Third Party Oversight with Peyman Attari – Episode 23

Third Party Oversight with Peyman Attari

Third Party Oversight with Peyman Attari – Episode 23

During the last stakeholder’s meeting a few days ago, USCIS stated that they wanted to encourage third party oversight. There has been a lot of speculations regarding the application of this in EB5, which is why Mona Shah and Mark Deal invited Peyman Attari, President and CEO of AISA to shed light on this matter.


The topic of a lot of EB5 conversations lately was about EB5 Program Director Nicholas Colluci’s encouragement to use third party oversight. There were a lot of speculations from lawyers, developers, and investors who were not familiar with this terminology. For us to better understand this, Peyman Attari from AISA simplifies the different applications of third-party oversight in the EB5 market.
Up until recently, AISA has been providing investment advisory services to private, individual investors only. With EB5 market considered as an emerging industry, the need for third party oversight has increased to protect a lot of participants who do not have the experience in either finance or investments.
What is AISA?

  • AISA is a registered firm providing extensive investment advisory services in both the EB5 investor program as well as financial research and analysis. AISA looks for the right EB5 project with the right amount of risk criteria for their client to invest in. AISA represents not just individual clients but currently, even the developers and sponsors of the projects.

What is third party oversight when it comes to EB5?

  • Third part oversight is not just involved in the disbursement of the funds. It is involved in the continuum of putting the deal together until the ongoing to the management of the transaction


  • There are 3 areas of oversight that can be provided in the EB5 market:


  1. Risk assessment – This involves providing third party the due diligence to various projects. This is not limited to looking up and reviewing the project’s strengths and weaknesses, but providing consulting and advisory services to sponsors in terms of the structure of the transaction as a whole. This oversight protects not only the investors interests, but the investors and sponsors as well. The third party does not come in as an investment banker or lawyer structuring the transaction, but rather as an independent fiduciary that provides guidance while the deal is being structured. The product of the third party oversight is an objective and independent report which chronicles what has done and what will be done as when circumstances arise.
  2. Financial checks and balances – This involves monitoring of the disbursement of funds which are in the following forms:
  3. Escrow – Third party oversight verifies that escrow terms have been met and that the funds have been released from the escrow account to the NCE account (the partnership or the company which the investor is making the loan to).
  4. Partnership invests the money to the project itself – The money is invested as an equity or loan. Simply put, the funds are going out of the partnership and going to company’s hands for the project in order to create jobs.
  5. Continuous project monitoring with reports sent to all investors involved in the project.

Why is USCIS encouraging third party oversight?

  • The USCIS intends to make sure that whoever has the money are the correct people, and that the money is invested for the intent that it was meant for that was outlined in the business plan, and not used for other expenses.


  • For those companies who already have an escrow bank which already verifies that escrow terms are met, there is no need for a third party for that stage in the project. But for EB5 purposes, a third party oversight is still in place to have “another set of eyes” before the release of funds.


  • More importantly, a third party oversight adds a huge amount of credibility and a sense of confidence to any project.

Can a third party oversight prevent fraud?

  • It is never a guarantee that fraud will not happen with the presence of third party oversight. For cases like Jay Peak and Chicago Convention Center, had a third party due diligence been in place to verify transfer of funds, it might have been exceedingly difficult to move funds to 130 accounts without raising any red flags. It might have even been prevented!


  • There are instances when smaller, inexperienced developers are sidetracked whenever they have an excessive amount of money at one point. With no full disclosure in place and no third party oversight, the misuse of funds takes precedence.


  • For third party oversight to be enforced in any project, the involvement of the fiduciary services outlining the scope and responsibilities is incorporated in the deal documentation, escrow loan agreement and offering materials.

How is AISA different from NES?

  • Although AISA may be hired by the partnership as a third party oversight, AISA acts as an independent fiduciary on behalf of all the investors in the partnership.


  • NES only offers escrow and loan disbursement services. They do not provide due diligence nor are they involved in the continuous monitoring of the project. They are the manager and cosigner of escrow as well as loan disbursement.


  • The verification process is also different between AISA and NES. AISA’s disbursement verification involves verifying where the funds end up. This includes site visits to make sure that funds withdrawn are being implemented for the purpose they are meant for. NES verification is based on a letter of verification from the sponsor or developer indicating that the funds have been used appropriately.

Who pays for third party oversight?

  • The ownership lies on the attorney who drafts the project documents must insist on having a third party oversight. The concept is still fairly new but is getting recognized for its crucial importance to be part of the norm.


If you have questions about investment immigration, please reach out to Mona Shah & Associates.