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Would You Buy a Used Car from This EB-5 Applicant?

By David North, September 29, 2014

Every so often one part of the immigration system does the right thing, while another does not. In this case USCIS gets the credit and the State Department gets none.Our protagonist today is an alien used car dealer; he's a Mexican millionaire who tried, without the needed qualifications, to convert his E-2 (nonimmigrant investor) visa and his collection of formerly owned vehicles into a green card via the EB-5 (immigrant investor) program.

USCIS rejected his application on three grounds that we will get to in a minute; he appealed to the Administrative Appeals Office (AAO) and that agency, in a redaction-riddled decision, said he was not qualified. Further, and this is my take, not something written by AAO, he must have had one of the world's worst immigration attorneys in his corner.

Given the AAO's peculiar privacy policies, which we have noted before, we do not know the alien used car dealer's name; further, given the same policies, the abysmal lawyer's name was not published either, a real boon to that person.

Let's call the applicant UCD (for used car dealer); he had a State-Department-granted E-2 visa as a non-immigrant investor; this is a temporary document but can be renewed again and again, and often does not require more than a $50,000 investment — in short, this is a program that just begs to be abused.

UCD then applied for the first stage of the EB-5 program, the acquisition of a set of temporary resident cards for himself and his family. He had to prove to the government that the million dollars were really his and had been obtained legally; he had to show that he had, in fact, really invested the money in the business, and he had to prove that the business had created 10 full-time jobs for permanent U.S. residents other than his family members. (His was one of those rare million-dollar EB-5 applications; 98 percent of them are at half that figure, and are filed through regional centers.)
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The USCIS staff said that UCD failed to prove that the money was legitimately acquired, that it was really invested, and that the sufficient number of jobs had been created. He appealed, and AAO, as it does routinely, did a de novo review of the case, which involved the examination of dozens and dozens of financial documents. Skipping over the lack of financial proof, a subject better left to a CPA, let's look at the non-creation of the required 10 jobs.In EB-5 cases (with the initials standing for Employment-Based) the jobs created by the investment count only if they are genuine, non-family, non-alien jobs. But the papers filed by the lackluster lawyer indicated a total of 11 jobs, including UCD and his wife, one nonimmigrant worker (probably an H-2B) and four contract workers (i.e., people who had to pay their own Social Security and Medicare taxes). That left four actual jobs created by the EB-5 investment.

The lawyer either should have told the client to re-arrange his hiring and payroll practices to fit the law — even if belatedly — or advised him not to file an appeal. Instead he wrote an appeal that was sure to fail, and presumably charged UCD for his work.

Given that AAO only deals with the narrow issues before it, it is likely that the agency did not, as it should have done, forward an unredacted copy to the State Department, encouraging a review of the E-2 visa. Someone (especially a used car dealer) who plays fast and loose with the labor and immigration laws might, just might, have been trying to bamboozle State as well.

My suspicion is that no such referral was made and that UCD continues to do business with his E-2 visa.
In terms of policy, as Joe Whalen, the EB-5 consultant who brought the AAO decision to light, remarked: "Does America need another used car lot?"

The text of the redacted version of the appeal can be seen here.
​http://www.cis.org/north/would-you-b...-eb5-applicant