FOIA Documents Shed Light on RFEs and NOIDs Issued by IPO

FOIA Documents Shed Light on RFEs and NOIDs Issued by IPO

Thanks to the diligent and thorough review by John Pratt and his associates (Partner, Kurzban Kurzban Tetzeli & Pratt) of documents received through Freedom of Information Act (FOIA), we now have some enlightening information about how the Immigrant Investor Program Office (IPO) is reviewing EB-5 forms. Specifically, the document review sheds light on new procedures for form adjudications and reasons for why IPO is issuing requests for evidence (RFE) and notices of intent to deny (NOIDs).

A summary of these findings is distilled below. The documents in-full are available upon request for IIUSA members by emailing education@iiusa.org.

IIUSA submits regular FOIA requests to USCIS for data and information related to the EB-5 program. This information is vital to the reports and other resources we provide our members. In recent years, receiving information back via FOIA has proved to be a frustrating and often fruitless task. We often go years before receiving any response at which point the data is stale and likely not valuable, if we even get a response at all. IIUSA has taken to filing lawsuits against USCIS for failure to fulfill FOIA requests within the statutory requirements. It is with the help of member attorneys like John Pratt and Brandon Meyer that we have been able to receive any information back via FOIA in the last 4 years. You can read more about our FOIA woes from this article in the Fall 2023 Regional Center Business Journal.

An enormous thank you is warranted to John Pratt and his team for not only helping to compel these documents from USCIS, but for the tireless work in reviewing the hundreds of pages and summarizing them for the greater good.

FOIA Document Review Summary:

• USCIS has established an “IVT [Informal Value Transfer] Working Group” that is apparently spearheading the agency’s practices and policies with respect to IVTs (i.e., currency swaps) and is working with other agencies like FinCen.

• From the FOIA:
  • “Over the last several years, IPO and the IVT working group have developed a relationship with FinCen HSI, FBI, IRS and DOS. FinCen is interested in currency Exchangers operating in our program, as some may meet applicable statutory definitions of financial institutions, and/ or money services businesses (MSBs).”

• • “Federal law enforcement agencies have expressed an interest in investigating currency exchangers to evaluate possible violations of money laundering laws, and their predicate offenses; wire fraud, mail fraud, structuring and bulk cash smuggling.

• USCIS has developed an “IVT Tracker”—an addition to their internal tracking software that allows the agency to keep track of people/entities involved in currency exchange. When USCIS adjudicators process an I-526 (and even an I-829) they are required to input the names/information about the currency exchangers into this “IVT Tracker,” including granular information like bank account numbers. This explains how/why USCIS is now issuing RFEs saying things like “it appears Currency Exchanger was involved in 10 other currency swaps” and requesting evidence about them.

• The IPO Chief issued a memo in 2019 advising that currency exchangers who appear in the IVT Tracker five or more times get referred for possible entry into TECS (DHS database)
• • IPO is developing automated alerts to advise adjudicators when a currency exchanger appears in the IVT Tracker four or more times.

• USCIS developed a training specific to “Lawful Source of Funds in I-829”
  • The guidance says that adjudicators should apply USCIS’s “deference” policy with respect to the lawful-source-of-funds analysis at the I-829 stage. What this means is that if an adjudicator believes there was a “mistake of law or fact” at the I-526 adjudications stage, the guidance is instructing adjudicators to re-adjudicate SOF at the I-829 stage.
  • The “I-829” SOF training essentially goes through a full SOF analysis of the kind that would generally be performed at the I-526 stage.
  • The guidance recognizes the SOF reg at the I-829 stage, which states that it must “become[] known to the government that the investor obtained the investment funds unlawfully” for an I-829 to be denied on SOF.

• • • But the USCIS presentation does not discuss the meaning of the reg or acknowledge the fundamental disconnect between what the reg says and the policy guidance which seems to be directing an essentially de novo analysis of SOF at the I-829 stage.

• The FOIA includes a training on “Lawful Source and Path of Funds—Informal Value Transfers (IVT)” Among other things, the training:
  • Confirm that USCIS now has a policy of requiring investors to prove the lawful source of the currency exchanger’s funds;
  • Makes clear that the investor must have currency exchange agreement in the record to document that the funds received from the currency exchanger were part of a currency exchange;
  • States that the record must show full path of the funds from investor to exchanger, and from exchanger back to the investor;
  • If currency exchanger sends money directly to the NCE, there must be documentation to show that the money was sent on the investor’s behalf;
  • If a claim is made that the exchanger is licensed, IPO will request evidence;
  • Affidavits alone are generally insufficient to meet investor’s burden;
  • Exchanger’s unwillingness to provide requested documents can still result in denial
• The FOIA production includes a training on “Capital, Investment and Sustainment in I-829 Adjudications” which includes several slides on the case of misappropriated funds (this is from the AIIA FOIA).
  • Of note, the discussion of how misappropriated funds impacts the “at risk” and “sustainment” requirements appears on a slide titled “UnresolvedIssues in Investment and Sustainment.”
  • The substance of the guidance is heavily redacted under the (b)(7) exemption.
  • The fact these fact patterns are described as “unresolved” suggests USCIS has no idea how to handle these types of cases as a matter of policy.
• According to minutes from a discussion between IPO officials and Hill staffers, the Department of State sometimes sends embassy personnel to EB-5 promotional events abroad. Just something for RCs to keep in mind in case they were not aware already.