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Tocara Investments v. Johnson

United States District Court, D. Nevada

March 14, 2017

Tocara Investments, et al., Plaintiffs
Jeh Johnson, Secretary, Department of Homeland Security, et al., Defendants


          Jennifer A. Dorsey, United States District Judge

         Mampre Minci is a Canadian national who was denied an investor visa by United States Citizenship and Immigration Services (USCIS). He filed this case seeking review of the agency's denial, and both parties now move for summary judgment based on the administrative record. I review USCIS's decision for abuse of discretion, and based on this record, there are multiple, independent reasons to affirm.

         Investment visas come with a number of perks. So, Congress has imposed several requirements that an applicant must meet before USCIS can hand them out. One of these requirements is that Minci needed to prove that he invested substantial capital into an American business. But more importantly, he had to prove that the money he invested was (1) earned from a lawful enterprise and not some criminal endeavor and (2) actually his own money (and not fronted by another foreign investor). Minci was also required to maintain his status in America during the agency's review process.

         USCIS reasonably determined that Minci failed on all these points-any one of which would be enough on its own to reject his application. First, USCIS reasonably determined that Minci failed to trace his investment funds to any source (much less a lawful one). Minci told USCIS that he invested money into a salon here in Las Vegas and that he earned his investment capital from gambling winnings. But his tax returns showed that he put most of his winnings back into the machines. And his other evidence on this point was equally unconvincing-it was either vague, related to the wrong time periods, or simply irrelevant.

         USCIS also reasonably determined that Minci failed to establish that he even invested his own money. Minci never provided USCIS with enough evidence for the agency to determine when and how Minci used his own personal funds (whether earned from gambling or another source) to invest into the salon. His bank statements and other evidence painted an incomplete picture. And finally, Minci abandoned his application at one point, which was another independent reason to deny his request.

         All in all, Minci made a haphazard effort to prove that he qualified for the visa he wanted. There were several reasons justifying USCIS's decision to deny his application, any one of which would be enough for me to affirm.[1] I therefore grant summary judgment in favor of USCIS and affirm its decision.


         A. E-2 investment visas

         The Immigration and Nationality Act allows foreign investors to apply for a special visa under 8 U.S.C. § 1101(a)(15)(E)(ii) (the “E-2 visa”). E-2 visas are coveted because they allow investors to reside in the United States for longer than other visas; even better, they are indefinitely renewable.[2]

         These visas are not easy to get. E-2 visas are only handed out to investors who inject “substantial” foreign capital into a U.S. business venture.[3] The applicant must show not only that he controls this investment capital, but that it is his own “personal capital” (and the applicant is not a front for someone else funding the endeavor).[4] The applicant must also show that he earned this money from some lawful enterprise and not any sort of criminal activity.[5]

         B. Minci's application for an E-2 visa and USCIS's denial

         Tocara owns and operates EnVogue, a Las Vegas-based salon, and Minci is Tocara's sole shareholder. In 2014, Tocara applied with USCIS to have Minci's B-2 visitor visa converted into an E-2 investor visa. Minci's application stated that he had invested well over one hundred thousand dollars into EnVogue, and that he therefore was a foreign investor entitled to an E-2 visa. Minci told USCIS that he was a professional gambler and that the source of his investment came from his winnings.[6] His application explained that he had started EnVogue with his ex-wife and that, after their divorce, he had taken over operating the salon on his own. He detailed how he had invested a significant sum in various expenses related to running EnVogue, including: rent, advertising, furniture, inventory, telephone, and supplies.[7]

         Just a couple weeks later, USCIS sent Minci a letter requesting more evidence to substantiate that the money he invested into EnVogue came from a lawful source.[8] The USCIS's letter detailed the sorts of evidence he should provide, including tax returns and copies of any wire transfers or checks that would allow USCIS to trace the investment funds to a lawful source.[9] Minci replied to USCIS's request, first by stating that he was going through a divorce and that his wife would not give him all the records, and second by providing a business valuation and other documents detailing EnVogue's and Tocara's assets and solvency (although it is not clear why the company's assets mattered at this point).[10]

         A few months later, USCIS sent Minci another letter, once again asking for more evidence and explanation about the source of the funds he used to invest in EnVogue.[11] Minci mostly responded by rehashing the same explanation and evidence: he earned the investment funds by gambling, and his tax returns and other documents showed that.[12] He also noted that he invested in the business through his then ex-wife's credit cards, but that he was still unable to provide those records because she would not give them to him.[13] Shortly after, the USCIS issued a decision on Minci's application, denying it, primarily because Minci did not meet his burden to trace the funds he invested into EnVogue back to a lawful source.[14]

         Six months later, USCIS reopened Minci's case, giving him yet another chance to prove that his investment funds came from a lawful source. The USCIS also noted that there was insufficient evidence showing that Minci had actually invested any funds himself personally, and that much of his evidence related to money he invested into operating the business, not a capital investment into the initial enterprise.[15] Minci responded, providing additional tax and other documents showing that he did indeed earn substantial money gambling.

         Finally, in March of 2016, the USCIS issued a final decision denying Minci's E-2 visa application.[16] The agency identified three problems. First, Minci still had not proven that his investment funds came from a lawful source.[17] Although he said that he earned this money gambling, Minci's tax returns showed that once his losses were accounted for, he earned little, if anything, from that enterprise.[18] There were also inconsistences between what Minci had originally told the USCIS and what his documentation stated. For example, Minci's tax statements indicated that he lost more at certain casinos than he stated in his communications to the USCIS.[19] The USCIS also noted that much of Minci's evidence pertained to his income and investments after EnVogue was operating profitably, not the relevant time period, which is when EnVogue was getting off the ground.[20]

         The next problem was that Minci had not shown that he truly risked his investment because he had not provided any documentation showing that he irrevocably committed these funds to EnVogue.[21] In effect, Minci appeared to be reinvesting EnVogue's own money as operating costs, not putting his own personal capital at risk. The final problem was that Minci appeared to have abandoned his application by going back to Canada before the review process was complete.[22]


         A. I review USCIS's decision for abuse of discretion.

         Although the parties move for summary judgment, my review of an agency's action under the APA is limited to the administrative record.[23] Whether to grant an applicant E-2 status is a matter committed to “the discretion of USCIS.”[24] My role is simply “to determine whether or not as a matter of law the evidence in the administrative record permitted the agency to make the decision it did.”[25]

         I can reverse only if the applicant shows that the agency abused its discretion, [26] which means either (1) it applied the wrong law or (2) its factual findings were not supported.[27] The burden of proof for establishing E-2 visa eligibility rests on the applicant, and he must prove his eligibility by a preponderance of the evidence.[28] If an agency denies an application on multiple grounds, the burden is on the applicant to show that the agency abused its discretion on all grounds of denial.[29]

         At the outset, Minci argues that I should ignore the normal abuse-of-discretion standard because USCIS made a fundamental legal error that poisoned all of its findings: it applied the wrong burden of proof. Minci points out that the agency never explicitly mentioned in its decision what burden of proof applied to his application. And he contends that he provided enough evidence to easily meet the applicable preponderance-of-the-evidence standard. Thus, Minci concludes, the agency must have applied the wrong standard.

         I disagree. An agency is not required to state the applicable burden of proof in its decision, and courts presume that an agency is aware of the law and applies the appropriate standard (unless there is a reason to think otherwise).[30] There is no indication that USCIS applied the wrong standard here. USCIS is well versed in the preponderance-of-the-evidence standard; I cannot assume the agency applied a different one without any evidence suggesting that is the case. What Minci is really asking for is a district court to consider his immigration application on the merits and in the first instance, which I cannot do.[31] I therefore review USCIS's decision for an abuse of discretion.

         B. USCIS did not abuse its discretion by denying Minci's E-2 visa.

         There are three reasons USCIS did not abuse its discretion in denying Minci's application for an E-2 visa, and any of them is enough on its own to uphold the agency's decision: (1) Minci failed to prove that he earned his investment funds in a lawful endeavor, (2) he failed to prove that he risked his own money, and (3) he abandoned his application by going back to Canada.

         1. USCIS did not abuse its discretion in finding that Minci failed to adequatelytrace his ...

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