EB5 INVESTORS M AGAZINE 72 While perhaps not deliberately, IPO considers the phrase “indirect source” broadly in its adjudication process. Consider adjudications from the robust Chinese market of a few years ago. Many investors used the “loan model,” whereby a refinanced real property was often the investor’s only significant asset and subjected t he investor to a huge debt service. Many investors operated very close to the bone. Adjudicators at IPO were often skeptical and employed a World Ba n k-publ i shed subsi stence living calculator to dispel the suspicion that there might be undisclosed unlaw ful income that was a idi ng t he chosen l i fest yle a nd t hus i ndi rect ly f undi ng t he i nvest ment. Adjudicators used t he World Bank poverty levels as a litmus test to see if it was credible that the Chinese investors would i nve s t su c h huge pr op or t ion s of t he i r o ve r a l l wealth in EB-5. INTEGRITY OF THE PROGRAM E x a m i n i n g t he s o u r c e o f a d m i n i s t r at i v e fe e s i s p r o b a b l y a l s o a f a i r e x p r e s s i o n o f U S C I S’ responsibi l it y to ensure prog ra m i nteg r it y. “It i s c r it i c a l t o o u r m i s s i o n t h at w e a d m i n i s t e r t h e E B-5 p r o g r a m w i t h u t m o s t v i g i l a n c e t o e n s u r e p r o g r a m i n t e g r i t y,” i t s a y s i n P o l i c y Memorandum 602-0083 (May 30, 2013). Arguably, a l low i ng un law ful ly obta i ned funds to be used for administrative fees v iolates the integrit y of t he prog ram, as does allow ing an investor who is ot her w ise a suspected criminal to use his or her lawfully obtained funds for EB-5 while living in sumptuous surroundings t han k s to criminal proceeds. The e x tension of t hat a rg ument is t hat, if crimi na l it y or fraud is i nstr umenta l — a prox imate cause — in mak ing the investment p ossible, t hen it i s a n i nd i re c t sou rce of t he i nvest ment a nd t he a f fected pa r t of t he investment will not be considered capital. For example, an investor who funds through the loan model might be asked whether the term on the loan is so short and the interest rate so high, that the loan is an obvious sham, or whether it is usurious and therefore an affront to the integrity of the EB-5 program. Clearly, the integrity of the program may be considered compromised if the loan is issued based on an investor’s fraud or misrepresentation to a bank. Or the adjudicator may see that the investor’s child is attending a $40,000 per-year university and living off-campus and ask how it is funded in order to verify that the representations made to the Department of State at F-1 visa processing regarding the source of tuition payments do not encumber the same money that the investor claims as his/her EB-5 investment capital.