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Joe Whalen’s EB-5 Roundup January 27, 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
Some Pros and Cons of “Stand-Alone” EB-5 Investments
If I go it alone, I am the “Boss”! I am the policy maker and I can implement my own vision! Great, but then you are also left holding the bag and are responsible for EVERYTHING!
EB-5 is not for a “mom-n-pop” operation. Not only must you eventually show proof of ten (10) full-time permanent jobs for qualifying U.S. employees; you, your spouse, sons and daughter (regardless of age or marital status)—don’t count! You cannot add together your “part-time” employees or count them at all. ALL the ten (10) required jobs must be your own “on-the-books” work authorized “direct” employees. Unlike a Regional Center affiliated investor, NO “indirect” jobs count for anything!
True “Stand-Alone” investing under EB-5 is best left to a real entrepreneur with vision and a product, process, or service unlike anyone else in that field OR in a field with tons of room for growth, even if the EB-5 is not truly unique as long as sufficient jobs can be created.
Stand-Alone investing does not always mean going it alone. Stand-Alone is used synonymously with “Regular” or “non-affiliated” (meaning not affiliated with a Regional Center). EB-5 investors are allowed to take on partners even outside the context of a Regional Center. Those partners might be other EB-5 investors, domestic investors, or other foreign investors who are NOT seeking an EB-5 visa. The drawback of partnering with other EB-5 investors is that each EB-5 investor must be able to claim ten (10) qualifying full-time employees apiece. Two (2) investors need twenty (20) employees, three (3) need thirty (30), etc... The flipside of that is that any jobs created do NOT have
to be allocated to any partner who is NOT seeking an EB-5 visa. So if a single EB-5 investor partners with two, or five, or ten non-EB-5 investors then ALL jobs created by the group can be used by the single EB-5 investor to lift the conditions from status for him/herself, a spouse, and their kids.
Joseph P. Whalen e-mail: [email protected] or [email protected]
TWO Key Building Blocks for Regional Center Proposals
The Business Plan (BP) must come first. The BP is the primary source of categories for required data to be used as input into an Econometric Methodology or Model in order to produce a viable Economic Analysis (EA). That EA will contain job creation predictions (or projections). It is that credible final job count that will determine how many EB-5 investors that any project will support. The BP is, of course, project-specific. That might be a real, actual, “shovel-ready” project or it might be an exemplar or representative project demonstrating “the kinds of commercial enterprises that will receive capital from aliens” [§610(a) (Appropriations Act 1993) or 8 USC §1153 Note]. I will build on these themes at a presentations at the April 27, 2012, Event in NYC. See more at: http://www.eb5newyorksummit.org/ and Register here: http://newyorksummit.eventbrite.com/ & See me at: http://eb5news.blogspot.com/
Joe Whalen has years of experience in immigration adjudication. He is most responsible for growing the EB-5 Regional Center Program from obscurity into a thriving growth industry.
Joe Whalen’s EB-5 Roundup February 19, 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
Tenant-Occupancy Methodology
Announcement from USCIS
On Friday February 17, 2012, USCIS sent out a
message concerning EB-5. They entitled it “Tenant
Occupancy” and the major points are laid out
below.
For purposes of the job creation requirement
numerous I-924 Applications have utilized
what has been commonly termed a “tenant-
occupancy” methodology.
The “tenant-occupancy” methodology seeks
credit for job creation by independent tenant
businesses that lease space in buildings
developed with EB-5 funding.
USCIS continues to recognize that whether
it is economically reasonable to attribute
such “tenant-occupancy” jobs to the
underlying EB-5 commercial real estate
project is a fact-specific question.
Each case filed will depend on the specific
facts presented and the accompanying
economic analysis.
USCIS adjudications will continue to be
made on a case-by-case basis.
USCIS does not intend to revisit factual
findings.
I-526, Immigrant Petitions by Alien
Entrepreneurs and I-829, Petitions by
Entrepreneurs to Remove Conditions will
have predictability in connection with early
regional center adjudications.
I find the message strange and wonder why it was
sent. Is it some type of “heads-up” for an
impending onslaught of RFEs, NOIDs, and/or
Denials? I must wonder if, in fact, a huge number
of piss-poor Regional Center Proposals were filed
in a mad rush in an attempt to beat the I-924 Fee.
Has USCIS been sitting on a pile of crap for a year
wondering what to do?
My best guess is that this issue boils down to
mostly a NEXUS problem but they didn’t know
what to call it. An additional problem is likely to be
an overabundance of poor quality Business Plans
and associated substandard Economic Analyses
based upon them. I urge folks to re-read Matter of
Izummi and my various articles on EB-5 money-to-
jobs Nexus. I ask that once these promised RFEs
come along that folks share the contents.
Joseph P. Whalen e-mail: [email protected] or
Upcoming In-Person Events
I will be discussing the latest developments in EB-5
especially to do with Regional Centers at two
presentations in April. I will serve as a faculty
member at the American Immigration Lawyers
Association (AILA) 2012 EB-5 Investor &
Regional Centers Conference: A Practice Skills
Workshop to be held Friday - Saturday, April 20-
21, 2012 at the Atlantis Resort Hotel in Nassau,
Bahamas. Please check the AILA EB-5 Conference
webpage for the Event Agenda. AILA has filed for
CLE and specialized credit in all jurisdictions with
mandatory CLE and specialized requirements.
Registrations Information is found here.
The following week I will present at the Friday
April 27, 2012, Event in NYC. See more at:
http://www.eb5newyorksummit.org/ and
Register here:
http://newyorksummit.eventbrite.com/ &
See me at: http://eb5news.blogspot.com/
Joe Whalen has years of
experience in immigration
adjudication. He is most
responsible for growing the
EB-5 Regional Center
Program from obscurity into
a thriving growth industry.
Joe Whalen’s EB-5 Roundup March 5, 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
There is More to the EB-5 Immigration
Pilot Program than Regional Centers
Some folks have begun to panic needlessly. The EB-5
Immigration Pilot Program is not about to come to a
sudden demise. The Customer-Base has blossomed and
in their enthusiasm, some folks have cast their nets too
widely, prematurely, or in an empty pond. I see some
underlying issues that folks need to closely consider
before venturing into EB-5 or re-examine prior to filing
any challenges to CSC via Motions or AAO via Appeals.
Not all the plans currently seeing RFEs are worth
fighting for “as is”. It may be more practical and
economical to withdraw and file a new application later.
There are some fundamental misconceptions floating
about that practitioners (as well as USCIS) need to meet
head on and put to rest once and for all.
What is the True Nature of the
Immigration Pilot Program?
To date, we have all been fooled (including yours truly)
into referring to this visa pathway as the Immigrant
Investor Pilot Program. That is what INS named it in the
regulations. However, if you closely read the statute and
follow the threads (cross-references) it should be called
the Employment Creation Visa Pilot Program. 1
The Regional Center is a fundamental prerequisite
component of the EB-5 Pilot Program. A Regional
Center Proposal may be somewhat “general” but with
enough specificity as to: the kinds of commercial
enterprises that will receive capital from aliens, a
limited geographic area, as well as the direct and
indirect jobs, and the other positive economic effects
such capital investments will have.
In addition, the Pilot Program allows the EB-5 investors
(through their Regional Center partners’ efforts) to
establish reasonable methodologies for determining the
number of jobs created. The preceding criteria have all
been pulled directly from the statute so are of paramount
importance to the successful establishment of a Regional
Center.
1 See http://www.slideshare.net/BigJoe5/what-is-the-
immigration-pilot-program
Small-Scale, Single Project Regional
Centers Need Not Apply!
If you believe the statute, then in order to obtain
approval as a Regional Center in the first place, you
cannot start too small as in with a single kind of
commercial enterprise. Some USCIS adjudicators seem
as confused about that issue as the would-be Regional
Center applicants.
If you start with only one very limited possibility and it
fails then you’re dead from the start with nowhere to go.
In addition, the Regional Center is not supposed to be a
short-term, single-project investment scheme with little
or no growth potential.
What would be the point of placing the Regional Center
into a Program if a single-shot developer could get
Regional Center Designation and allow EB-5 investors
to use it as a means to include indirect jobs for a single
project and then close its doors? It would defeat the
Congressional Intent of creating an on-going Program
comprised of a new business infrastructure consisting of
Regional Centers as a conduit to drawing foreign
investors into the U.S. economy. At least that’s how I
see it.
I can see one large-scale, multi-faceted, mixed-use
project2 as a starting point upon which a Regional Center
entity can “cut its teeth” because it would address
multiple components. For example, a first effort might
include: retail space, food and beverage operations,
transient housing, various types of office space, various
service businesses, and/or an entertainment venue
(theatre). If a huge factory is being built, it is likely to
require specific infrastructure developments to support
it. Rail spurs, docks, road building and maintenance,
utilities expansion, sanitation projects, services to the
new workforce as well as the new business. Additional
independent projects that utilized any one or a
combination of the various “kinds of commercial
enterprises” already addressed would then be available
for additional investment opportunities.
2 See http://www.slideshare.net/BigJoe5/rc-affilated-eb5-
structure-option
Joe Whalen’s EB-5 Roundup March 5, 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
Piggybacking Efforts vs. Stolen Glory;
and Too Much Risk Avoidance in EB-5
The next problem that I can readily see are situations
where the RC hangs back searching for a project that has
already broken ground. If you wait until too late in the
project before committing to it, there is not much left for
you to take credit for. Now, here are some possibly and
hopefully useful clichés to help you see this point better.
These first few relate to timing :
The early bird gets the worm. (Right to claim
early created jobs.)
Arriving [too] late to the party. (Too few jobs
created after joining in.)
Missing the boat. (Trying to buy-in to a
completed project.)
Haste makes waste. (Committing TOO early to a
low job-yield project.)
Life is passing you by. (Again, trying to buy-in
to a completed project.)
These next few clichés relate to nexus3:
Riding coattails. (Piggybacking off someone
else’s success in a good way.)
Building a foundation. (Creating job creation
opportunities for your “project partners”.)
Stolen glory. (Piggybacking off someone else’s
success in a bad way.)
Someone “standing on your shoulders” vs. you
“standing on theirs”. (Need to strike a balance.)
So how does any of that relate to a Regional Center?
Risk avoidance is a natural instinct. Unfortunately, in
EB-5 at any rate, too much risk avoidance defeats the
Congressional Intent of the Regional Center Program.
Congress chose to reward aliens with visas for taking a
chance on the United States through their efforts to
increase employment opportunities and otherwise
promote economic growth. Congress did not envision
allowing aliens to usurp the successes of someone else
and “buy” a well-advanced or completed project and
3 See http://www.slideshare.net/BigJoe5/how-many-kinds-of-
nexus-can-you-find-within-eb5
take credit for the jobs already created by someone else’s
efforts. So, if a Regional Center wants to count and
allocate the jobs from day one, they need to be
committed at the groundbreaking or almost immediately
thereafter. This is not to say that the Regional Center
must obtain all of its EB-5 investors prior to breaking
ground, merely that the Regional Center be committed to
the project it wishes to promote to aliens seeking EB-5
visas early enough in order to reasonably lay claim to
those early jobs. It is also in these early commitment
situations where the various potential financial
maneuvers need to be laid out to USCIS. The Regional
Center is more free to be creative than many incorrectly
believe.
Joseph P. Whalen e-mail: [email protected] or
Upcoming In-Person Events
I will be discussing the latest developments in EB-5
especially to do with Regional Centers at two presentations
in April. I will serve as a faculty member at the American
Immigration Lawyers Association (AILA) 2012 EB-5
Investor & Regional Centers Conference: A Practice
Skills Workshop to be held Friday - Saturday, April 20-
21, 2012 at the Atlantis Resort Hotel in Nassau, Bahamas.
Please check the AILA EB-5 Conference webpage for the
Event Agenda. AILA has filed for CLE and specialized
credit in all jurisdictions with mandatory CLE and
specialized requirements. Registrations Information is
found here.
The following week I will present at the Friday April 27,
2012, Event in NYC. See more at:
http://www.eb5newyorksummit.org/ and
Register here: http://newyorksummit.eventbrite.com/ &
See me at: http://eb5news.blogspot.com/
Joe Whalen has years of
experience in immigration
adjudication. He is most
responsible for growing
the EB-5 Regional Center
Program from obscurity
into a thriving growth
industry.
Joe Whalen’s EB-5 Roundup April 1, 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
“Best Practices”: Key to EB-5 Investors’
& Regional Center’s Success
I urge folks to adopt “best practices” in whatever they do
but running a Regional Center (RC) is an area where
folks still need to identify what those “best practices”
are. Far too often RC sponsors have poured all their
effort into just being designated and only paid lip-service
to their plans for later compliance and paid even less
attention to the “Designees’ Responsibilities” listed on
the older Approval Notices. Admittedly, the initial
attempt to give RC sponsors an idea of what information
to track was a bit wordy and confusing. However, the
creation of the Form I-924A also falls short of success.
I ask that everybody take a step back and ask
themselves: “What did Congress ask for in the first
place?” It seems that Congress created a program to spur
overall regional economic growth and job creation in
order to aid their districts and States. With that in mind,
they want to know how many and what kinds of jobs are
being created (or preserved) and what segments of the
economy (industries) in their districts and States are
being helped by the efforts of these Regional Centers.
The I-924 Application asks the applicant to identify the
various “kinds of commercial enterprises that will
receive capital from aliens” as well as the “jobs that will
be created”...“and other economic effects such capital
investment will have”. 8 USC § 1153 note or § 610 (a).
The I-924 asks for the NAICS codes for the “industrial
categories” that are discussed in the comprehensive,
detailed, and credible Business Plan. These might be:
hotels, restaurant, medical clinics, office buildings, retail
stores, or factories. Some of those may be described by
what kinds of tenants that the buildings will house;
medical vs. legal professional offices; or clothing vs.
hardware vs. grocery retail stores. The NAICS codes
that support the plan and the job projections are what I
believe Congress; the American people; academics;
think-tanks; the various local, state and federal agencies;
and the media want reported. That is what I would want
to know about.
However, contrary to what everyone would want to
know about, the I-924A Supplement asks for NAICS
codes that describe the actual legal entities that can be
named and supported with specific documentation.
USCIS was too obsessed with “verifiable detail” for its
own or anyone’s good. It is quite possible and probable
that the actual entities that are being handed the aliens’
money will be some kind of intermediary player such
as a “lender”, “project financer” or a “project developer”
such as a “construction company”. USCIS needs to
revisit the I-924A, and Congress & the Regional Center
Industry need to speak up about this issue.
Be Proactive and Creative & Adapt!
The Treasury Department has just published “Proposed
Guidance on Leveraged Lending” in the Federal Register
which may be of some use to the Regional Center
Industry. See 77 FR 19417-19424 (03/31/2012).
The proposed guidance describes expectations for the
sound risk management of leveraged finance activities,
including the importance of institutions developing and
maintaining:
Transactions that are structured to reflect a
sound business premise, an appropriate capital
structure, and reasonable cash flow and balance
sheet leverage. Combined with supportable
performance projections, these considerations
should clearly support a borrower's capacity to
repay and de-lever to a sustainable level over a
reasonable period, whether underwritten to hold
or distribute.
A definition of leveraged finance that
facilitates consistent application across all
business lines.
Well-defined underwriting standards that,
among other things, define acceptable leverage
levels and describe amortization expectations for
senior and subordinate debt.
A credit limit and concentration framework
that is consistent with the institution's risk
appetite.
Sound MIS that enable management to
identify, aggregate, and monitor leveraged
exposures and comply with policy across all
business lines.
Strong pipeline management policies and
procedures that, among other things, provide for
real-time information on exposures and limits,
and exceptions to the timing of expected
distributions and approved hold levels.
Joe Whalen’s EB-5 Roundup April 1, 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
Don’t Let EB-5 RC History Repeat Itself!
When the EB-5 Visa was new and then the
Regional Center was created, many things went
wrong very fast and the program collapsed. It has
only recently made a comeback and I see some
unsavory things happening. Unless serious efforts
are made, EB-5 may collapse again.
That said, it is not hopeless. Good projects still
exist. Workable methodologies are out there. There
are viable Regional Centers in-place and more will
come on board. Don’t give up hope but at the same
time, don’t turn a blind eye.
Lawsuits: As American as Apple Pie of
course, apple pie was imported from England.
And so it begins .....
Zhen et al. v. SDRC, Inc. et al., CIV. 11-4148-KES
(So. Dist. So. Dakota), Filed: October 18, 2011
http://eb5info.com/system/documents/209/original/
Zhen_v_SDRC.pdf?1331404066
These plaintiffs say that information was withheld
from the Private Placement Memorandum (PPM).
While the investor has a duty to perform Due
Diligence, the PPM is supposed to contain a full and
honest disclosure. It is not a case of “he said he
said” when it is in writing or conspicuously absent.
An Order Dismissing a Motion to Dismiss was
already issued. More plaintiffs were added later and
within the time allowed for amending the
Complaint and there had been no responsive
pleading.
Sumpter et al. v. Hungerford et al., No. 12-717
(E.D. Louisiana) Filed: March 15, 2012
http://dockets.justia.com/docket/louisiana/laedce/2:
2012cv00717/149902/
These plaintiffs say that their money has been
grossly mismanaged, diverted via fraud, and that the
defendants have been unjustly enriched at plaintiffs’
expense through duplicitous means.
An Order Dismissing an ex parte Motion for
Preliminary Injunction was already issued, w/o
prejudice. The plaintiffs seek receivership to
protect what little assets may be left but as the
expedited discovery Motion was referred to a
Magistrate Judge, receivership was deemed
premature.
Joseph P. Whalen e-mail: [email protected] or
Upcoming In-Person Events
I will be discussing the latest developments in EB-5
especially to do with Regional Centers at two presentations
in April. I will serve as a faculty member at the American
Immigration Lawyers Association (AILA) 2012 EB-5
Investor & Regional Centers Conference: A Practice
Skills Workshop to be held Friday - Saturday, April 20-
21, 2012 at the Atlantis Resort Hotel in Nassau, Bahamas.
Please check the AILA EB-5 Conference webpage for the
Event Agenda. AILA has filed for CLE and specialized
credit in all jurisdictions with mandatory CLE and
specialized requirements. Registrations Information is
found here.
The following week I will present at the Friday April 27,
2012, Event in NYC. See more at:
http://www.eb5newyorksummit.org/ and
Register here: http://newyorksummit.eventbrite.com/ &
See me at: http://eb5news.blogspot.com/
Joe Whalen has years of
experience in immigration
adjudication. He is most
responsible for growing
the EB-5 Regional Center
Program from obscurity
into a thriving growth
industry.
Joe Whalen’s EB-5 Roundup May 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
“Sufficient Nexus” Is The Critical Key To Each & Every Regional Center-Affiliated
EB-5 Investors’ Success
I suggest that the RC’s business plan writer try to think like a journalist and emulate Jack Webb’s character from Dragnet. Specifically, strive to clearly state “just the facts, ma’am” in the classic journalistic style of: “Who, What, Where, When, Why, and How”. Remember the following questions are only a starting point and expansion is welcome. Lastly, while enough specificity is required, overly restricting & constricting yourself is not.
Here are some factors to address when building & presenting the case for nexus:
1) Who created, is in the process of creating, or will be creating the new jobs? [Alternatively, preserving jobs is OK and preservation can be combined with new job creation under certain defined and qualifying circumstances.]
2) What are the palpable and palatable connections between THOSE jobs and THAT EB-5 money and/or the efforts of the EB-5 investors and their Regional Center? What mechanisms or documentation will demonstrate these facts? [Clearly state your assumptions and expectations up front in order to set the stage to prove it later on at the back end! The I-829 will need evidence to prove predictions & substantiate fulfillment of the previously stated & defined conditions precedent needed to show the project’s success.]
3) Where are the jobs located (in which businesses and in which geographic location)?
4) When will the EB-5 money be committed or when was that money committed? When were the jobs created, or when are the jobs going to be created? When were all funds committed and/or obligated to the overall project? In other words, when did the Regional Center commit itself and its investors to the overall project?
5) Why should THOSE jobs count for THESE EB-5 investors?
6) How are the various participants interdependent on each other in the ultimate success or failure of the overall project? Bridge financing anyone?
REASONABLE RATES FOR TRAINING & CONSULTATION!
Your Business Plan Is Your Blueprint For Your Economic Analysis
Don’t leave your economist in a lurch! If you fail to be specific about what your economist needs to address, (s)he might not provide you with a useful economic analysis. You would not allow your home-builder to work without blueprints. In that same vein, tell your economist what his/her “work product” must address and accomplish. There are specific items listed in the EB-5 laws that must be included and addressed. Your business plan writer is the architect in this effort, and your economist is the contractor. When you order a pizza, you decide which toppings you want on it, right?
Joseph P. Whalen e-mail: [email protected] or [email protected]
Recent In-Person Events
I discussed the latest developments in EB-5 especially to do with Regional Centers at two presentations in April. I served as a faculty member at the American Immigration Lawyers Association (AILA) 2012 EB-5 Investor & Regional Centers Conference: A Practice Skills Workshop held Friday - Saturday, April 20-21, 2012 at the Atlantis Resort Hotel in Nassau, Bahamas. Please check the AILA EB-5 Conference webpage for the Event Agenda. AILA filed for CLE and specialized credit in all jurisdictions with mandatory CLE and specialized requirements. AILA has posted some items. The following week I presented at the Friday April 27, 2012, Event in NYC. See my Powerpoint Presentation at: http://www.slideshare.net/BigJoe5/nyc-eb5-presentation-april-27th-2012 and http://www.eb5newyorksummit.org/
Joe Whalen has years of experience in immigration adjudication. He is most responsible for growing the EB-5 Regional Center Program from obscurity into a thriving growth industry.
Joe Whalen’s EB-5 Roundup June 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
“The Waiting Game” S. 3245: To Permanently Reauthorize the EB–5
Regional Center Program, etc...
Senators Leahy and Grassley introduced the latest bill to make EB-5 Regional Centers permanent on May 24, 2012. There is also a 3-year extension included in the DHS Appropriations bill as a backup plan. Please voice your support to your Congressional representative in the House and Senate. See: http://createsend.com/t/r-BFAA92139C2F89FE or http://www.congress.org/news/ to get started! Read the text of the bill at: http://www.slideshare.net/BigJoe5/s-324-permanant-extensions This bill would make four immigration programs permanent and thus strong opposition to one could defeat them all.
Some of My EB-5 and Conceptual Articles And Postings of Interest
1) An Essay on Indebtedness as Capital for an EB-5 Investment is here.
2) An Essay on the Original INS View of the EB-5 Visa Requirements is here.
3) An Essay on the EB-5 “Visa” as an Entitlement is here.
4) An Essay on the Within the Scope Analysis for EB-5 I-829s is here.
5) An Essay on Issue Preclusion or Collateral Estoppel in EB-5 Tenant Occupancy Methodology is here.
6) Lists of My Published Articles are: here, here, and here. [52 as of this posting.]
7) My Treatise on the Historical Development of the Immigrant Investor Visa is here.
8) An essay on Initial Evidence and the Prima Facie Case is here.
9) An Essay on Threshold Issues and Case Development is here and a follow-up on the Back-End Burden of Proof is here.
10) My Presentation from the April 2012, NYC EB-5 Summit is here.
11) My Suggested Changes to 8 CFR § 204.6 (m) are found here.
12) My Thoughts on the Value of & How to Utilize an I-526 Exemplar are here.
REASONABLE RATES FOR TRAINING & CONSULTATION!
Lawsuit Updates
Zhen et al v. SDRC, Inc. et al Joint MOTION to Dismiss Voluntarily Without Prejudice All Claims, Counterclaims, and Third-Party Claims by All Parties. I sure hope they worked things out! Sumpter et al v. Hungerford et al continues to progress with a huge number of filings back and forth already in the docket and more on the way. Chicagoland Foreign Investment Group, LLC v. Napolitano et al, (N.D. IL, filed 4/10/12) is merely a Writ of Mandamus. I have no details but can guess that they probably have a project that they want to get rolling on! After all, a Writ of Mandamus is a request to speed things up! Good Luck to them in that effort!
Speak Up Now to Fix the I-924!
USCIS published a Federal Register Information Collection Request (ICR) Notice on May 10, 2012. You may submit your comments on the I-924, Application for Regional Center Under the Immigrant Investor Pilot Program, via email at [email protected]. Comments are encouraged and will be accepted for 60 days until July 9, 2012. IF changes will be made at this time, USCIS will inform us in the 30-day follow-up Notice after reviewing comments.
Joseph P. Whalen e-mail: [email protected] or [email protected]
Joe Whalen has years of experience in immigration adjudication. He is most responsible for growing the EB-5 Regional Center Program from obscurity into a thriving growth industry.
Joe Whalen’s EB-5 Roundup July 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
“Stand-Alone” or Non-Regional Center EB-5 Investors Need Help Too!
While it is true that the vast majority of EB-5 investment does happen within the context of a Regional Center, it is not at 100%. The typical Regional Center EB-5 investor is just that, an investor rather than a true entrepreneur. The original EB-5 visa was an outgrowth of an earlier “labor certification exemption” crafted through regulations by INS in 1966-67, interpreting a type of special immigrant under the 1966 INA Amendments (spearheaded by the late Senator Edward “Ted” Kennedy).
The 1966 Act referred to an undefined group of “other qualified immigrants” who did not need and therefore did not require a labor certification from the Secretary of Labor. The Attorney General exercised the bulk of authority under the INA via INS. Using the broad powers to create regulations necessary to implement the provisions of the law, INS promulgated 8 CFR § 212.8 (b)(4) which pertained to “an alien who will engage in a commercial or agricultural enterprise in which he had invested or is actively in the process of investing a substantial amount of capital”.
That single phrase in an old regulation eventually expanded several times, fell out of use, and was revived as EB-5 in the 1990 Immigration Act (IMMACT90). The “basic” EB-5 Visa requirements have not changed much with the notable exception of dropping “exports” as an essential component. That said, what are the basic requirements for this visa?
Here are the factors to address when applying for a “stand-alone” EB-5 visa:
1) Have enough money to invest and be able to demonstrate that it is your own lawful funds; &
2) Submit evidence that you already created 10 full-time permanent jobs for qualifying employees; or
3) Submit a comprehensive, detailed, and credible Business Plan to create the required 10 permanent full-time jobs for qualifying employees within the time allowed until you have to submit the petition to lift conditions.
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Your Business Plan Is Your Blueprint For Your Successful I-526 Petition Approval
Your Business Plan (BP) must be in accord with the AAO Precedent Decision in Matter of Ho, 22 I&N Dec. 206, 213 (Assoc. Comm’r, Exams 1998):
“...To be “comprehensive,” a business plan must be sufficiently detailed to permit the Service to draw reasonable inferences about the job-creation potential. Mere conclusory assertions do not enable the Service to determine whether the job-creation projections are any more reliable than hopeful speculation.
A comprehensive business plan as contemplated by the regulations should contain, at a minimum, a description of the business, its products and/or services, and its objectives. The plan should contain a market analysis, including the names of competing businesses and their relative strengths and weaknesses, a comparison of the competition’s products and pricing structures, and a description of the target market/prospective customers of the new commercial enterprise. The plan should list the required permits and licenses obtained. If applicable, it should describe the manufacturing or production process, the materials required, and the supply sources. The plan should detail any contracts executed for the supply of materials and/or the distribution of products. It should discuss the marketing strategy of the business, including pricing, advertising, and servicing. The plan should set forth the business’s organizational structure and its personnel’s experience. It should explain the business’s staffing requirements and contain a timetable for hiring, as well as job descriptions for all positions. It should contain sales, cost, and income projections and detail the bases therefor. Most importantly, the business plan must be credible.” [Bold in Original.]
Joseph P. Whalen e-mail: [email protected] or [email protected]
Joe Whalen has years of experience in immigration adjudication. He is most responsible for growing the EB-5 Regional Center Program from obscurity into a thriving growth industry.
Joe Whalen’s EB-5 Roundup August 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
My Article: “Different Reviews for Different Underlying INA Proceedings”
was the most accessed article in Immigration Daily “Top Five” list for July 2012.
Evidently, I say something that folks show interest in or they would not bother to read what I write. In the previous month, my article “Some EB-5 Facts That Have Been Forgotten” was in the number 2 spot on the June 2012 list published on July 2nd. That’s pretty good considering it was initially published on June 28th. My article “Discussing District Court Standards In Reviewing USCIS Denials Of Certain Applications & Petitions” which was originally published on May 4th, was listed at number 3 on the list of June 4, 2012.
Slow Follow-Up & Stats from USCIS
USCIS is attempting to continually improve its outreach and public engagement efforts. EB-5 would appear to be a shining example, or would it? They still keep us waiting until the last moment for the statistics. The stats are not really explained in any practical way (or in any way at all). We then see the stats twisted to support a point of view based on wild assumptions, misperceptions and misconceptions. “Antis” flout the dismal absence of any success of EB-5 investments. “Pros” might warp the numbers as representing the maximum possible achievements and overstating the bottom line results. In general, the immigration practitioners misstate the true timelines from one step to the next. That is usually because the don’t understand the process and fail to take into account the realities of that process.
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EB-5 Lawsuit Updates
Sumpter et al v. Hungerford et al continues to progress with a huge number of filings back and forth already in the docket and more on the way. I checked on August 1, 2012 and the PACER Docket is up to 103 items filed.
Chicagoland Foreign Investment Group, LLC v. Napolitano et al, (N.D. IL, filed 4/10/12) is merely a Writ of Mandamus. I have no details but can guess that they probably have a project that they want to get
rolling on! After all, a Writ of Mandamus is a request to speed things up! Good Luck to them in that effort! Chicagoland filed a Notice of Voluntary Dismissal on June 18, 2012. I again have no details but it’s over and I for one did not see any major media reports of scandals about this!
Speak Up Now to Help Shape the Future
USCIS has advertised for a large contingent of attorneys and economists for various programs and especially EB-5. They have also advertised for an EB-5 Program Chief. The next iteration of the “MEMO” has yet to see the light of day despite the prior assertions that it is almost ready for posting. Wake me up when something hits the scene.
Joseph P. Whalen e-mail: [email protected] or [email protected]
In Other INA News
I have noticed several recent decisions from the Circuit Courts of Appeals discussing the lack of follow up to the creation of DHS and the shift of statutory authority under the INA. The failure to keep pace with change is not new. It has been a problem forever and a day and likely always will be. I previously noted some of this in past articles as well. Here are but a very few samples:
• Nijjar v. Holder (9th Cir. Aug. 1, 2012) • BIA Dismissal of DHS Appeal Actually
Supports DHS Leadership • Different Reviews for Different Underlying INA
Proceedings and more.....
Joe Whalen has years of experience in immigration adjudication. He is most responsible for growing the EB-5 Regional Center Program from obscurity into a thriving growth industry.
Joe Whalen’s EB-5 Roundup September 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
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Latest Big EB-5 News EB-5 Investor Sues USCIS for Denying His I-829 Chung et al v. USCIS et al was filed in the Central District of California on August 21, 2012. The EB-5 investor in the failed South Dakota Dairy Farm is suing USCIS over their refusal to lift conditions and termination of his and his family’s status. I find it disingenuous to claim that USCIS is heightening the evidence standard by verifying the documentary evidence that was submitted to it. That's like saying USCIS should not be allowed to discover fraud being perpetrated on it! A bunch of USCIS Notices and Decisions have been plucked from the court records and posted here. Look here for a new essay soon! EB-5 Investor Arrested Over Dirty Money Issues Israeli national Ofer Biton was busted by the FBI due to financial shenanigans connected to his EB-5 investment. The complaint does not identify any Regional Center or any particular EB-5 funded project. This case has grabbed headlines NOT because of the EB-5 aspect but rather because he was associated with a Member of Congress and acted as a fundraiser. I have to wonder if there is any criminality associated with that activity as well as the EB-5 Visa Fraud Charge that was actually lodged against him? I also have to wonder if the EB-5 Visa Fraud charge was merely the expedient means to locking him up while they look at “other” and perhaps “more serious” crimes? It’s just a guess!
EB-5 Lawsuit Update
Sumpter et al v. Hungerford et al continues to progress with a huge number of filings back and forth already in the docket and more on the way. I checked on September 2, 2012, and the PACER Docket is up to over 115 items filed. One of them is the Defendants’ Motion to Dismiss. Read it if you care, ignore it you don’t.
Speak Up Now to Help Shape the Future
USCIS has published in the Federal Register, an extension of the I-924 and I-924A Information
Collection it began back on May 10, 2012. An “Information Collection” can encompass mundane activities. This is a Notice that announced a desire to extend these two forms “as is” without change. I for one say they NEED CHANGES! I previously spoke out asking others to make suggestions on how to improve the form during the first round of this Information Collection. Only AILA submitted a comment on July 9, 2012 (the last day to comment on prior 60-day Notice). USCIS asked again and extended the deadline to submit comments here until September 20, 2012. In the alternative you can submit comments by regular (snail-mail) or e-mail to: [email protected] and/or to [email protected]. I have submitted some comments here and here. Where are YOURS?
Joseph P. Whalen e-mail: [email protected] or [email protected]
In Other News
I have continued to watch the Courts, FR, BIA, & AAO for anything new of interest. Many of the items inspire an essay or article. I post at the websites linked in the footer and submit many for publication in Immigration Daily from ILW.com. Incidentally, many of my articles are now found on ILW’s EB-5 page. Here are a few of my most recent essays posted on my Slideshare pages:
• Current State of EB-5 • Dirty Money & Tainted Investors Ruin EB-5... • Deference in Immigration Matters: ...... • Double Speak In Action.... • Further Discussion....RC...Licensure • ...Business PlanWriter... • ...EB-5...Confusion About Exemplars • ...Wave of the Future...
Joe Whalen has years of experience in immigration adjudication. He is most responsible for growing the EB-5 Regional Center Program from obscurity into a thriving growth industry.
Joe Whalen’s EB-5 Roundup September EXTRA 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
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Latest Big EB-5 News AAO Posts 3 Regional Center Appeal Dismissals While the dates of these AAO non-precedential Administrative Decisions are rather old, I first saw them on the USCIS website on September 12, 2012. For those who do not know about such things as FOIA/PA, just know that there are steps that must be followed before decisions may be posted. Additionally, cases can drag on and on while details get sorted out. I say, just be glad we have more decisions posted at all, things will get better as long as we have something to learn from. I have re-posted these AAO Decisions w/comments added and wrote essays inspired by them. Here are links: January 18, 2011 Dismissal Posted Essay November 23, 2010 Dismissal Posted Essay November 10, 2010 Dismissal Posted Essay Bonus: Regional Center Application Balancing Acts
Upcoming EB-5 Engagement
Today (9/17/12) is USCIS’ “Deadline” for submitting “Agenda Items & Questions” for the October 16, 2012, Stakeholder Engagement, speak up and submit something, please. I don’t put much stock in these deadlines because it makes little to no difference if it is met or not. If USCIS wants to answer a question they will even if it is late. USCIS will also gladly ignore a concern even if it meets their “Deadline”. That said, I submitted items: Part I and Part II. The second item was also specifically submitted to the CIS Ombudsman, please send any of your EB-5 concerns as well.
Speak Up Now to Help Shape the Future: Time Is RUNNING OUT!
USCIS has published in the Federal Register, an extension of the I-924 and I-924A Information Collection it began back on May 10, 2012. An “Information Collection” can encompass mundane activities. This is a Notice that announced a desire to extend these two forms “as is” without change. I for one say they NEED CHANGES! I previously spoke out asking others to make suggestions on how to improve
the form during the first round of this Information Collection. Only AILA submitted a comment on July 9, 2012 (the last day to comment on prior 60-day Notice). USCIS asked again and extended the deadline to submit comments here until September 20, 2012. In the alternative you can submit comments by regular (snail-mail) or e-mail to: [email protected] and/or to [email protected]. I have submitted several comments. Where are YOURS?
Joseph P. Whalen e-mail: [email protected] or [email protected]
In Other News
The House followed the Senate and extended the Pilot Program through Sept. 30, 2015. I have continued to watch the Courts, FR, BIA, & AAO for anything new of interest. Many of the items inspire an essay or article. I post at the websites linked in the footer and submit many for publication in Immigration Daily from ILW.com. Incidentally, many of my articles are now found on ILW’s EB-5 page. Here are a few of my most recent essays posted on my Slideshare pages:
• PROHIBITED Divide and Conquer Analysis • Multiple Prongs & Multiple Steps • EB-5 Fraud Exposed and Defeated • RC as Last Addition to Economic Infrastructure • Regional Center’s RESPONSIBILITIES • Dirty Money & Tainted Investors Ruin EB-5... • Deference in Immigration Matters: ...... • Double Speak In Action.... • Further Discussion....RC...Licensure • ...Business PlanWriter... • ...EB-5...Confusion About Exemplars • ...Wave of the Future... • On I-485 “Appeals”
Joe Whalen has years of experience in immigration adjudication. He is most responsible for growing the EB-5 Regional Center Program from obscurity into a thriving growth industry.
Joe Whalen’s EB-5 Roundup October 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
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Latest Big EB-5 News EB-5 Regional Center Program, No Longer Pilot The House followed the Senate and extended the Pilot Program through Sept. 30, 2015. The President signed it on September 28, 2012. The word “pilot” has been struck from the law and the program was reauthorized under the section heading “EB-5 Regional Center Program”. I wrote about it here. Defining “Tenant-Occupancy” Methodology? The complaint in Carlsson et al. v. USCIS et al., opened my eyes about what USCIS might have been talking about when it denounced this methodology. I wrote about it here. I have added comments to the complaint but I am not posting it. If you want a copy, e-mail me and ask for it. AAO Posted More I-526 Appeal Dismissals While the dates of these AAO non-precedential Administrative Decisions are rather old (January 2011), I first saw them on the USCIS website on September 29, 2012. For those who do not know about such things as FOIA/PA, just know that there are steps that must be followed before decisions may be posted. Additionally, cases can drag on and on while details get sorted out. I say, just be glad we have more decisions posted at all, things will get better as long as we have something to learn from. I made a short compilation with links to the decisions, cut and pasted some excerpts and, as usual, I added some pithy commentary. See here.
Upcoming EB-5 Engagement
On October 16, 2012, USCIS will hold its next EB-5 Stakeholder Engagement. Although their announced “deadline” for submitting questions or agenda items has passed, speak up and submit something anyway. I don’t put much stock in these deadlines because it makes little to no difference if it is met or not. If USCIS wants to answer a question they will even if it is late. USCIS will also gladly ignore a concern even if it meets their “Deadline”. That said, I timely submitted items: Part I and Part II. The second item was also specifically
submitted to the CIS Ombudsman, please send any of your EB-5 concerns as well.
Disappointing Response from EB-5 Stakeholders on Form Revisions!
USCIS published in the Federal Register, an extension of the I-924 and I-924A Information Collection it began back on May 10, 2012. USCIS extended the comment period through September 20, 2012. Aside from my comments, AILA submitted a second comment and one other Law Firm/Group submitted a comment. All the points made are worthy of study and discussion. Please see the Federal Register online Docket here.
Joseph P. Whalen e-mail: [email protected] or [email protected]
In Other News
In 2009, President Obama issued an Executive Order directing agencies to review regulations. They have been doing so methodically (slowly). On September 28, 2012, EOIR published a Federal Register Notice in which one of my suggestions for joint DOJ-DHS Rulemaking is being seriously considered. Please see here. I have continued to watch the Courts, FR, BIA, & AAO for anything new of interest. Many of the items inspire an essay or article. I post at the websites linked in the footer and submit many for publication in Immigration Daily from ILW.com. Incidentally, many of my articles are now found on ILW’s EB-5 page. Some of my recent essays are posted online at: A Trade Off Between Quality and Quantity in EB-5 OCAHO Procedure & APA Applied to Regional Centers Judging Quality of Evidence How Will RC Decision Board Hearing Work? Legal Framework for RC Adjudications
Joe Whalen has years of experience in immigration adjudication. He is most responsible for growing the EB-5 Regional Center Program from obscurity into a thriving growth industry.
Joe Whalen’s EB-5 Roundup November 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
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Latest Big EB-5 News
Be Careful What You Complain About
The Chung case was dismissed for lack of jurisdiction after NTAs were issued. That was the impetus for filing or so the complaint contended. One of the issues raised was that USCIS had not placed them in Removal Proceedings and therefore they could not press their case before an IJ and then the BIA. Well, they got what they asked for. I doubt it will do them any good. Even if you have not been paying attention to this case you may be somewhat familiar with it. The lead petitioner before the District Court was the EB-5 investor whose I-829 was denied and certified to AAO in connection with the failed South Dakota Dairy Farm. It was denied because nearly all of the “EB-5 direct” employees were aliens unauthorized for employment in the United States. Will the IJ and BIA “rubber-stamp” AAO’s Decision to Affirm CSC’ Denial? Will Chung push the issue to the Ninth Circuit? Will we get a Precedent that confirms that illegal aliens do not count for EB-5 purposes? Does ANYONE in their right mind actually need one? Redefining “Tenant-Occupancy” Methodology?
The lawsuit Carlsson et al. v. USCIS et al., has progressed faster than expected. After the District Court Judge denied the plaintiffs’ request for an injunction and temporary restraining order against USCIS in a scathing 15-page order, I for one saw the writing on the wall and discussed it here. The Judge set a conference shortly thereafter. That resulted in a continuance until January 14, 2013, for another conference BUT rapidly that date was moved forward to November 5, 2012. I sure hope someone out in Los Angeles can track any developments or progress and share it! (Hint-Hint)
I-924A Filing Period Has Opened
Regional Centers are reminded that they may be required to make their annual progress and status report to USCIS. 8 CFR § 204.6(m) requires USCIS to make sure that Regional Centers are “continuing to promote economic growth, improved regional productivity, job creation, or increased domestic capital investment in the approved geographic area.” I wrote about it here.
Most Recent EB-5 Engagement
On October 16, 2012, USCIS held its latest EB-5 Stakeholder Engagement. As usual, the highly helpful Suzanne Lazicki has posted information and a recording at: http://blog.lucidtext.com/ and the EB-5 community is once again grateful for it (just check the comments posted there). Also as usual, questions and concerns remain to be answered. USCIS did state that they would post something soon. Of course, as we all know by now “soon” is loosely defined (or undefined—you decide). I am just going to hang back and wait.
My Latest EB-5 Advocacy Efforts
Recently, I have shifted gears in my training efforts. As more Regional Center hopefuls come forward, they need to seek a competitive edge in their I-924s. In addition to defining their roles as EB-5 service providers and a lasting part of the regional economic infrastructure, I am now pushing folks to concentrate on demonstrating their Knowledge, Skills, and Abilities (KSAs) as a part of their initial Regional Center Proposals. I have written more about it here . I have also further explored the qualitative differences between the results demanded of the stand-alone true entrepreneurs vs. Regional Center Affiliated Investors, see here.
Joseph P. Whalen e-mail: [email protected] or [email protected]
In Other News
EB-5 Investment Report Magazine is a relatively new online source of news and information. See here. Look there for folks you might know. They have posted videos of interviews and reports. Let’s take a look and and give them a chance to make a difference.
Joe Whalen has years of experience in immigration adjudication. He is most responsible for growing the EB-5 Regional Center Program from obscurity into a thriving growth industry.
Joe Whalen’s EB-5 Roundup December 2012
Visit me at: http://www.slideshare.net/BigJoe5 and http://eb5info.com/eb5-advisors/34-silver-surfer
REASONABLE RATES FOR TRAINING & CONSULTATION!
Latest Big EB-5 News
I Figure that the Word Must Be Out
Brian Su has invited me, among others to the Shanghai Event in March 2013. That’s enough for now as I am sure more surprises will emerge.
Still defining “Tenant-Occupancy” Methodology?
The lawsuit Carlsson et al. v. USCIS et al., brought progress faster than expected as somewhat of a land-mark case in this issue. BUT WAIT....There seems to be even more to the story. After the District Court Judge denied the plaintiffs’ request for an injunction and temporary restraining order against USCIS in a scathing 15-page order, I for one saw the writing on the wall and discussed it here. However, this Dec 08 2010,is as AAO posted it; this version is my usual, but then comes the article.
I-924A Filing Period Has Opened
Regional Centers are reminded that they may be required to make their annual progress and status report to USCIS. 8 CFR § 204.6(m) requires USCIS to make sure that Regional Centers are “continuing to promote economic growth, improved regional productivity, job creation, or increased domestic capital investment in the approved geographic area.” A handful read about in here, 14 read more about it here, and this classic tale!
New EB-5 Programme Office
Everything old is new again! USCIS/HQ circa Nov182008_01K1610.pdf Further, if the appellant is suggesting that CIS staff should have informally discussed the merits off the record, the AAO notes that ex parte communications are prohibited by the Administrative Procedure Act (APA), 5 U.S.C. §706. P.2
CARc I-526 AAO Dismissal
This Decision covers multiple issues including among others: 1) Provisions in Operating Agreements and various other documents; 2) OFAC Licenses; 3) NEXUS (but does not use that word); 4) Path and source of lawful funds; 5) Employment creation; 6) TEA Gerrymandering; 7) Business plans; and 8) Material Changes
All of the above pales by comparison to what did happen: The regional center, the Capital Area Regional Center Job Fund (CARc), was designated as a regional center by U.S. Citizenship and Immigration Services (USCIS) on November 25, 2005. On May 20, 2008, USCIS issued an e-mail acknowledging that CARc had obtained a new escrow agent and had a new address. Subsequently, aliens began filing Form 1-526 petitions based on an investment in CARc. These petitions were supported by substantially amended agreements fi-om those submitted with the original regional center proposal in 2005. The Form 1-526s petitions did not disclose that these agreements had been amended fiom the 2005 agreements. In response to concerns raised by the Director, Texas Service Center (TSC), confirmed by the AAO on certification, CARc sought an amendment of the proposal in March 2009, which was approved. The CSC director approved a June 2009 amendment request on December 23, 2009. ________________________________________________________ Be Sure to Give to a Friend in Need—EB-5 Stakeholders: There is a CIS Ombudsman Telecon specifically directed at improving AAO and lest not forget that there are current EB-5 Revisions out fro comment and if you have not figured it out USCIS is always OPEN FOR COMMENT!
Joseph P. Whalen
e-mail: [email protected] or [email protected]
In Other News
EB-5 Investment Report Magazine is a relatively new online source of news and information. See here. Look there for folks you might know. They have posted videos of interviews and reports. Let’s take a look and and give them a chance to make a difference.
Joe Whalen has years of experience in immigration adjudication. He is most responsible for growing the EB-5 Regional Center Program from obscurity into a thriving growth industry.
