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Lozada IACi

Claims Have Very Limited

Relief Options For Immigration Benefits By Joseph P. Whalen (August 29, 2014)

I. Introduction 1

Ineffective Assistance of Counsel (IAC) claims used to support a Motion to 2

Reopen an immigration case (usually a removal order) per Matter of Lozada, 19 3

I&N Dec. 637 (BIA 1988) aff’d, 857 F.2d 10 (1st Cir, 1988), reaffirmed in Matter of 4

Compean, Bangaly & J-E-C-, 25 I&N Dec. 1 (A.G. 2009), require the respondent to 5

take certain affirmative steps in a diligent manner and then prove it. The specific 6

requirements established by the Board of Immigration Appeals (BIA) and upheld by 7

the First Circuit Court of Appeals back in 1988, are as follows. 8

1) The motion must be supported by an affidavit of the allegedly aggrieved 9

respondent setting forth in detail the agreement that was entered into with 10

counsel with respect to the actions to be taken and what representations 11

counsel did or did not make to the respondent in this regard, 12

2) Counsel whose integrity or competence is being impugned [must] be 13

informed of the allegations leveled against him or her and be given an 14

opportunity to respond, including any response or failure to respond, and 15

3) The motion must reflect whether a complaint has been filed with the 16

appropriate disciplinary authorities [or any authority1] with respect to any 17

violation of counsel's ethical or legal responsibilities, and if not, why not. 18

4) Ultimately, however, the respondent must show prejudice to the outcome of 19

their underlying case. See Matter of D-R-, 25 I&N Dec. 445,457 (BIA 2011). 20

1 I believe that the BIA had the various State Courts and/or Bar Associations in mind BUT would

the BIA acknowledge a complaint filed with itself on EOIR-44 “Immigration Practitioner

Complaint Form”, or any DHS Immigration Agency [USCIS, ICE, or CBP] as well? How about

the Federal Trade Commission at: https://www.ftccomplaintassistant.gov/Details#crnt?

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Even when one is successful in showing some ineffectiveness of prior counsel, 1

there must also be an underlying “entitlement”2 that was available, and for which, the 2

respondent was fully qualified at the time of filing the preference visa petition. It 3

must be demonstrated that but for prior counsel’s ineffective assistance that the 4

benefit, or relief, would more likely than not have been attained. In practical terms, 5

the reviewing authority might, and very often does, perform a de novo review on this 6

issue for expediency, or if further fact-finding is required, the case is often remanded 7

for that purpose and a new decision. 8

II. Two Vastly Different Appellate Review Authorities 9

The BIA and AAO are not synonymous. Immigration Court Proceedings are 10

adversarial in nature and involve face-to-face confrontations. The BIA is the 11

appellate authority over those cases and has purposely restricted itself in many ways 12

via regulation, especially when it comes to fact-finding. As an example of what can 13

happen when the BIA goes too far in regard to fact-finding see Eros Baca v. Eric 14

Holder, Jr., 09-71702 (9th Cir. 2011)(unpub), which noted, then remanded to the 15

BIA on this basis. 16

“……………………………………..…The BIA nevertheless affirmed the IJ’s decision 17

to pretermit cancellation of removal on the ground that Baca lacked a qualifying 18 relative, as required by 8 U.S.C. § 1229b(b)(1)(D). But the IJ had taken no 19 evidence on whether Baca had a qualifying relative, and the BIA is not 20 permitted to engage in such fact-finding. 8 C.F.R. § 1003.1(d) (3) (iv); see 21

Brezilien v. Holder, 569 F.3d 403, 3412 n.3 (9th Cir. 2009). The BIA’s sua 22 sponte decision to resolve the appeal on this basis was therefore beyond its 23 authority.” [Footnote omitted.] 24

The BIA therefore tends to remand more cases (percentage-wise) than AAO. 25

The BIA can’t judge a respondent’s demeanor from the papers contained in the file 26

before it, and digital recordings are not much better so, they would end up with a 27

transcript instead, i.e., more paper. The major point of similarity is the review of 28

most family-based immigrant petitions which strangely remain under the authority of 29

2 Also see prior article at: http://www.ilw.com/articles/2012,0202-Whalen.shtm

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the BIA which also allows for full de novo review of these visa petitions even though 1

DHS through USCIS has sole authority over immigrant visa petitions.3 2

Conversely, the AAO is an appellate body with responsibility over appeals from 3

Benefits Requests Determinations within an inquisitorial, rather than adversarial, 4

adjudicatory system. In other words, in USCIS Adjudications, it is not an “us against 5

them” situation. That being said, it seems that some practitioners don’t seem to have 6

been taught that in law school. The proper goal of the USCIS Adjudicator is to 7

arrive at the correct decision as appropriate to the benefit sought and the evidence 8

presented, and not to strive for a way to deny anyone anything they actually deserve. 9

Some overzealous and/or misguided practitioners seem to repeatedly make absurd 10

arguments suited to an adversarial proceeding instead of shoring up the actual 11

evidentiary showing needed for the inquisitorial benefits request, all to no avail. 12

AAO has assumed broader powers, at least in part, in order to deal with a larger 13

caseload, and it can and will do some fact-finding of its own by issuing RFEs, 14

NOIDs, NODIs, or may, like the BIA, rarely grants oral argument but can do so. 15

In that so much of the adjudication work entrusted to USCIS involves mixed 16

questions of fact and law that are essentially exercises of judgment plus a certain 17

percentage of the time, may also involve an exercise of discretion that has been 18

delegated down the line from the Secretary of DHS, AAO is in a rather unique 19

position amongst immigration-oriented administrative appellate bodies in this regard. 20

The different nature of the proceedings before AAO, as opposed to the BIA lends 21

itself to this approach which has developed organically over many decades. The BIA 22

is generally overturned by the Circuit Courts of Appeals for any perceived 23

unauthorized fact-finding. 24

3 See: Matter of Aurelio, 19 I&N Dec. 458, 460 (BIA 1987) (holding that legacy INS, now USCIS,

is the sole authority with the jurisdiction to decide visa petitions).

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USCIS’ AAO, on the other hand, seeks not to be labeled as acting in a manner 1

that is considered to be “arbitrary, capricious, an abuse of discretion, or otherwise 2

not in accordance with law”.4 The former INS Officials who handled the appeals that 3

are now handled by AAO did so in much the same way as occurs today. The vast 4

majority of cases before AAO did not involve any face-to-face interactions with the 5

petitioner, applicant, or beneficiary. Their cases usually arise from a Service Center 6

which does not conduct interviews, plus a few from District and Field Offices. The 7

underlying adjudication would have been done via online or mail-in filing. In short, 8

AAO can build the Record Of Proceeding (ROP) as it deems appropriate; it has sua 9

sponte authority to reopen any of its decisions; it may exercise Plenary Powers to 10

perform all reviews de novo as it deems appropriate; and describes itself as in a 11

similar relationship to USCIS Offices from which it reviews decisions on appeal , as 12

the Circuit Courts of Appeals have towards the U.S. District Courts in their Circuits. 13

III. Winning On The “Lozada-IAC” Motion BUT Losing On The Merits 14

As is far too often the case, some applicants, petitioners, beneficiaries, and 15

their counsel fail to grasp the reality of the situation. A recent AAO non-16

precedential case decision concerning form I-140, Immigrant Petition for Alien 17

Worker for an EB-1 Extraordinary Ability Immigrant Visa5, inspired my article: 18

“Examining Lozada and Ineffective Assistance of Counsel Claims in the Immigration 19

Benefits Application Context - A Sample Case” in Immigration Daily (August 25, 20

2014), but I have found another case that relates to an EB-5 (I-526) case which had 21

been drawn out for a long time. That EB-5 case is addressed in the next section. The 22

EB-1 case invoked Lozada and AAO simply acknowledged, without specifying how 23

the stringent requirements were met, but simply that they were met. It was really a 24

4 See 5 U.S.C. § 706(2)(A) (Administrative Procedures Act (APA) “Scope of Review”) (2013).

5 Also posted at: http://www.slideshare.net/BigJoe5/examining-lozada-and-ineffective-assistance-of-

counsel-claims-in-the-immigration-benefits-application-context-a-sample-case

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moot point because, as of the original filing of the underlying petition, the self-1

petitioner was simply not qualified for the classification sought. Merely meeting the 2

Lozada requirements by itself is insufficient. It must be understood that AAO, as 3

part of USCIS, and also exercising specific delegated authority from the Secretary, 4

simply cannot bestow any benefit for which the applicant, petitioner, or beneficiary is 5

not eligible and fully qualified. They won’t do it because they can’t do it; don’t ask. 6

IV. The Case Of The Incessant & Indefatigable6 Innkeeper 7

Just a few days ago, while I was searching for AAO’s most recent non-8

precedent EB-5 decisions, I wasn’t finding much so started to look through older 9

cases. Upon skimming through a Direct Investment (non-RC) I-526 dismissal of a 10

combined MTRR dated September 18, 2013, I hit pay-dirt. As it turned out, that 11

was the Dismissal of Motion number four (#4)! I backtracked as best I could 12

searching for the prior Dismissals dating from April 1, 2013, September 14, 2012, 13

January 10, 2012, the Appeal Dismissal of July 8, 2010, and the underlying initial 14

denial of November 17, 2009. [Those that are posted and available have been 15

hyperlinked for the convenience of the reader.] It seems that the missing-in-action 16

Sept. 14, 2012, Dismissal might have been a really good one as it is cited and 17

quoted, especially heavily in the latest available decision. According to the 4th MTRR 18

Dismissal, dated 09/18/2013, and it is the most recent found for this “Direct EB-5 19

case” as of this writing, and which was given extra care probably, in an effort to get 20

the petitioner to stop filing an endless stream of Meritless Motions? It reiterates a 21

short “alternative” analysis, on the merits, again. The following is an excerpt from 22

the AAO non-precedential decision found at: SEP182013_01B7203.pdf 23

“The final reason for dismissal in the AAO's latest decision related to an 24 insufficient explanation of why the petitioner did not comply with one of the 25

6 Alternatives considered: Insufferable; Irritating; Inexhaustible; Irascible; Irksome; Inexorable

Innkeeper; or lastly, the Hapless Hotelier.

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Lozada requirements. Specifically, the petitioner was required to indicate 1 whether he had filed a complaint with the disciplinary authority regarding 2

former counsel's conduct or, if a complaint was not filed, an explanation for not 3 doing so. See Matter of Lozada, 19 I&N Dec. at 639. 4

The petitioner submitted evidence with the present motion that was not 5

previously part of the record in the form of a letter from the State Bar of Texas 6 dated July 6, 2012. While this evidence was not previously on record, it cannot 7 be construed as new facts that were previously unavailable to the petitioner as 8 the response letter from the Bar is dated more than three months prior to the 9

date that the petitioner filed motion #3 and he should have submitted the 10 evidence with motion #3. Therefore, the petitioner has not met the 11 requirements of a motion to reopen regarding this item. The petitioner also did 12 not assert that the AAO incorrectly applied the law or USCIS policy, supported 13

by any pertinent precedent decisions, to satisfy the regulatory requirements of a 14 motion to reconsider. As such, the present motions must be dismissed pursuant 15 to the regulation at 8 C.F.R. § 103.5(a) (4). 16

Beyond the issues of the previous motion, as stated in the AAO's April 1, 2013 17 decision, even if the AAO accepted that the petitioner had demonstrated 18 ineffective assistance of prior counsel in filing an untimely motion, the 19 petitioner has failed to demonstrate that the untimely filing of the motion 20

resulted in any prejudice to the petitioner. Specifically, in the AAO's September 21 14, 2012 decision, the AAO, in the alternative to dismissing the petitioner's 22 second motion, explained at length how the new evidence submitted with the 23 first untimely motion did not remedy the break in the path of the invested 24

funds. 25

The current motion does not explain how the September 14, 2012 analysis 26

regarding the evidence submitted with the untimely motion was in error. 27 Rather, counsel asserts that the AAO subsequently ignored evidence "that 28 conclusively addresses [USCIS'] request dated September 2012." The 29 September 14, 2012 notice, however, was a decision explaining why the 30

evidence submitted with the previous untimely motion was insufficient rather 31 than a request for additional evidence. The AAO is not required to consider 32 new evidence when USCIS has previously placed the petitioner on notice of the 33 evidentiary requirements and any deficiencies. See Matter of Soriano, 19 I&N 34

Dec. 764, 766 (BIA 1988); Matter of Obaigbena, 19 I&N Dec. 533,537 (BIA 35 1988). 36

Even the evidence submitted with the current motion does not contain 37

transactional evidence (such as wire transfer receipts) tracing the path of funds 38 from [REDACTED] or [REDACTED] to [REDACTED]. Thus, the petitioner 39 has not resolved that break in the path of funds, which the AAO first identified 40 on appeal.” At p. 5 41

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This Irritating & Irksome Innkeeper presented a vague BP for a small 1

existing “hotel” (although it might actually be a “motel”). There were already three 2

“owners” for that property. The self-petitioner seems to have merely paid off three 3

people with the money he “invested” instead of purchasing equipment, supplies, 4

and/or “improvements” as alluded to in the vague BP. I am struck by the similarity 5

to Matter of Soffici, 22 I&N 158 (AAO 1998), scarily so. It’s very strange, indeed! 6

In that AAO EB-5 Precedent Decision, the petitioner purchased an existing 7

Howard Johnson Motor Lodge (that is merely industry jargon that attempts to make 8

a “motel” sound fancier that it is) in Florida and did very little else other than starting 9

to call it a “Hotel” instead. The “current” petitioner’s purchase of an existing 10

business (also a “Hotel”) that has not been, and is not slated to be, significantly 11

“restructured”, as defined; his failure to demonstrate that it qualified as a “troubled 12

business”, as defined; and did not even suggest that the business would be 13

“expanded” by 40%, as defined and required; mimicked Soffici such that one might 14

think the “current” petitioner actually copied that failed EB-5 investment. The 15

Appeal Dismissal of July 8, 2010, states that “…the petitioner has not established that 16

any of the jobs created are for qualifying employees or that the petitioner’s 17

investment will create the requisite 10 new jobs. Rather, it appears that Jai Shri Ram 18

Hospitality has actually lost three jobs since the petitioner made his investment. …”. 19

At p. 11 [Emphasis added.] This is only one of the multiple requirements that were 20

not met in this more recent non-precedential I-526 case. 21

Here is an excerpt from Soffici: 22

“ Although Ames Management was incorporated in 1997, it is the job- 23

creating business that must be examined in determining whether a new 24 commercial enterprise has been created. The Howard Johnson’s Motor 25

Lodge purchased by Ames Management had been in operation for approx- 26 imately 24 years and was an ongoing business at the time of purchase; 27 Ames Management, doing business as Howard Johnson Hotel, has merely 28 replaced the former owner. 29

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The petitioner has provided no documentation whatsoever to establish 1 that the Howard Johnson’s was a “troubled business,” as defined above, 2

prior to his purchase. He also does not claim that he will expand the hotel 3 by 40 percent as provided in 8 C.F.R. § 204.6(h)(3). The petitioner has not 4 shown the degree of restructuring and reorganization required by 8 C.F.R. 5 § 204.6(h)(2); the hotel has always been a Howard Johnson and is still a 6

Howard Johnson today. A few cosmetic changes to the decor and a new 7 marketing strategy for success do not constitute the kind of restructuring 8 contemplated by the regulations, nor does a simple change in ownership. 9 Therefore, it cannot be concluded that the petitioner has created a new com- 10

mercial enterprise.” At 166 11

V. Fallout From A Chicago Convention Center ,LLC Investment Fraud Scheme 12

by Intercontinental Regional Center Trust of Chicago, LLC and Anshoo R. Sethi 13

As they say, and I think it is true, hindsight is always 20/20 but, in this case, 14

some foresight would have been nice. This was the big scandalous case where the 15

Crooked RC Operator made many false statements to potential investors and 16

somewhere in the neighborhood of 290 desperate investors sought EB-5 immigrant 17

visas via this venture. The victims of this fraud were somewhat lucky that a 18

competitor in the EB-5 industry blew the whistle to the SEC about this scam 19

investment project. I say that they were lucky because they could have lost everything 20

instead of most of their separate “administrative fees”. They got their principle 21

investment funds of $500,000.00 returned after the SEC got a judge to freeze the 22

fraudsters’ assets and thus protect the investors’ principle still in escrow, when they 23

filed a civil suit against the RC and its crooked operator. 24

It is unclear how many of the fraud victims actually filed anything with USCIS 25

and what they did moving forward since the scandal was revealed. However, on 26

August 27, 2014, I stumbled across the latest AAO non-precedential I-526 Appeal 27

Dismissal. That latest AAO non-precedent Decision which is found at: 28

AUG062014_01B7203.pdf, (live link), was filed by one of Sethi’s fraud victims. 29

The sad conclusion is that this particular Chinese investor won’t get an EB -5 visa 30

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based on his or her “investment” in The Foundry Hotel Project, which was what this 1

fraud victim was hoping to utilize for his or her EB-5 Immigrant Visa. 2

First, I want to lay out some chronology, a timeline of sorts. The fraud victim 3

filed Form I-526, on December 27, 2012. The SEC filed a Complaint against Sethi 4

and his various commercial entities including his offending Regional Center, on 5

February 6, 2013, [this links contains my comments also, which I wrote on April 22, 6

2013, and posted the next day, after trying to proofread my own work—not an easy 7

task so forgive any typos etc…]. Anyway, the first SEC Press Release came on 8

February 8, 2013, letting everyone know about the SEC suit against the fraudster and 9

that the assets had been frozen. On April 19, 2013, a federal District Court Judge 10

ordered the funds to be unfrozen and returned. On April 23, 2013, it was announce 11

in another SEC Press Release that the funds were unfrozen and being returned to 12

investors. 13

On August 7, 2013, the fraud victim submitted something to USCIS directed 14

to his I-526 case file which was styled as some sort of “Amendment” to the then-15

pending I-526. Meanwhile, while the “Amendment” was waiting its turn for an 16

adjudicator to look it over (or perhaps was “on hold”), USCIS officially terminated 17

the Intercontinental Regional Center Trust of Chicago, LLC’s (IRCTC’s) Regional 18

Center Designation. The petitioner was not allowed to amend his or her filing 19

because that attempt was a true and impermissible “material change” prohibited by 20

long-standing administrative precedents, and the statute, of course. See Matter of 21

Katigbak, 14 I&N Dec. 45 (Reg’l Comm’r 1971) and Matter of Izummi, 22 I&N 22

Dec. 169 (Assoc Comm’r (or AAO) 1998). 23

In his or her failed effort to switch to another Regional Center project, which, 24

incidentally, was another hotel, but in Arizona this time, and I am betting that (s)he 25

did some actual Due Diligence for that second effort (unless (s)he is a complete 26

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moron). This case inspired a few articles from me and quite a few other pundits (but 1

I had already written on this topic). Please have a look at my Due Diligence articles 2

of March 21, 2013, November 15, 2011, and my Immigration Daily Blog Post of 3

April 10, 2013. The SEC paid out a hefty whistleblower award for the tip that 4

exposed the fraud and got the SEC investigation done a heck of a lot faster than 5

normal. The whistleblower’s identity was exposed in a lawsuit from his business 6

partner who wanted a share of the award money, claiming that they investigated 7

jointly which inspired another article in Fortune which is found here. 8

I would state for the record that I believe that the I-526 Petitioner in this case 9

threw good money after bad in filing the “Amendment” instead of withdrawing and 10

re-filing immediately or as expeditiously as possible. The monetary toilet was flushed 11

five more times on the futile appeal and all four meritless motions. Even when AAO 12

explained that the underlying issue was the eligibility at time of filing, (s)he could not 13

get it through a rather thick skull. Am I blaming the victim? Yes, to a certain degree, 14

for not performing any Due Diligence, and counsel, if any, for filing useless and 15

worse—MERITLESS, I-290Bs. Victims of fraud won’t get humanitarian EB-5 visas. 16

VI. Conclusion 17

I started this article discussing the very limited relief available to a self-18

petitioner who claimed Ineffective Assistance of Counsel (IAC) and had a Motion to 19

Reopen and Reconsider granted because of complying with Lozada requirements. 20

The key is in actual eligibility for the visa classification sought and due to the filing 21

date converting into a priority date for later visa allocation and issuance or 22

adjustment of status purposes, one must be eligible at time of filing. See Matter of 23

Polidoro, 12 I&N Dec. 353 (BIA 1967), which states in pertinent part: 24

“…The argument of counsel has been noted. The issue in visa 25

petition proceedings is not one of discretion but of eligibility.” 26

That’s My Two-Cents, For Now!

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About the Author

Joseph P. Whalen, Independent EB-5 Consultant, Advocate, Trainer & Advisor 238 Ontario Street | No. 6 | Buffalo, NY 14207 Phone: (716) 604-4233 (cell) or (716) 768-6506 (home) E-mail: joseph.whalen774@gmail.com web http://www.slideshare.net/BigJoe5 or http://eb5info.com/eb5-advisors/34-silver-surfer

DISCLAIMER: Work is performed by a non-attorney independent business consultant and de facto paralegal. It is the client's responsibility to have any and all non-attorney work products checked by an attorney. I provide highly-individualized training based on consultation with my clients. I serve Regional Center Principals and their counsel, potential EB-5 investors, immigration attorneys, and project developers. I am not an attorney myself although I have trained numerous attorneys and INS/USCIS adjudicators in complex issues within immigration and nationality law when I was an adjudicator there for many years. I do not prepare forms, write business plans, or create economic analyses. I do review them for clients prior to submission and suggest corrections and/or modifications to run by your attorney and investment advisor.

NOTE: I have over a decade of experience as an adjudicator for INS and USCIS and direct EB-5 Regional Center Adjudications experience having

been instrumental in reviving, greatly enhancing, and expanding the EB-5 Regional Center Program for USCIS.

NAICS Code: 611430 Professional and Management Development Training

2012 NAICS Definition

611430 Professional and Management Development Training

This industry comprises establishments primarily engaged in offering an array of short duration courses and seminars for management and professional development. Training for career development may be provided directly to individuals or through employers' training programs; and courses may be customized or modified to meet the special needs of customers. Instruction may be provided in diverse settings, such as the establishment's or client's training facilities, educational institutions, the workplace, or the home, and through diverse means, such as correspondence, television, the Internet, or other electronic and distance-learning methods. The training provided by these establishments may include the use of simulators and simulation methods.

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i Acronyms Used in this Article:

AAO Administrative Appeals Office within USCIS

APA Administrative Procedures Act [5 USC]

BIA Board of Immigration Appeals

BP Business Plan

CFR Code of Federal Regulations

DHS Department of Homeland Security

EB-5 Employment-Based, Fifth Preference Immigrant Visa Classification

FTC Federal Trade Commission

IAC Ineffective Assistance of Counsel (“claim” to support an MTReopen)

KSAs Knowledge, Skills, and Abilities (Competencies)

MTR Motion to Reopen (or to Reconsider)

MTRR Motion to Reopen and/or to Reconsider (“Combined” Motions)

NAICS North American Industry Classification System

NOID Notice Of Intent to Deny

NODI Notice Of Derogatory Information

RC Regional Center

RFE Request For Evidence

SEC Securities and Exchange Commission

USC United States Code

USCIS U.S. Citizenship and Immigration Services