Borushevskyi v. United States Citizenship & Immigration Servs.

• Decision Date: 27 March 2023
• Docket Number: 19-3034 (EGS/ZMF)
• Parties: ANDRII BORUSHEVSKYI, Plaintiff, v. UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICES, et al., Defendants.
• Court: U.S. District Court — District of Columbia

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ANDRII BORUSHEVSKYI, Plaintiff, v. UNITED STATES CITIZENSHIP AND IMMIGRATION SERVICES, et al., Defendants.

No. 19-3034 (EGS/ZMF)

United States District Court, District of Columbia

March 27, 2023

MEMORANDUM OPINION

EMMET G. SULLIVAN, UNITED STATES DISTRICT JUDGE

I. Introduction

Plaintiff Andrii Borushevskyi (“Mr. Borushevskyi”), a Ukrainian citizen, filed a petition in September 2016 to immigrate with his family to the United States through the EB-5 Immigrant Investment Program. See Compl., ECF No. 1 at 1 ¶ 1, 7 ¶ 34.^[1]Defendant United States Citizenship and Immigration Services (“USCIS”) denied his petition and his later motion to reopen the denial, see id. at 11 ¶ 47, 12 ¶ 53; and the Administrative Appeals Office (“AAO”) affirmed the denial, see id. at 14 ¶ 62.

On October 10, 2019, Mr. Borushevskyi filed this action against Defendants USCIS, Director Ur M. Jaddou (“Ms Jaddou”),^[2]and Immigrant Investor Program Office Chief Alissa Emmel (“Ms. Emmel”)^[3](collectively “Defendants”) to obtain judicial review of the agency's decision to deny his petition. See generally Compl., ECF No. 1. Thereafter, the parties filed cross-motions for summary judgment. See Pl.'s Mot. Summ. J., ECF No. 10; Defs.' Cross-Mot. Summ. J., ECF No. 11. The Court referred this case to Magistrate Judge Faruqui for full case management, see Minute Order (Oct. 13, 2020); who has since issued a Report & Recommendation (“R. & R.”), see R. & R., ECF No. 19.

Pending before the Court is Mr. Borushevskyi's Objections to Magistrate Judge Faruqui's R. & R. See Pl.'s Objs. Magistrate Judge's R. & R., ECF No. 20. Upon careful consideration of the R. & R., the objections and opposition thereto, the applicable law, and the entire record herein, the Court hereby ADOPTS the R. & R., ECF No. 19; GRANTS Defendants' Cross Motion for Summary Judgment, ECF No. 11; and DENIES Mr. Borushevskyi's Motion for Summary Judgment, ECF No. 10.

II. Background

A. Factual

Mr. Borushevskyi and his wife, Nataliia Borushevska (“Ms. Borushevska”), are Ukrainian citizens. J.A. of Administrative R. (“AR”), ECF No. 16-1 at 74, 279. Together, they operate a business importing and selling foreign kitchenware in Ukraine. Id. In 2016, they decided to immigrate to the United States with their children through the EB-5 immigrant investor visa program. See id. at 74.

To satisfy the requirements of the EB-5 visa application, Mr. Borushevskyi invested in a new business venture: a limited partnership called EB5 Capital Jobs Fund 19, L.P., which was sponsored by a USCIS-approved regional center called EB5 Capital California Regional Center. Id. at 6-8, 74, 99, 101-03, 105-06, 108. Partnership funds would be used to build a new Marriot dual brand hotel in Agoura Hills, California. Id. at 99, 101-03, 10506, 108. Because this is a “targeted employment area,” USCIS regulations required that Mr. Borushevskyi invest at least $500,000. 8 C.F.R. §§ 204.6(e), (f)(1)-(2).

Mr. Borushevskyi purportedly met this capital requirement by transferring $534,920 from his account with ABVL Bank to an escrow account for EB5 Capital Jobs Fund 19, L.P. AR, ECF No. 16-1 at 99, 101-03. This capital purportedly came from the kitchenware business and, more specifically, was a reinvestment of funds that had been refunded from a cancelled contract. See id. That contract, signed in February 2014, had been for Mr. Borushevskyi to purchase $680,382 of kitchenware from a Panamanian company called Craft LMG S.A. (“Craft LMG”). Id. at 74, 76-86. He paid Craft LMG using two sources: (1) about $610,000 that he and his wife earned between 2009 and 2014, and (2) $70,000 from his line of credit with Alfa Bank. Id. at 74.

Days after Mr. Borushevskyi completed payment to Craft LMG, political turmoil descended on Ukraine. See Compl., ECF No. 1 at 6 ¶ 26. The country also entered a severe economic recession. See id. at 6 ¶ 27; Pl.'s Mot. Summ. J., ECF No. 10 at 7 & n.2. Because of these developments, he determined that it would be impossible to sell the imported kitchenware and therefore sought to modify, then cancel, his contract with Craft LMG. AR, ECF No. 16-1 at 74, 93-95. In September 2014, Mr. Borushevskyi and Craft LMG executed a cancellation agreement under which Craft LMG would refund the total contract price-a total of $680,382-by December 31, 2015. Id. Craft LMG completed this refund by July 11, 2016, id. at 97-99; and Mr. Borushevskyi deposited the refund at ABVL Bank in an account he opened for this purpose, see id. at 99, 101-03. On July 26, 2016, Mr. Borushevskyi transferred $534,920 from the ABVL account to an escrow account for EB5 Capital Jobs Fund 19, L.P. to make the EB-5 investment. Id.

On September 6, 2016, after making the EB-5 investment, Mr. Borushevskyi filed his Form I-526 petition with USCIS. Id. at 28. To accompany the petition, he filed a Memorandum on Investor's Lawful Source of Funds to explain the above narrative. Id. at 11-13. He also submitted evidence, pursuant to 8 C.F.R. § 204.6(j)(3), to document the source of his investment funds. See id. at 34-37, 39-46, 48-55, 57-60, 76-86, 88-91, 9395, 97-99. Specifically, he submitted: (1) tax returns documenting his and his wife's joint earnings; (2) an affidavit from Mr. Borushevskyi, “explaining how he earned the funds used for his investment and how he ultimately transferred his funds to the qualifying U.S. business”; (3) copies of the sales contract with Craft LMG, along with confirmation of payment and the cancellation agreement; (4) copies of bank statements to show the refund from Craft LMG to his ABVL bank account as well as the transfer from the ABVL account to the escrow account for EB5 Capital Jobs Fund 19, L.P.; (5) a copy of his line-of-credit agreement with Alfa Bank; (6) copies of purchase/sale contracts to show that he sold properties (gifted from his mother) in 2015 to repay the $70,000 he withdrew from his line of credit at Alfa Bank; and (7) an affidavit from his mother to explain how she earned the money to purchase the properties she had gifted to her son. Id.

On January 24, 2018, USCIS issued a Request for Evidence. Id. at 115-20. The agency explained that the record did not show that the funds Mr. Borushevskyi used to make his EB-5 investment came from lawful sources. Id. at 118. In response, Mr. Borushevskyi submitted additional evidence: (1) a copy of a certificate of registration with the Ukrainian government as an individual entrepreneur for the kitchenware business; (2) agreements and invoices documenting his and his wife's business activities from 2009-2013, including other contracts with Craft LMG; and (3) a certificate from Alfa Bank confirming payment and closure of the line of credit. Id. at 127-30, 132-250, 252-53.

On April 29, 2018, the agency issued a Notice of Intent to Deny his Form I-526 petition. Id. at 255-60. This Notice explained that Mr. Borushevskyi had not submitted evidence of “earnings from his business prior to the cancellation of his order and refund from Craft LMG” and that the tax statements he had submitted “do not provide lawful evidence of income earned.” Id. at 259. The Notice also stated that he failed to document the payments on his credit line with Alfa Bank. See id.

Mr. Borushevskyi timely responded to the Notice of Intent to Deny. See id. at 262-66. Along with his response, he submitted a second affidavit. Id. at 268-69. He explained to the agency that he would not be able to submit the business records requested because

he used his line of credit with Alfa Bank as his main financing tool, drawing on the credit line when necessary to purchase inventory upfront, and repaying the credit line with the proceeds of sales. Mr. Borushevskyi would repay debt on the credit line in cash and receive cash receipts from the bank teller. But he only kept these receipts until he saw payment reflected on his credit balance-there was no reason for him to hold onto them thereafter. Moreover, because he used a credit line rather than a typical bank account, the bank was unable to issue detailed statements showing individual transactions.

Compl., ECF No. 1 at 10 ¶ 45. Mr. Borushevskyi attached additional evidence with this affidavit: (1) a letter from Alfa Bank to confirm that it does not provide statements of individual transactions; (2) “further evidence of inventory” he sold; (3) registration of the “Le Mage” brand, which he and his wife used for the kitchenware business; and (4) photos to document parts of the kitchenware business. AR, ECF No. 16-1 at 127-30, 132-250, 271, 273-77, 281-93, 318-29, 331, 335.

On July 12, 2018, USCIS denied Mr. Borushevskyi's petition on the grounds that the record lacked sufficient evidence to show that his investment funds were lawfully sourced. See id. at 295-302. This denial discussed the lack of documentary evidence to support his claims as well as inconsistencies in the record. See id. One month later, Mr. Borushevskyi filed a motion to reopen the denial along with copies of five years' worth of bank statements from his personal account with Raiffeisen Bank Aval and profit/loss statements for 2009-2014. Id. at 313-79.

On October 10, 2018, USCIS denied the motion to reopen and affirmed its denial of the petition. Id. at 337-98. The agency again concluded that Mr. Borushevskyi had “[g]o[ne] on record without supporting documentary evidence.” Id. at 341. USCIS explained that the bank statements were insufficient to establish the source of his funds, that the profit/loss statements showed insufficient profits, and that the tax records showed an insufficient accumulation of funds. See id.

Mr Borushevskyi appealed USCIS's denial of the motion to reopen to the AAO on November 9, 2018. Id. at 356-67. The AAO denied the appeal on July 22, 2019. Id. at 381-85...