2010 AAO Decision (CanAm)

This fascinating AAO decision (April 23, 2010) was referenced by CSC Division III Supervisor Blake Gotto at the March 16, 2010 EB-5 Forum at the California Service Center as an example of USCIS thinking on the “material change” issue. Apparently a lot of people asked about it, and the decision was distributed by USCIS to participants in the June 16 EB-5 Stakeholder Meeting in Washington, DC, with the caveat that it is “not being used as a binding decision on the agency, but does reflect their perspective.” The decision includes a number of very interesting features.

Reading between the black-outs, the case involves a Partnership under Philadelphia Industrial Development Corporation (PIDC), which is operated by CanAm Enterprises, a weighty and professional player in the EB-5 field. The petitioner in this case filed an I-526 in May 2005 and an I-829 in November 2008. The I-829 was denied for the following reasons:

  • Material change issue: “The petitioner’s failure to execute the plan presented in support of the form I-526 petition by not only switching to a project that USCIS had never reviewed but also by financing different expenses with the original project than those projected in the original business plan.” The project as presented at the I-526 stage involved acquisition and renovation of a warehouse to be used by a discount seller of home improvement materials; the EB-5 funds were in fact used to pay off interim financing and an existing mortgage for a restaurant. Citing Matter of Izumi, Chang vs. United States of America, and the 12/11/2009 Neufeld Memo, the AAO argued that the I-829 could not be decoupled from the I-526, or rely on approval of a Form I-526 for an investment project that USCIS did not review as part of that adjudication.
  • TEA designation issue: The petitioner demonstrated TEA-designation for an address other than the address where the project was in fact located.
  • Investment structure issue: A bridge loan does not allow the petitioner to be credited with the statutorily-required job creation.

The website for Philadelphia Industrial Development Corporation states, presumably relevant to this case, that “Consistent with the offering [for EB-5 Immigrant Investment Project loan to 1801 Restaurant Partners], an attractive alternative investment was recommended by the general partner. All limited partners who elected not to make the alternative investment have received a full return of their $500,000 principle investment.”

About Suzanne (www.lucidtext.com)
Lucid Professional Writing provides writing and editing services for businesses and scholars, and specializes in assisting clients to prepare business plans for filing with U.S. Citizenship and Immigration Services.

One Response to 2010 AAO Decision (CanAm)

  1. Pingback: Understanding “material change” « EB-5 Updates

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