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ELIGIBILITY IS SEPARATE
FROM SOURCE OF FUNDS
As a practical matter, the well-heeled investor with
copious amounts of lawfully acquired assets probably
does not need to source his or her administrative fees. In
such a case, an adjudicator might assume that an investor
who doesn’t need to use unlawfully acquired capital
won’t. Adjudicators may even accept that investors of
significant wealth may have some illegal income, but
that the illegal income is not a direct or indirect source
of the investment funds. After all, eligibility issues are
often separate from SOF issues.
A source of funds consultant should make a case-by-case
decision as to each client and how much effort should be
expended on providing a lawful source of funds analysis
for big-ticket items, including the administrative fee,
that show up on an investor’s balance sheet. The best
practice is to employ a consultant for SOF that has the
experience and intuition to ensure the burden of proof
in each case is satisfied. But generally, it is the marginal
investor who has the greater burden of production who
may wish to source his/her administrative fee.
S tephen P. P azan is an attorney working as a consultant
to Baker Tilly Capital, LLC on EB-5 source of funds and
other issues. Pazan was a consular officer with the U.S.
Department of State in Colombia, Kyiv and Warsaw. He was
also an EB-5 adjudicator in the investor program office of
USCIS before leaving government in March 2018. He is also
special counsel to the New York law firm Barket Epstein
Kearon Aldea & LoTurco, LLP.
Sources
1
See, e.g., Matter of Ho, 22 I&N December 206 (Assoc. Comm. 1998); Matter
of Izzumi, 22 I&N December 169 (Assoc. Comm. 1998); Matter of Hsiung, 22 I&N
December 201 (Assoc. Comm. 1998).
2
See Policy Manual, Chapter 2, Eligibility Requirements, A.1 & 4. The Manual does
not define “indirect source.”
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