EB5 Investors Magazine Volume 2 Issue 2 | Page 31

Aside from maintaining professional relationships with existing clients , the lure of dual representation can result in a steady and lucrative income stream . This alone may be an overwhelming factor influencing an immigration practitioner seeking to grow her practice . Moreover , when it comes to representing both sides of the EB-5 investment , practitioners are often aware of the truism that , “ if you don ’ t , somebody else will .”
However , at risk to the EB-5 practitioner is that a doctrinaire approach to MR 1.7 2 may actually result in the EB-5 practitioner losing regional center and I-526 work . Conflicting and competing interests between a regional center ’ s goals and the individual EB-5 investor ’ s goals are often omnipresent . The immigration practitioner must discern those conflicts in advance in order to determine if dual representation makes the most sense and mitigation is viable . In most cases , dual representation is not worth the risk .
Conducting due diligence on clients
Discerning those competing interests requires the immigration practitioner to conduct due diligence on both parties . The process to vet the regional center client and the individual investor client differs greatly because each party ’ s goals and expectations differ .
Regional centers and project developers have one primary goal : secure the funds necessary to finance their projects . Their secondary goal is to ensure the funding is steady such that developments are completed . Perhaps their last goal is to repay investors once the project has been completed and generates revenue . The dangers of not setting clear expectations with regional center clients is that the immigration practitioner may find herself having to indirectly or unwittingly recruit EB-5 investors on behalf of the regional center .
On the other hand , EB-5 investors have a different primary goal : secure a permanent green card . This goal is typically so steadfast and overpowering that it can muddy an EB-5 investor ’ s ability to vet the soundness of a regional center project , notwithstanding their secondary goal of ultimately recouping their investment sometime in the future . Most EB-5 investors also bring with them valid , but sometimes misguided , expectations that the immigration practitioner will assist in conducting due diligence of the regional center ’ s business plans and projections . Practitioners who have not clearly addressed these expectations in advance will inevitably find themselves having to waddle through these conflicts when they arise during actual representation .
With these goals and expectations in mind , we will address how they affect the immigration practitioner in actual practice .
Advising on immigration issues
Both regional center and individual investor clients typically expect immigration practitioners to advise on immigration issues as well as non-immigration issues .
ABA Model Rule 1.7 : Conflict of Interest
“ The EB-5 practitioner can only rely on previously acquired knowledge of EB-5 rules and regulations , actual recent experience in the field , and information exchange among their colleagues . Everything else is mere guesswork .”
Advising on immigration issues can be difficult . USCIS policies are often unclear and frequently changing and are typically only revealed through the piecing together of a request for evidence ( RFE ) or a notice of intent to deny ( NOID ) parceled out among the EB-5 community . Couple this with average processing times — officially quoted at 13 months for I-526 petitions and 10 months for I-924 petitions — and it can be difficult for the EB-5 practitioner to really know what aspects of the regional center ’ s project or the EB-5 investor ’ s background contributed to a successful adjudication . The EB-5 practitioner can only rely on previously acquired knowledge of EB-5 rules and regulations , actual recent experience in the field , and information exchange among their colleagues . Everything else is mere guesswork .
To stay competitive , EB-5 service providers and project developers look for new and creative ways to differentiate themselves from an ever-growing field of competitors in response to the sluggish EB-5 processing times and the shell game of USCIS constantly changing the rules of engagement . In representing their regional center and project developer clients , the authors are increasingly seeing an expansion of service offerings by regional centers as a result . These additional offerings often arise at the urging of other practitioners , because competitors are employing them to raise untold amounts of funding in China , or simply because it seems that everyone else is doing it .
The problem with a following-the-herd logic is that it conflates profitability and reliability . Just because a project is selling does not mean that it will be approved by USCIS come adjudication time . Bluntly speaking , anything done today will neither succeed nor fail for at least one year based on USCIS processing times .
Furthermore , the competing interest between regional center and EB-5 investor in this scenario is that what the regional center promises the EB-5 investor during initial negotiations may not necessarily be what is reflected in the actual contract signed between both parties during the subscription phase . As the last link to this chain , the immigration practitioner will find herself having to explain to the EB-5 investor why certain promises were not kept . In a more extreme example , a regional center may simply expect the immigration practitioner to mollify the EB-5 investor with whatever tactics necessary .
Practitioners should resist the temptation to be swept up in the herd of what the market is doing and instead , focus on taking a conservative approach grounded in logic based on their experience of what has been tried and true . Whatever trendy and creative approach is selling today may form the basis of a blizzard of USCIS NOIDs sometime in 2015 .
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