The DC Circuit Court has ruled that EB-5 investors can use proceeds from unsecured loan for their investment capital. Zhang v. USCIS is a November 2018 Class Action Lawsuit that challenged USCIS’ denials of EB-5 investment petitions that had investment funds sourced solely from unsecured loans. The DC District Court ruled in favor of Zhang and vacated these denials and ordered USCIS to reconsider the petitions. In the Circuit ruling, Judge Gregory G. Katsas made this statement:” Cash is fungible, and it passes from buyer to seller without imposing on the seller any of the buyer’s obligations to his own creditors. The buyer’s source of cash — whether paycheck, gift, or loan — makes no legal or practical difference.”
This decision is contrary to a 2015 USCIS policy that viewed loan proceeds as debt rather than cash, if not secured by the investor’s personal assets. In support of the investors, Judge Katsas made this statement: ”As far as the enterprise is concerned, whether or how the investor’s loan was secured makes no difference; it can deploy the cash either way, and it faces no exposure if the investor defaults on any obligation to a third-party lender.”
The EB-5 program, also known as the Million Dollar Green Card, allows investors to obtain a green card if they invest either $900,000 or $1,800,000 in business or projects that will create 10 full time jobs. To learn more about the program, please click here.
You can set up a consultation by clicking the link below.
To find out more about our services and fees contact Scott Legal, P.C.
This website and blog constitutes attorney advertising. Do not consider anything in this website or blog legal advice and nothing in this website constitutes an attorney-client relationship being formed. Set up a one-hour consultation with us before acting on anything you read here. Past results are no guarantee of future results and prior results do not imply or predict future results. Each case is different and must be judged on its own merits.