CSONKA

Interim Decision #2760




                               MATTER OF CSONKA
                           In Section 248 Proceedings
                                    A-22855988
            Decided by Regional Commissioner April 18, 1978

(1) Applicant sought a change of nonimmigrant classification under section 248 of the
  Immigration and Nationality Act, 8 U.S.C. 1258, from that of visitor for pleasure to
  that of treaty investor under section 101(a)(15)(E)(ii) of the Act, 8 U.S.C.
  1101(a)(15)(E)(ii). In order to so qualify, applicant must show he has invested or is
  investing capital in a bona fide enterprise and is not seeking to come to the United
  States to invest a small amount of capital in a marginal enterprise. Applicant's
  investment consisted of 00,000 consisting of notes on which another individual was
  guarantor. There is no showing that he invested any of his own money, and the
  business was shown to be a losing venture.
(2) Where there is no evidence that the applicant has invested his own funds in an
  enterprise, loans guaranteed by a party other than the applicant cannot be considered
  as an investment by the applicant, notwithstanding that the 51 per cent share of the
  business owned by the applicant was pledged to the guarantor as security for the
  loans.
Orr BEHALF OF APPLICANT: William T. Johnson, Esquire
                         Myers and Johnson
                         842 Petroleum Building
                         Beaumont, Texas 77701


   The application was denied by the District Director, Houston, Texas,
and is now considered on appeal.
   The applicant is a 25-year-old single male, a native and citizen of
England. He was admitted as a visitor for pleasure on July 18, 1977,
with an authorized period of stay to August 19, 1977.
   The application was denied by the District Director because it was
decided that the applicant had failed to establish that he had invested
or was actively in the process of investing a substantial amount of
capital in a business enterprise in the United States.
   At present, Service regulations do not address the question of who
may qualify for treaty investor status. However, Operations Instruction 214.2(e) requires that the notes to 22 C.F.R. 41.40 and 41.41 in
Volume 9, Visas, Foreign Affairs Manual, must be consulted when
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considering matters involving treaty traders and treaty investors.
  22 C.F.R. 41.41 relates specifically to treaty investors and provides
that an alien shall be classifiable as a nonimmigrant treaty investor if
he establishes to the satisfaction of the Consular Officer that he
qualifies under the provisions of section 101(a)(15)(E)(ii) of the Act,
that he intends to depart from the United States upon termination of
his status, and that he is an alien who has invested or is investing
capital in a bona fide enterprise and is not seeking to proceed to the
United States in connection with the investment of a small amount of
capital in a marginal enterprise solely for the purpose of earning a
living.
    On appeal the applicant, through counsel, presents an unaudited
 balance sheet indicating that the total assets of the business on
 December 31, 1977, was $26,651-46, with a net loss of $3,546.94 for the 4
month period ending December 31, 1977. The audit reveals notes payable consist of a $20,000 loan from the American Bank of Beaumont,
Texas, payable on January 5, 1978, with interest at 8.75%. The note has
 been subsequently renewed and is currently due on April 5, 1978, with
 interest at 8.75%. Both loans were guaranteed by a relative of the
 corporation's shareholders and officers. The guarantor is identified as
 Charles H. Moore, M.D., Houston, Texas. The stockholders are identified as Ms. Vivion P. Moore with 500 shares of common stock at $1.00
par value, and the applicant with an identical shareholding. For some
reason it was decided that the applicant should own 51% of the
common stock, whereupon a special meeting was held on February 23,
1978, and he was issued an additional 25 shares at $1.00 par value.
    In counsel's brief it is stated that subsequent to December 31, 1977,
the Csonka Moore Company (the enterprise under consideration) has
           -


obtained additional funds to the extent that it is now responsible for
notes payable in the amount of $30,000. The additional $10,000 is in the
form of a single payment note due on February 24, 1978, with a $221.91
finance charge, the borrower being Charles H. Moore, M.D., Houston,
Texas.
   It is noted that the loan guarantor, Dr. Charles H. Moore, is the
brother of Kilburn Moore, the zeal estate developer presently involved
in developing Westheimer Oaks Village where the enterprise is located, and the one other stockholder is the wife of Kilburn Moore.
  Despite expectations and hopes of the participants for the future, so
far the business has been a losing venture and may realistically be
classified as a marginal enterprise.
  Supporting documentation contains an agreement by Dr. Charles H.
Moore, guarantor, and the applicant to the effect that the applicant is
personally responsible to the guarantor for the repayment of notes to
American National Bank from his share of earnings or dividends

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realized from the operation of "Byron's," the business enterprise. The
applicant then assigns to the guarantor as security for the payment of
such notes, his stock shares of 51% in the Csonka-Moore Company.
While these machinations are interesting, they in no way establish
how the applicant has invested or is investing capital in a bona fide
enterprise. The capital has been invested by Dr. Charles H. Moore, not
the applicant. There is no evidence to suggest that the applicant has
brought funds from England or any other place and invested them in
this country. He has never had unrestricted use of the monies made
available by the note guarantor.
  The entire record has been carefully reviewed with consideration
given the information provided on appeal. It has been decided, for the
reasons stated above, that the application was properly and correctly
denied, and that the decision will be affirmed.
  ORDER: The decision of the District Director is affirmed, and the
appeal is dismissed.




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