EXHIBIT A TO COMPLAINT FOR DECLARATORY RELIEF

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TO:

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DECISION

DATE:

U.S. Otpltrtmt:nl vf Homeland Sccuriry U.S. Citizenship an d Immigrati 0£1 Ser..ic::es lmmigmm lnve:.to r Program 20 MassachuRen.c: Ave. NW. MS 2235 Washington. DC 20529-2090

U.S. Citizenship and Ilnmigration Services

Application: Form I-526

File: TliRil.JUlHH

Your Form 1-fi!lfi, Tmmigranl; Pet.itiun by Alie n Ent repren eur, fi led by rlenied fol' the following reason (s) :

has been

See Attachment

If you dt=!Rirfl to appeal Lhi~ decision, or file a mot ion to reopen and/or reconsider, you may d o l:iO. Your not.iee of appeal m· motion must be fllcd on Form H~90B, Notice of Appeal or Motion, wj thin 33 calendar days of t he date of this notice. A fi ling fee of $630.00 is req uir ed, paya ble to V.S. Department of Homeland Security, wit h a check or money order from a bank or ot her institution located in the United St a tes. If no appeal Ol' motion io filed within, t he time allowed this decision will be the final decision in this matter . The appeal or motion may notJ~ ... §J.~d directly with the MQ~ I niti::~ l filin g of lht! Form I ·290B shou ld be sen t to:

USCJS OR P .O. Box 2 1100 Phoenix, AZ 85036 (F or Postal Service Delivery)

users Attn: 290H 1820 K Skyharbor Circle S, Suite 100 P hoenix, A2 85034 (For Express Maili Courier)

In s upport of your appeal , you may submi t, a br ief andlor additional e-vidence, ei ther with t h e initial filing or within :~o calendat days of the initial filing. If necessary, you may requeRt a dd itiona l t.ime t.o submit a br ief. Such request mus t. also be made wi th in ao cale ndar days of tiling. Note, however, that an extension oftimc to ftle the Appeal may not be gTanted. Any brief, written statement, or ot he1· Cv'idcncc not filed with Form I -290B, or any requ~st ±or additional time for the submission of a brief or othe1' material m ust be sent directly to the AAO at the following address:

USCrS Adminis tJ'a tive Appeals Office U.S. Ci tizenship and Immigration Services 20 :\1.assachw:st:ltt6 Avenue, NW, MS 2090 Washington, D.C. 20529-2090

Form l-292 ww w.uscis.gov

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NOTICE OF DECISION

Form I ·526, Immigrant Petition by Alien Entrepreneur Quartzhurg Gold LP

I. Procedural Histon

(Petitioner) filed a Fonn I-526, Immigrant Petition by Alien Entrepreneur, seeking immigrant visa classification pursuant to section 203(b)(5) of the Immigration and Nationality Act (INA) on August 30, 20 12.

Petitioner assens eligibility based on an investment in the Idaho State Regional Center (the ··Regional

Center'') pursuant to the Immigrant Investor Program' created by section 610 of the Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies Appropriations Act, 1993, Pub. L. No. I 02-395, 106 Stat. 1828 ( 1992), as amended by section 116 of Pub. L. No. I 05-119, Ill Stat. 2440 ( 1997); section 402 ofPub. L. No. 106-396, 114 Stat. 1637 (20()0); section 11037 of Pub. L. No. 107-273, I 16 Stat. 1758 (2002); section 4 of Pub. L. No. I 08-156, I I 7 Stat. 1944 (2003); and se<:tion I of Pub. L. No. I I 2-176, I 26 Stat. 1325 (20 12).

This investment is located within a targeted employment area ("TF.A ''). The evidence presented asserts that the petitioner invested $500,000, on June 20, 20 l 2, into Qmu1zburg Gold LP- the New Commercial Enterprise (the "NCE"). TheNCE proposed to pool $80 million from 160 immigrant investors and lend the entire amount to Idaho Slate Gold Company, which will in turn Joan the money to various mining companies- the Job Creating Enterprises (the •'JCE"). The JCE inknds to mine gold in varkms areas of Idaho and Montana. The NC.E and JCE are principa11y doing business within a targeted employment area (TEA).

INA § 203(b)(5)(A) provides classification t.o qualified imrnigrnnts seeking lo enter the United States for the purpose of engaging in a new cornrncrcial enterprise (including a limited partnership)·

(i) in which such alien has invested (after the date of the enactment ofthe Immigration Act of 1990) or, is actively in the process of investing, capital in an amount not less than the flmount specified in subparagraph (C)2, and

1 On September 28, 20] 2, Pre~ident. Obama signed into law Senat.e bill S. 3245 which amended section 610 of P.L. 102-395. S. 3245 struck the word "pilot" from section 610 of P.L. 102·395 and extended the Immigrant Investor Program until Septembe1• 30, 2015.

~The amount of capitalrequil'ed .is $1,000,000, except when making an investment in a Largeted employment area, the amount necessary to make a qualifying investment is $500,000. I::.J'A § 203(b)(5)(C)(i)- (ii); 8 C.F.R. § 204.6(0(1)- (2).

Attachment to Fo1·m I-292

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(ii) which will benefit the United States economy and create full-time employment for

not fewer than I 0 United States citizens or aliens lawfully admitted for permanent residence or other immigrants lawfully authorized to be employed in the United States (other than the immigrant and the immigrant's spouse, sons, or daughters).

In addition to the governing regulations, notably 8 C.F.R. § 204.6, legacy Immigration and Naturalization Service (INS) published four precedent decisions regarding the EB-5 immigrant visa classification, namely:

Matter ofSoffici, 22 I&N Dec. 158 (Assoc. Comm'r 1998); Matter of Izummi, 22 l&N Dec. 169 (Assoc. Comm'r 1998); Matter of Hsiung, 22 l&N Dec. 20 I (Assoc. Comm'r 1998); and Matter of Ho, 22 l&N Dec. 206 (Assoc. Comm'r 1998).

Based upon a review of the initial record, Petitioner did not establish eligibility for the benefit sought.

Accordingly, U.S. Citizenship and Immigration Services (USCIS) issued a Notice of Intent to Deny (NOlO) on September 19,2013. Subsequently, two Requests For Evidence (RFE's) were issued February 4, 2014, and October 14, 2014. In the most recent RFE dated October 14, 2014, USC IS notified Petitioner that the following eligibility requirements needed further clarification or additional evidence:

• Petitioner has Placed the Required Amount of Capital At Risk;

• Employment Creation I Comprehensive Business Plan. ; and

• Invested Capital Was Obtained Through Lawful Means;

On October 14, 2013, Petitioner responded to the NOlO with the submission of additional evidence. The

documents submitted in the response are as follows:

Copy of Remittance Application Form dated June 19,2012 submitted by Petitioner to Standard Chartered Bank, instructing a withdrawal of$60,000 USD from Petitioner's account to Westlead Capital Inc. as full payment of the processing fee;

Copy of Telegraphic Transfer Credit Advice dated June 19, 2012, evidencing receipt of processing fee;

Letter to Petitioner from Westlead Capital Inc. principal Raymond Ku evidencing processing fee has been paid in full.

As a supplement to the record, an interfiling dated January 19, 2015, was received and accepted by USCIS. The interfiling requested consideration of the following documents:

Letter from Quartzburg Gold LP's General Partner, Sima Muroff, dated November 20, 2014, advising all petitioners that the prohibited call option has been waived by the General Partner;

Letters signed by petitioner and other investors showing she was informed of the waiver of the

Attachment to Form I -292

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call option, and accepted the new tenns;

I .ist of all petitioners receiving the call option waiver letter, which includes- -

However, based on a review of the entire record of proceeding (including the most recent RFE response and interfiling), USC IS concludes that Petitioner has not established eligibility for the benefit sought. Therefore, the petition is denied for the reasons discussed below.

1. Capital At Risk

Applicable regulations provide that, in order "[t]o show that the petitioner has invested or is actively in the process of investing the required amount of capital, the petition must be accompanied by evidence that the petitioner has placed the required amount of capital at risk for the purpose of generating a return on the capital placed at risk. Evidence of mere intent to invest, or of prospective investment arrangement"i entailing no present commitment, will not suffice to show that the petitioner is actively in the process of investing. The alien must show actual commitment of the required amount of capital.'' 8 CF.R. § 204_6(j)(2)- For the capital to be "at risk•' there must be a risk of Joss and a chance fnr gain.

In order to demonstrate that Petitioner has placed such capital at risk for the purpose of generating a return, Petitioner must first present evidence that he or she has made a qualifving investment of the minimum required amount o[capital. The regulations define "invesf' to mean a contribution of capital, but state that a contribution of capital in exchange for a note, bond, convertible debt, obligation, or any other debt arrangement bet\veen the alien entrepreneur and the new commercial enterprise, does not constitute a contribution of capital, and thus, does not constitute a qualifying investment. 8 C.f.R. § 204.6(e).

a- Qualifying ConJrihutkm ofCupiJal

Under 8 C. F-R. § 204.6(j)(2)(iv), in providing evidence that a petitioner has invested or is actively in the process of investing the required amount of capital, a petitioner may provide "re lvidence of monies transferred or committed to be transferred to the new commercial enterprise in exchange for shares of stock (voting or nonvoting, common or prefened). Such stock may not include tenns requiring the new commercial enterprise to redeem it at the holder's request''.

According to l11atter of lzummi, in the context of a sell option, entering into a redemption agreement is, in effect, entering into a debt arrangement and is prohibited by 8 C.F.R. § 204.6(e). 22 I&N Dec. at 188. "'For the alien's money tmly to he at .. isk, the alien cannot enter into a partnership knowing that he already ha<; a willing buyer in a certain number of years, nor can he he assured that he will .. eceive a certain price. Olhcrwisc, the arrangement. is nothing more than a loan .... " ld at 186. Moreover, in no event may a

petitioner ~ntcr into such an agreement prior to the end or the two· year period of conditional residence. /d. at l86. An investment assumes th~t risk exists; thus, tht: imrni&,sranl investor must go into the investment not.

knowing for sure if he or she will be able to sell his or her interest at all after ht: or she obtains his or her unconditional permanent resident status, and if he or she is successful in sdling his or h~r interest, the salt.: price may be disappointingly low or surprisingly high. ld at 186-187. This way. lhc immigrant invcsl.or

Attachment to Form I -292

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risks both gain and loss. Id at 187.

A review of the documents showed that at the time of filing, the Petitioner had not shown, by a preponderance of the evidence, that the capital invested was at risk due to the call option mentioned in the following instances:

Page 27 of the Confidential Private Offering Memorandum and Section 12. II of the Limited Partnership Agreement contain a "call option" in which the Partnership can "repurchase the interest of a Limited Partner for a purchase price of either (i) $550,000 in cash or (ii) 400 ounces of gold." A "call option" is suggestive of a prohibited redemption mechanism whereby an issuer has the ability to ·'call" (redeem) the covered securities in exchange for agreed upon consideration ($550,000 or 400 ounces of gold). This ·'call option'' can be more accurately characterized as a guaranteed return. Matter of Jzummi prohibits redemption agreements and guaranteed returns.

Petitioner sought to retroactively remedy the filing by responding that all potentially problematic references to a "call options" would be removed from the organizational documents. Each investor received notification, and agreed to the new terms to remain subscribed in the project. The letter sent to and accepted by petitioner showed that the Call Option (400oz gold or $550,000 cash) reference has been removed from each pertinent agreement with the investor.

The letter stated, in part. on Page 2 of the letter sent to all investors by Sima Muroff, General Partner:

·'Section 12.11 (3) of the Limited Partnership Agreement stated that the General Partner has a "Call Option" allowing it to choose to repay investors in gold rather than cash. Unfortunately USC IS challenged this arrangement by claiming that it violated rules requiring capital to be "at risk" and prohibiting repayment guarantees. For the project to be approved the General Partner has waived the ·'Call Option." Nevertheless, we intend to fulfill our commitments to our investors using a method that fully complies with the EB-5 rules and regulations. In the latest RFE, USC IS has requested confirmation from each investor of his or her acceptance of the General Partner's waiver of the Call Option, and we attach a simple letter to that effect for you to sign, scan, and return by email to Jason Blatt at: jasonb@westleadcap.com for inter-filing with USC IS to be part of the RFE response."

2. Ineligible at time of filing

Although petitioner has sought to render this petition approvable by removal of the call option. "A petitioner must establish eligibility at the time of filing; a petition cannot be approved at a future date after the petitioner becomes eligible under a new set of facts. See Matter of Katigbak, 14 I&N Dec. 45, 49 (Comm. 1971 ). Therefore, a petitioner may not make material changes to a petition that has already been filed in an effort to make an apparently deficient petition conform to Service requirements." Matter of Izummi, 22 l&N Dec. 169, 175 (Assoc. Comm'r I 998); see also 8 C.F.R. § I 03.2(b)(J).

II. Conclusion

In summary, USCIS concludes that Petitioner has failed to establish by a preponderance of the evidence that the Form l-526 complies with applicable legal requirements. Consequently, USC IS has determined, based on the initial evidence submitted upon filing and after consideration of all additional evidence submitted in response to the NOID dated September I 9, 2013, as well as the interfiling dated January I 9, 20 I 5, that

Attachment to Form I -292

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Petitioner is ineligible for classification under INA§ 203(b)(5)(A).

In visa petition proceedings, Petitioner bears the burden of establishing eligibility for the benefit sought. See

Matter of Brantigan, II I&N Dec. 493 (BIA 1966). As Petitioner has not satisfied her burden of establishing

eligibility, the Fonn 1-526 is denied.

If Petitioner disagrees with this decision, or if Petitioner has additional evidence that shows this decision is

incon-ect, Petitioner may file a motion or an appeal to this decision by filing a completed Fonn 1-290B,

Notice of Appeal or Motion, along with the appropriate filing fee. A copy is enclosed. Petitioner may also

include a brief or other written statement and additional evidence in support of the motion or appeal. The

Fonn I-290B must be filed within 33 days from the date of this notice. If a motion or appeal is not filed

within 33 days, this decision is final.

Petitioner must send the completed Fonn 1-290B and supporting documentation with the appropriate filing

fee to:

users r-290B

P.O. Box 660168

Dallas, TX 75266

For an appeal, Petitioner may request additional time to submit a brief within 30 calendar days of filing the

appeal. Any brief, written statement, or evidence in support of an appeal that is not filed with Fonn l-290B

must be directly sent within 30 days of filing the appeal to:

DHS/USCIS

Administrative Appeals Office (AAO)

20 Massachusetts Ave., N.W., MS 2090

Washington, DC 20529-2090

For more infonnation about the filing requirements for appeals and motions, please see 8 C.F.R. § I 03.3 or

1 03.5, or visit the USCJS website at \\W\\.uscis.gO\.

Attachment to Form I -292