Questions and Answers: Documentation of Comingled Funds

Recently, USCIS released materials used to train officers in the adjudication of EB-5 cases. This document well instructed us on how to trace the source of the investment fund. The original text reads: “An alien may show a large amount of capital in an investment or bank account, but be unable to show where it was before the account was opened, look out for new accounts and ask where large amounts of unexplained capital came from.” The law only requires investors prove that the money they will invest into the EB-5 project was legally obtained. The investor should not be asked to explain the source of all the money in his or her bank account. To our understanding, if the investor’s account contains one million dollars, and the investor is investing $900,000 in a Targeted Employment Area (TEA), the investor need only explain the source of funds for the $900,000 investment.

Response: The source of comingled funds in an investor’s account may need to be documented in order to demonstrate compliance with 8 CFR 204.6(e) and 8 CFR 204.6(j)(3) in certain circumstances. Oftentimes, the transfer of investment funds involves multiple transactions from different sources. It may not be apparent from the initial record which funds are for the EB-5 investment and which funds are to be used for other purposes. In addition, 8 CFR 204.6(g)(1) requires that the source of all of the EB-5 and non-EB-5 capital in the EB-5 capital investment project must be identified and shown to have been derived from lawful means.

Taken from USCIS Quarterly EB-5 Stakeholders Meeting on June 30, 2011