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[Q] Why is escrow account used for Regional Center EB-5 cases to hold investors' funds during I-526 pendency?
For two reasons. One, RC cannot have the investor's money wired into the Limited Partnership's bank account until I-526 is approved, because under the EB-5 law, there should not be any commingling of money that is not of lawful source. Therefore, it is always prudent to wait until I-526 petition is approved before releasing the money in the escrow account to the Limited Partnership's account. Second, this is to protect individual investors who do not want to release their moneys until at least their I-526 immigrant petitions are approved, because the chances is if their I-526 petitions are approved, they should in all likelihood obtain Conditional Permanent Resident (CPR) status.
However, as noted in another section, USCIS already released an official statement stating that it is in violation of EB-5 law to guarantee the return of the initial investment in case I-829 is denied for any reason, because this comes close to a guarantee. Therefore, do not even ask the RC if they can guarantee the return of your money if your I-829 is denied. Even if the RC wants to do that, they cannot. It's like asking them if they are willing to violate EB-5 law to help you.
Basically, any RC must comply with the governing rules and parameters set by USCIS for Regional Centers, so that their RC designation is not taken away by USCIS. Their second goal is to try to minimize the risk that investors' initial investments are not lost, while enough new jobs are created so that all investors can acquire Lawful Permanent Resident (LPR) status. Really, their last goal is to try to increase the return of profit to Investors. However, you tell me how much profit the RC projects can really generate for you when the RCs have other goals to achieve? To be frank, if I were an EB-5 investor I would stay away from an EB-5 project that says they can generate very high profits while achieving other objectives. If any RC can consistently generate very good profits while achieving the above-described objectives, the principals of that RC are either geniuses or incredibly lucky people.