A well-prepared Source of Funds report is not just about providing documents; it's about avoiding the common pitfalls that raise red flags for USCIS adjudicators. Understanding these potential issues ahead of time can save you from a costly and time-consuming Request for Evidence (RFE).
Red Flag 1: Incomplete Path of Funds
This is the most common mistake. Every time the money moves, you must document it. If you transfer funds from your savings account to your checking account, and then to an international account before wiring it to the project, you need to provide bank statements for all three accounts showing the money leaving one and arriving in the next.
How to Avoid: Before making any transfers, plan the simplest possible path for your funds. Keep the number of intermediate accounts to a minimum. For every step, save a transaction record or bank statement.
Red Flag 2: Unexplained Large Deposits
When reviewing your bank statements, USCIS will look for any large deposits that don't correspond to your regular salary. A sudden, unexplained influx of cash will always be questioned.
How to Avoid: For every large deposit, you must be prepared to explain where it came from and provide documentation. If it was from a property sale, provide the sale contract. If it was a bonus, provide the pay slip. If it was a gift, provide the gift deed.
Red Flag 3: Commingled Funds
Commingling occurs when you mix funds from different sources in one account, making it difficult to trace the specific capital you are using for the investment. For example, if you deposit proceeds from a property sale into a business account that also receives daily revenue, it becomes hard to prove which money is being invested.
How to Avoid: If possible, use a separate, clean bank account solely for your EB-5 investment funds. Deposit the lawfully sourced capital into this account and make all subsequent transfers from it. This creates a very clean paper trail.
Simplicity is your best friend. The easier your financial story is to follow, the higher your chances of a smooth approval.
Red Flag 4: Use of Cash or Informal Loans
USCIS is highly skeptical of transactions based on cash or undocumented loans from friends or family. Cash is inherently difficult to trace to a lawful source. Similarly, an informal loan without a proper, commercially reasonable loan agreement will likely be rejected.
How to Avoid: Avoid using cash to accumulate your investment funds. If you must use a loan, ensure it is from a reputable financial institution and is properly secured by your personal assets. If a family member is providing funds, it is almost always better to structure it as a well-documented gift rather than a loan.
