starters, while “cash” is not defined in the regulations, it
takes nothing more than common sense to understand
that “cash” encompasses the cash proceeds of a loan.
As the court readily noted, if a “…person uses the funds
to purchase goods, he buys them with cash. Imagine
someone wishes to sell a used car for payment “in cash
only.” If a buyer offered the cash proceeds of a loan, the
seller would happily oblige, for the payment would be “in
cash.”” 19
Secondly, “indebtedness,” while
not defined in the regulation,
has specific legal meanings and
generally is understood to mean
a promise to pay or a “sum owed;”
indeed, as noted above, Matter of
Izummi, a precedent decision from
USCIS had interpreted promissory
notes to be ““indebtedness” under
8 C.F.R. §204.5(e) -- as a promise to
pay the new commercial enterprise
in the form of a promissory note. 20
Needless to say, the court easily
ascer tained that an investment
of cash into the new commercial
enterprise is not indebtedness or a promise to pay
because the new commercial enterprise does not receive
“indebtedness,” they receive cash.
owed to the new commercial enterprise, and that “capital”
was intended to be interpreted broadly. And while a more
thorough discussion of the precedent decisions governing
the EB-5 visa category would have been warranted, it
was encouraging to see the court flatly reject USCIS’
contentions that it’s interpretation of “capital” has been
a consistent view held since 1998. 27 As the court noted
in a brief footnote, which indicates lack of respect the
court had for such arguments, the precedential decisions
“suppor t our conclusion that
indebtedness under the regulation
means a promissor y note as
opposed to the cash proceeds of a
loan.” 28
"As immigration
practitioners have
reminded USCIS many
times over the years, 8
C.F.R. § 204.6(j)(2) is,
on its own face, non-
exclusive"
In a resounding summation that is a
fitting coda to this whole saga, the
court stated:
“ Tex t , stru ctu re , a nd re gu lato r y
context show that the term “cash,”
a s u s e d i n 8 C . F. R . § 2 0 4 .6 (e) ,
unambiguously includes the
proceeds of third - par ty loans.
Because USCIS’s contrary
construction is impermissible, we affirm the district court’s
decision to set aside the denial of the plaintiffs’ petitions.” 29
USCIS’ counter arguments did not (and could not) hold
water. 21 USCIS has long claimed that if cash is cash, it
would no longer have the ability to enforce the restriction
contained in 8 C.F.R. § 204.6(e), that for indebtedness to
qualify as capital, it cannot be secured with the assets
of the enterprise. This argument does not square with
the regulatory text, as the court explained in a footnote,
o b t a i n i n g c as h i n r e tu r n fo r c o lla te r a l of th e n ew
commercial enterprise would violate the definition of
“invest” also contained within 8 C.F.R. § 204.6(e). 22 The
definition of “invest” was not challenged in this litigation
or any of the I-526 petition denials, given that none of the
investors had secured their loans with assets of the new
commercial enterprise (unlike the facts at issue in Matter
of Soffici). Likewise, nothing in this litigation would reduce
USCIS’ powers to ensure investments, whether in the form
of debt or cash, came from a lawful source. 23
USCIS further claimed that the regulation at 8 C.F.R. §
204.6(j)(2) supports its arguments. 24 This argument does
not square with the plain language of the regulation. As
the court easily determined, this regulation deals with the
evidentiary rules and not with the definition of “capital.” 25
As immigration practitioners have reminded USCIS many
times over the years, 8 C.F.R. § 204.6(j)(2) is, on its own
face, non-exclusive. 26
In sum, none of these arguments were persuasive to
the cour t because the actual tex t of the regulation
does not support USCIS’ reading. Indeed, the history
of the regulations discussed above makes clear that
“indebtedness” is considered a “promise to pay” or a “debt”
EB5INVESTORS.COM
79