 ofEB-5 Adjudications Policy, PM-602-0083 (May 30,2013), provides:

The level of verifiable detail required for a[regional center proposal] to be approvedand provided deference may vary dependingon the nature of the [regional centerproposal]. If the [regional center proposal]projects are "hypothetical" projects, generalproposals and general predictions may besufficient to determine that the proposedregional center will more likely than notpromote economic growth, improvedregional productivity, job creation, andincreased domestic capital investment.Determinations based on hypotheticalprojects, however, will not receive deferenceand the actual projects on which the FormI-526 petitions will be based will receive denovo review during the subsequent filing(e.g., an amended [regional center proposal]including the actual project details or thefirst Form I-526 petition filed by an investorunder the regional center project).

The record contains a general proposal based onCensus Bureau and other data and generalpredictions concerning the kinds of commercialenterprises that will receive capital, the direct andindirect jobs that will be created as a result of suchcapital investments based on RIMS II data andmultipliers, and other positive economic effects.Thus, the AAO withdraws the director's concerns.

JUL192013_01K1610.pdf RC PROPOSAL DENIAL WITHDRAWN,INITIAL DESIGNATION APPROVED ON

CERTIFICATION

DISCUSSION: The Director, California ServiceCenter, denied the proposal for designation as aregional center on June 15, 2011. The matter is nowbefore the Administrative Appeals Office (AAO) oncertification pursuant to 8 C.F.R. § 103.4. Thedirector's decision will be withdrawn and theproposal for designation as a regional center will beapproved. The matter is returned to the director forissuance of a formal letter to the applicantconsistent with this decision.

* * * * *The director determined that the applicant had notprovided a business plan with verifiable detailregarding how the proposal will create sufficientjobs. The director denied the proposal accordinglyand certified the matter to the AAO. The directorafforded the applicant 30 days to supplement therecord. The applicant's response is now part of therecord.

On August 17, 2012, prior counsel withdrew ascounsel.

For the reasons discussed below, the AAO willwithdraw the director's determination.

* * * * *

III. ANALYSIS

The applicant seeks regional center designationbased solely on a hypothetical project to establish[REDACTED] funds that will invest in the[REDACTED] and distribution of unidentified[REDACTED]. The applicant concedes oncertification, through prior counsel, that theregional center proposal is not based on an actualproject and does not include an exemplar I-526petition. 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 approvedand provided deference may vary dependingon the nature of the [regional centerproposal]. If the [regional center proposal]projects are "hypothetical" projects, generalproposals and general predictions may besufficient to determine that the proposedregional center will more likely than notpromote economic growth, improvedregional productivity, job creation, andincreased domestic capital investment.

The record contains a general proposal based ongeneral predictions concerning the kinds ofcommercial enterprises that will receive capital, thejobs that will be created as a result of suchcapital investments based on RIMS II data andmultipliers, and other positive economic effects. Asthe record contains a general proposal, theapplicant is not required to submit letters of intentor commitment from the prospective sources ofmatching funds for regional center designation. 1Thus, the AAO withdraws the director'sdetermination.

While the proposal for designation as a regionalcenter is approved, it is based on hypotheticalprojects. Determinations based on hypotheticalprojects will not receive deference, and the actualprojects on which the Form I-526 petitions will bebased will receive de novo review in a subsequentfiling (e.g., an amended Form I -924 applicationincluding the actual project details or the first FormI-526 petition filed by an investor under theregional center project). See EB-5 AdjudicationsPolicy, PM-602-0083, page 14 (May 30, 2013).

IV. CONCLUSION

In application proceedings, it is the applicant's

burden to establish eligibility for the immigrationbenefit sought. See, e.g., section 291 of the Act, 8U.S.C. § 1361. Here, that burden has been met.Accordingly, the decision of the director denyingthe proposal for designation as a regional centerwill be withdrawn and the proposal approved. Thematter is returned to the director for issuance of aformal approval letter consistent with this decision.

ORDER: The director's decision dated June 15,2011 is withdrawn. The applicant's proposal fordesignation as a regional center is approved.

Keep an eye out for an article analyzing those two

Regional Center Decisions posted after the issuance of the

May 30, 2013, EB-5 Adjudications Policy Memo.

e-mail me at: joseph.whalen774@gmail.com or call 716-604-4233