Reid & Wise warns EB-5 investors about harder-to-fight national security denials

Reid & Wise LLC says national security denials are becoming a major risk for some EB-5 investors, especially Chinese nationals whose backgrounds or source of funds touch sensitive sectors. The firm says the best defense comes before filing because the EB-5 Reform and Integrity Act gives USCIS broad discretion and limits court review.

Why it matters: - National security denials can derail EB-5 cases with fewer appeal options than ordinary documentation or compliance denials. - Chinese investors face heightened risk when their backgrounds or source-of-funds chains touch sectors the U.S. government treats as sensitive. - Reid & Wise says preparation before filing is critical because later challenges are unusually difficult.

What happened: - Reid & Wise LLC warned that national security denials have become one of the most significant risks for certain EB-5 immigrant investors. - The warning focused on Chinese nationals whose backgrounds or source of funds intersect with sensitive industries, universities, research institutions, or companies tied to the Chinese government or military. - Immigration attorney Fankai Oliver Yang said investors should examine source-of-funds risks at the planning stage, not after a Request for Evidence arrives.

The details: - The EB-5 Reform and Integrity Act gives USCIS broad discretion and limits judicial review in national security denials. - That structure narrows the usual path of appeal, including motions to reopen or reconsider, Administrative Appeals Office review, and federal court review. - Reid & Wise says these denials often arise from source-of-funds review, not from the investor’s own conduct. - The concern can be whether the money came from someone who worked for a state-owned enterprise, a sanctioned company, or a firm that has drawn U.S. government attention, such as Huawei. - The firm says USCIS can rely on relatively indirect links when making a national security finding. - Yang said the agency often treats the issue as a chain of associations rather than a direct allegation of wrongdoing. - At the I-526E stage, a denial typically goes to the Administrative Appeals Office, with federal court review potentially blocked. - At the I-829 stage, the case moves into removal proceedings, where the investor can contest evidence, the government carries a burden of proof, and expert testimony is available.

Between the lines: - The firm’s advice reflects a record-building strategy for a system that may not allow meaningful cleanup after filing. - If a fact is missing from the initial file, later correction may not be enough because the adjudicator and any reviewer are limited to the existing record. - Yang said overly broad declarations can backfire if later evidence shows they were inaccurate. - That makes careful, narrow, fact-based documentation more valuable than broad claims meant to reassure.

What's next: - Reid & Wise recommends building the file with a detailed explanation of the source-of-funds person’s role, the nature of the income, and the applicant’s own knowledge. - The firm also recommends expert opinions when the facts suggest a national security issue could arise. - Reid & Wise says investors should treat the initial filing as if it will be challenged later.

The bottom line: - For some EB-5 investors, especially those with Chinese ties or sensitive-source money, the hardest fight may be avoiding a national security denial in the first place.