Evidence of Source of Capital in Immigrant Investor Cases (Part II)
Challenges Based on Principles of Evidence
Characteristic of the unfavorable decisions on issues of lawful source of capital are the Service's adverse findings concerning the relevance or reliability of evidence presented by the petitioner, the Service's incorrect application of certain principles of evidence, and the Service's unfavorable conclusions concerning the sufficiency of petitioner's evidence. For example, the Service has stated that: (1) evidence is "vague" and therefore does not prove that the investor's capital is from a lawful source; (2) evidence is not sufficient to prove a level of income that would enable the petitioner to invest in the U.S. enterprise; and (3) the investor cannot simply "go on the record" without supporting corroborative evidence. These statements of course raise fundamental questions concerning what Congress required investors to present as evidence in support of a petition filed in this visa category. Such statements also present basic issues of evidence.
In the vast majority of these cases, no evidence exists to contradict the petitioner's evidence of how the petitioner amassed the capital necessary to invest, whether that capital was obtained by loan or gift from a family member, by way of inheritance, as the result of lifetime earnings, or even by winning the lottery. Indeed, it would be a rare case for the Service to introduce contradictory evidence. Certain evidence, of course, may be dismissed by the Service in its adjudication because the evidence is not probative of a material fact and therefore is not relevant to the Service's adjudication, or because it is inherently inconsistent in a material manner, or because it is entirely unintelligible. But absent these failures in the presentation of evidence, the Service cannot dismiss evidence that is material. The Service should be required to consider all evidence that is probative of facts that would be material to resolving the issues the Service determines are relevant to the visa classification.17 For the Service to reject a petitioner's relevant evidence on the claim that the evidence is "vague" without explaining in what sense it is vague and why it is also not credible is to abrogate its role as an evenhanded finder of the facts.18
Where material evidence exists in the record tending to support the petitioner's contention that the capital invested was derived from a lawful source ?? such as where the petitioner has presented a declaration in support of the petition ?? the Service is not at liberty to hold out for "better" evidence to prove the lawful source of capital. In other immigration cases, for example, where it is plausible that the applicant might not have the best documentation of a certain event, at least some documentation or testimony probative of the asserted fact is certainly relevant and in many cases is sufficiently persuasive proof of the facts asserted.19 Federal courts have ruled that where a petitioner presents credible evidence in support of proving a particular fact and no contradicting evidence is available, the Service should conclude that petitioner has satisfied his or her burden of proving that fact.20
In rejecting the evidence presented by petitioners in the hundreds of nonprecedent EB?5 cases reviewed for this article, the AAO consistently cites Matter of Treasure Craft of California,21 a case decided by the Board of Immigration Appeals (BIA), for the proposition that the petitioner has the burden of proof and that the burden of proof is not met by merely going "on record" with self?serving statements concerning petitioner's lawful source of funds. The citation to Treasure Craft, however, is inapposite.
Treasure Craft involved a petition for H?3 trainee status. The law at the time required the employer?petitioner to prove that training of the proposed beneficiaries in pottery making was not available in Mexico and that employing the beneficiaries in a partially productive capacity would not displace U.S. workers. The BIA stated that it would take "administrative notice" of the "commonly known" fact that Mexico has a thriving pottery industry, and of the "well known" fact that Los Angeles County was teeming with unemployed U.S. workers who were likely to have the skills and desire required to fill the jobs that the beneficiaries sought. Based on those "well?known facts," the Board rejected the petitioner's argument that it need only "go on record" as stating that training in Mexico was not available and that employment of the beneficiaries would not displace U.S. workers.22 Common knowledge, therefore, was the basis for refuting petitioner's unsupported assertion in Treasure Craft.
No comparable common knowledge is germane to adjudication of I?526 petitions filed by immigrant investors. Does the Service suggest that it is common knowledge that all alien investors seeking classification under INA § 203(b)(5) invest capital that is derived from unlawful sources? Of course not. Reliance on Treasure Craft, therefore, is misplaced.
Courts have held that before an agency can take administrative notice of any fact in the course of adjudication, it must specifically identify the facts to be noticed and provide an opportunity to rebut the noticed facts.23 Therefore, due process requires the Service to identify which specific facts are the subject of administrative notice if it is to rely upon Treasure Craft.
Viewed through another lens, the Service's use of Treasure Craft is also improper because it establishes an evidentiary presumption ?? i.e., that the source of capital is unlawful ?? that is not warranted by the statute. Where evidentiary presumptions exist in immigration law, they are authorized by Congress in a statute and they include standards for presenting evidence to rebut the presumption.24 The evidentiary presumption of unlawful source of funds that the Service advances in immigrant investor cases lacks both a statutory basis and a realistic standard for rebutting the presumption.
Treasure Craft, in short, has no value as precedent on the burden of proof issues in EB?5 cases, and it has no value as precedent on the question of what evidence of lawful source of capital is required.
In some of the cases we have reviewed, the INS has denied meritorious petitions not because of an absence of evidence but because the Service misapprehended what a petitioner must prove when presenting evidence of his or her source of funds. We agree with the Service that a petitioner must demonstrate that he or she invested the capital. However, we disagree with the Service's requirement that a petitioner must necessarily prove the lawful source of that capital. How to challenge the Service's insistence on the latter kind of evidence is the subject of the remaining sections of this article.
© Copyright 2001 Lincoln Stone and Stephen Yale-Loehr. All rights reserved. Reprinted with permission. This article was originally published in 6 Bender's Immigration Bulletin 972 (Oct. 1, 2001).
17Federal Rules of Evidence Rule 401 provides that "relevant evidence means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." 8 C.F.R. § 103.2(b)(1) provides that any evidence submitted is to be considered part of the relating petition.
About The Authors
Lincoln Stone (Lstone@fms-law.com) is co-chair of the American Immigration Lawyers Association (AILA) Investors Committee, and is of counsel to Fainsbert Mase & Snyder, LLP (http://www.fms-law.com) in Los Angeles, California.
Stephen Yale-Loehr (firstname.lastname@example.org) co-chairs the AILA Investors Committee with Lincoln Stone. He is co-author of Immigration Law and Procedure, published by Matthew Bender & Company, Inc. He also teaches immigration law and refugee law at Cornell Law School, and is of counsel at True, Walsh & Miller (http://www.twmlaw.com) in Ithaca, New York.