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EB5 INVESTORS MAGAZINE

Most importantly, the EB-5 submission must be credible

By Walter S. Gindin and Matthew T. Galati

EB-5 submissions tend to be some of the most heavily worded and annotated of all immigration filings. Beyond the significant information submitted in support of the qualifying project, immigrant investors also must produce a myriad of documentation to demonstrate the lawful source and path of their investment capital.1 Given the breadth of representations and documentary evidence that is typically produced as part of an EB-5 filing, it is not surprising that the U.S. Citizenship and Immigration Services (USCIS) is closely scrutinizing the record and increasingly performing credibility-based assessments to determine whether investors have satisfied the statutory and regulatory requirements of the EB-5 program. Recall that in Matter of Ho, the Administrative Appeals Office stressed that, “most importantly, the business plan must be credible.”2 USCIS in practice prioritizes a credibility-based assessment to every other exhibit in the EB-5 submission.

While it would be extremely rare to have a client apathetic to making truthful representations, many do not understand how critically important it is to satisfy such credibility-based assessments. Indeed, the immigration attorney must maintain a fanatical devotion to ensuring the petition is presented consistently and substantiated across thousands of pages, often requiring monotonous, time-consuming work on the part of the investors and their legal representatives. Balancing this need to ensure a credible submission with the clients’ desire to file quickly is key to competently representing clients in EB-5 filings.

But USCIS’ approach to EB-5 petitions and applications is nothing new and we find it important to examine and draw lessons from an area of immigration practice where credibility determinations are quite common and have yielded a sizeable body of federal case law – namely, immigration proceedings involving applications for asylum and related relief that are governed by the Real ID Act. Of course, very few EB-5 cases end up in immigration court, and those that do are usually in the context of a denied form I-829 and referral to removal proceedings.3 Nevertheless, because there has been USCIS’ EB-5 adjudications that invoke language questioning credibility that is similar to the types of considerations that arise in immigration court proceedings, there are important lessons to the EB-5 practitioner that can be gleaned from federal case law interpreting the Real ID Act’s credibility amendments.


CREDIBILITY-BASED ASSESSMENTS IN EB-5 ADJUDICATIONS

Credibility is a multifaceted concept that underlies most requests for immigration benefits and relief. At its core, the term means truthfulness both in oral or written representations before an adjudicative body. This is no different in the EB-5 context, where forms I-526, I-829 and I-924 expressly require the applicant to certify, under penalty of perjury, that the information in the petition, application, and all supporting evidence is “true and correct.”4 While it may seem obvious that telling the truth in an EB-5 petition is important, it bears emphasis that an express determination of fraud or willful misrepresentation not only could prevent the immigrant investor from being able to satisfy the EB-5 regulatory and statutory criteria, but could also directly impair his or her ability to establish admissibility into the United States, forever foreclosing avenues to immigration.5 In the most egregious cases, immigration fraud can lead to criminal charges.6 These concepts equally apply to Regional Centers, who must maintain credibility to receive designation and exemplar approvals.

Beyond truthfulness, however, credibility also encompasses the concepts of believability and reasonableness. Take, for example, a scenario where an immigrant investor submits a letter from his or her former employer that attests to the investor’s tenure and compensation level at the company. The factual statements in the letter may be true, but USCIS might cast doubt on the employer’s account because the letter itself might not bear some independent indicia of reliability. We have seen this common scenario amongst Chinese investors, for instance, where they neglected to include company letterhead, contact information, the signatory’s business card and other substantiation. In this example, an attorney’s baseline assumption that the client is presenting truth is usually insufficient to establish the credibility of the representations in the eye of the USCIS adjudicator without some additional objective evidence.

USCIS has broad latitude to question the credibility of representations relating to the qualifying project or the immigrant investor’s source-of-funds. In this regard, we have seen USCIS adopt three approaches: identifying inconsistencies or discrepancies within and among the documents in the EB-5 filing; noting a lack of corroboration to support the alleged facts or discounting submitted evidence as unsubstantiated or unreliable; and in severe cases, expressly determining that the information presented is fraudulent or willfully misrepresented, sapping the credibility of the investor in every context.

Making matters potentially more complicated is the fact that USCIS’ review is not necessarily limited to the “four corners” of an EB-5 filing. Rather, it can and does encompass extra-record information that the agency obtains through its own independent research. It is no secret that USCIS performs basic internet searches in EB-5 adjudications. It also, sometimes in conjunction with consulates abroad, conducts more complex on-site investigations and audits to verify assertions made in EB-5 filings.7 And because the Federal Rules of Evidence are mostly inapplicable in the immigration context,8 regional centers and investors would be hard-pressed to challenge USCIS’ sua sponte introduction and reliance on extra-record evidence.

As the size and complexity of EB-5 filings continues to grow, and as USCIS intensifies its independent investigative procedures, the need to ensure that representations in filings are accurate and reasonable is particularly acute. By extension, the ability to adequately respond to USCIS’ concerns when credibility is called into question could be the difference between a Green Card and a waste of $500,000. Because we assume that EB-5 petitioners and their representatives are aware of the need to present true and accurate information, we focus below on circumstances where things fall through the cracks. In this regard, we initially examine an area of immigration practice where credibility determinations are quite common and have yielded a sizeable body of relevant case law – namely, immigration proceedings involving applications for asylum and related relief governed by the Real ID Act. Drawing lessons from relevant federal case law, we then discuss several strategies that could be helpful in preempting and/or responding to credibility-based concerns in EB-5 adjudications.

Credibility Determinations in Asylum Proceedings

Asylum is a discretionary form of relief that hinges on persecution in the applicant’s country of origin on account of a protected ground.9 Credibility is arguably the most important facet of an asylum claim, and is often the single greatest substantive obstacle facing asylum applicants. In 2005, Congress enacted the Real ID Act, which amended the Immigration and Nationality Act (INA). Congress changed the manner by which credibility determinations are rendered in immigration proceedings involving applications for asylum and related relief.10 In particular, the Real ID Act codified for the first time the types of considerations that an immigration judge (“IJ”) may take into account in assessing an asylum applicant’s credibility. These include an applicant’s candor, demeanor or responsiveness; a lack of corroboration; and written and testimonial omissions, implausibilities, inconsistencies, inaccuracies and falsehoods without regard to whether they go to the heart of the applicant’s claim.11 The practical effect of the Real ID Act’s amendments was to make clear that every facet of an immigration proceeding is potentially relevant to an applicant’s credibility. 

Though not intended as an exhaustive evaluation, the below discussion provides an overview of federal circuit law pertaining to two credibility factors set forth in the Real ID Act that clearly influence USCIS’ credibility-based assessments in EB-5 adjudications: inconsistencies and lack of corroboration.


INCONSISTENCY FINDINGS UNDER THE REAL ID ACT

Before the Real ID Act, case law in a majority of circuits held that reliance on minor inconsistencies would not support an adverse credibility determination.12 The Real ID Act, however, expressly provides IJs authority to consider any inconsistencies or discrepancies when assessing an applicant’s credibility. Given the unique nature of immigration proceedings – where an IJ evaluates the internal consistency of an applicant’s and/or witness’ direct and cross-examined testimony and also the testimonial consistency with written submissions and/or prior statements made in support of the applicant’s claim – there tends to be a heightened risk that credibility issues will be identified.13 When they are, the federal courts have held that, save for a few exceptions, an IJ must provide the applicant with an opportunity to explain and reconcile any discrepancies in the record.14 Importantly, however, the IJ need not credit the explanations for inconsistent statements unless those explanations would compel a reasonable trier of fact to do so – in other words, explanations of inconsistencies or discrepancies must be objectively believable and reasonable.


CORROBORATION FINDINGS UNDER THE REAL ID ACT

In immigration proceedings, a failure to present corroborating evidence can lead to a denial of relief based on either insufficiency of the evidence grounds or based on an adverse credibility determination. Regarding the latter, federal courts have interpreted the Real ID Act as allowing IJs to request corroborating evidence whether or not the IJ has reason to suspect the alien’s credibility. For example, where the alien’s credibility is already called into question, an applicant may be required to provide reasonably available evidence to corroborate the elements of his or her claim and/or rehabilitate the doubted testimony or documentation. An applicant’s failure to present corroborating documentation, or inability to explain why such evidence is reasonably unavailable, may support an adverse credibility determination and may be fatal to his or her claim for relief.16 Similarly, while an applicant’s credible testimony alone may be enough to carry his or her burden of proof,17 the federal courts have held that an IJ may nonetheless require corroborating evidence to support the alleged facts where it would be reasonable to expect that such corroboration would be available.18

Related to the issue of corroboration is the probative weight to be afforded to evidence. In this regard, the federal courts have noted that, while there is not a finite set of guidelines for demonstrating the authenticity of documentary evidence, the weight afforded to evidence does lie largely within the discretion of the IJ.19 In other words, separate from the decision of whether to consider evidence at all, the trier of fact has significant authority to determine the evidentiary value of the supporting documentation.


POTENTIAL STRATEGIES FOR DEALING WITH CREDIBILITY-BASED FINDINGS IN EB-5 ADJUDICATIONS

Dealing With Allegations of Inconsistencies in EB-5 Adjudications

Identifying inconsistencies in the record are a common way in which USCIS questions an EB-5 petitioner’s or applicant’s credibility. This is not entirely surprising since EB-5 filings can be many hundreds if not thousands of pages, which invariably increases the risk of inconsistencies within and among the documents. And, as noted above, USCIS’ increasing reliance on and consideration of extra-record evidence only enhances the chances that the agency identifies some discrepant information.

In considering the relevant case law interpreting the Real ID Act, two points must be emphasized regarding USCIS’ focus on discrepancies in EB-5 adjudications. First, while USCIS typically focuses on inconsistencies that tend to be material to the alleged fact – such as where an investor’s claimed employment history contradicts statements made by his former employer during an overseas investigation – USCIS nevertheless could rely on minor discrepancies that do not necessarily go to the heart of the claim. Indeed, USCIS commonly states in its RFEs and NOIDs that doubt cast on any aspect of the petitioner’s evidence may lead to a reevaluation of the reliability and sufficiency of the remaining evidence in the record.20 Therefore, it is conceivable that any inconsistency could “open the door” to increased scrutiny or doubt of the entire record.

Second, when USCIS does identify specific inconsistencies, it has typically afforded opportunities to explain and reconcile the discrepancies in the record in advance of its ultimate disposition of the case. We note, however, that like an IJ in immigration proceedings, USCIS has broad discretion to accept or reject an explanation for an alleged inconsistency. Accordingly, it is important that any such explanation be supported by objectively reasonable evidence pointing to where the truth lies.21

Attorneys are generally not in the business of representing clients who affirmatively lie to USCIS. However, mistakes happen that could lead to an inference of untruthfulness. For example, discrepancies can arise from scriveners’ errors: a document may not be translated properly and an inconsistency in the documentation slips past the attorney prior to filing. Or, third parties attempting to bolster an applicant’s background, may misstate a fact that contradicts other materials. In such a case, it is therefore critically important to have an unbiased perspective with some authority to review the evidence submitted and reconcile the apparently contradicting materials that should not have been considered for adjudication in the first place.


Dealing With Allegations of Insufficient Corroboration in EB-5 Adjudications

Similar to applicants in immigration proceedings, an EB-5 petitioner’s or applicant’s failure to submit corroborating evidence could undermine their credibility, and, by extension, could prove fatal to their claim. As seen in the context of the Real ID Act amendments, USCIS can raise the issue of corroboration in the EB-5 context either when credibility has already been called into question – such as where there are noted inconsistencies in the record – or where documentation that can be reasonably expected to be available is missing from the record. In both scenarios, USCIS typically identifies in RFEs and/or NOIDs the types of evidence that may be sufficient to bolster a contested or unsubstantiated claim.

Federal case law counsels that, in addition to explaining why such evidence is unavailable, the EB-5 petitioner or applicant should also support the explanation with some objective evidence as to why this unavailability is reasonable under the circumstances. If it turns out that the evidence requested by USCIS is unavailable, the regulations require independent substantiation of unavailability.22 The same approach holds where the EB-5 petitioner or applicant knows at the outset that they will not be able to provide a key piece of documentation that USCIS might reasonably expect to be included in the filing; here, there may be good justification to proactively explain and support such evidentiary lapses.

For example, imagine an investor’s source of funds involves a gift from a parent whereby the funds earned originate from a business with corporate documentation – primary evidence of the lawfulness of the source of funds – is protected by confidentiality provisions. In such a case, the petitioner must still meet her burden of proving the gifted funds were lawfully earned and to utilize secondary evidence, media reports, letters from customers, unprivileged communications from counsel, etc. as available. As mandated in the regulations referenced above, third-party affidavits must overcome any unavailability of secondary evidence.23 Further, one must also consider that many investors come from countries with histories similar to that of Vietnam, where the use of banking institutions and comprehensive record keeping is relatively recent. As USCIS adjudicators are by definition Americans, it is important to remind them of country conditions, as well as providing historical contexts for why contemporary documents might not be available or were not produced due to war, disasters or civil strife, etc. It is clear that proving eligibility requires only a preponderance of the evidence.24 Applicants, investors, and their attorneys must be prepared to argue this proactively with EB-5 submissions, and not only in response to an RFE or NOID.

Another important consideration is the evidentiary value of the documentation submitted in support of an EB-5 petition or application. Similar to an IJ in immigration proceedings, the probative weight afforded to evidence submitted with an EB-5 filing is largely within USCIS’ discretion. We have seen the agency question the reliability of documentation that it perceives as self-serving – particularly where representations are from a party with a direct stake in the outcome of the case. In these instances, it can be beneficial to reinforce the documentation with additional objective and compelling factors. For example, in the context of an EB-5 project, it is often necessary to reinforce a project budget and timeline prepared by a developer with an independent third-party attestation as to the reasonableness of the assumptions in light of the scope of the intended development and/or industry standards. Similarly, in the context of an investor’s source of funds, where independently audited company financials may not be available, it is critically important to substantiate the company’s capacity to lawfully earn profits through customer contracts, bank account statements, marketing materials, client lists, and other primary documentation generated in the normal course of business. Third-party testimonials, providing tertiary evidence, can further bolster an investor’s bona fides but are generally not in-and-of-themselves sufficient substitutions.

USCIS’ adjudications of EB-5 petitions and applications can be unpredictable. Sometimes the agency misapplies statutory and regulatory authority, as well as deviates without forewarning from established policy. Nevertheless, the presentation of the facts is at least one aspect of an EB-5 filing that is entirely within a petitioner’s and applicant’s control. Accordingly, it is critical to conduct an exacting review of all evidence comprising an EB-5 petition and application to ensure internal and external consistency. Additionally, it is important to adopt a “devil’s advocate” approach to the documentation and consider what if any evidentiary gaps exist in the filing. Anticipating USCIS’ evidentiary concerns and addressing them in an objective and reasonable manner could preempt follow-up inquiries challenging the credibility of the submission.

Walter Gindin

Walter Gindin

Walter S. Gindin, J.D., is the In-house Immigration Counsel for CanAm Enterprises, LLC, and is responsible for developing and overseeing all aspects of the preparation of I-924 Applications and I-526/I-829 Petitions, as well as providing guidance on immigration law and policy to the company’s project development and client relations departments.

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