EB-5 Path of Funds and Money Tracing

Matter of Ho and Matter of Izummi support USCIS's longstanding requirement that the invested funds be traced to a lawful source.

Recent AAO decisions continue to apply the complete-path approach.

Path of funds analysis should show how the investor's qualifying capital moved from the documented lawful source into the new commercial enterprise or other qualifying investment destination. USCIS and recent AAO decisions continue to examine whether the record traces the complete path rather than merely showing the final deposit. The path narrative should identify each material account, transfer, intermediary, conversion, and recipient and should reconcile the amount invested with the source-of-funds evidence. A concise transaction schedule or diagram can help, but it should correspond exactly to the underlying bank and transaction records.

The investor should preserve statements showing incoming and outgoing transfers for relevant accounts.

A transfer receipt without evidence of where the remitter obtained the funds can leave a gap.

Intermediate accounts should be documented when they form a material part of the transfer chain. Bank statements should generally show both the incoming funds and the outgoing transfer so the adjudicator can connect one step to the next. Where an account contains commingled funds, the record may need enough history to explain which deposits supplied the EB-5 transfer and whether unexplained deposits create a tracing issue. The investor should not assume that a wire confirmation alone proves the origin of the remitted money, particularly when the remitter, account holder, and investor are different persons.

Where one person receives local currency and another person or company remits U.S. dollars, the record should explain the exchange relationship and identify the persons involved.

Currency conversion can add multiple evidentiary layers because the person surrendering local currency may differ from the person or entity remitting US dollars. The file should identify the exchanger or financial institution, document both sides of the conversion where possible, and show how the converted funds reached the EB-5 investment. Informal or third-party exchange arrangements may require additional evidence concerning the parties' identities, relationships, accounts, and lawful source. Dates, exchange amounts, and resulting remittances should reconcile so the conversion does not create an unexplained break in the transaction chain.

This requirement is particularly important where relatives, companies, exchangers, or intermediaries participate in the transfer.

Current EB-5 law expressly requires identification of persons who transfer investment capital into the United States on the investor's behalf. When relatives, businesses, exchangers, friends, or other intermediaries participate, the filing should explain why the third party was involved and whether that person was merely a remitter or was actually the donor, lender, or other source of the capital. The record should preserve the distinction between source and path while documenting both. Identity records, account statements, transfer instructions, exchange evidence, relationship evidence, and source documents may all be relevant depending on the transaction.

Transfer dates, sale dates, account balances, loan funding, and currency conversions should reconcile.

A remittance that occurs before the claimed source transaction may require explanation or different evidence.

The transaction chronology should make economic and documentary sense from the source event through the final investment. Sale proceeds should ordinarily follow the documented sale, loan proceeds should correspond to the loan funding, and transfers should match the balances shown in the relevant accounts. When dates appear out of sequence, amounts change through exchange or fees, or funds move through several persons, the filing should explain the reason and provide objective records. A chronological table can expose gaps before filing and can help reconcile bank statements, contracts, tax records, wire confirmations, and NCE receipts.

• Bank statements
• Wire confirmations
• SWIFT records
• Exchange agreements
• Receipts
• Intermediary statements
• NCE account records
• Transaction chronology

A strong path-of-funds file is built at the transaction level. The record may include complete bank statements, wire and SWIFT confirmations, exchange agreements, receipts, intermediary statements, identity documents, gift or loan records, and evidence of receipt by the new commercial enterprise. Foreign-language documents should be translated as required, and account numbers or dates should remain consistent across the narrative and exhibits. A flow chart is useful only as a roadmap; it should never substitute for the records proving each material transfer. The final schedule should reconcile the amount traced with the amount claimed as qualifying EB-5 capital.