Interim Decision # 3017 

MATTER OF SILVER DRAGON CHINESE RESTAURANT 

In Visa Petition Proceedings 

A-24551321 

.Decided by Commissioner August 13, 1986 

(1) An occupational preference petition may be filed on behalf of a prospective employee who is a shareholder in the corporation. The prospective employee's interest in the corporation, however, is a material fact to be considered in determining 

whether the job being offered was really open to all qualified applicants. 

(2) A shareholdoec concoalinent, in labor certification proceedings, of his or her interest in the petitioning corporation constitutes willful misrepresentation of a material fact and is a ground for invalidation of an approved labor certification 

under 20 C.F.E. § 656.30(d) (1986). 

ON BEHALF 01' PETITIONER.: Harry A. DeMell, ENuire 

277 Broadway 

New York, New York 1000'7 

L PROCEDURAL HISTORY AND JURISDICTION 

The petition was denied by the district director, Newark. The petitioner appealed that decision, whereupon, in consideration of new 

evidence submitted on appeal, we formulated. a new ground of 

denial and dismissed the appeaL The petitioner, citing various authorities, now advances the proposition that oil r action was incorrect and exceeded the scope of our authority. We will grant the petitioner's motion pursuant to 8 C.F.R. § 103.5 (1986) in order to 

permit examination of its new arguments and citations. 

IL FACTS 

The petitioner is a Chinese restaurant which proposes to offer 

the beneficiary permanent employment as a cook of Chinese-style 

food. Labor certification for the position at issue was applied for by 

the petitioning employer on February 23, 1981, and was granted on 

June 12, 1981. The petitioning employer is a New Jersey corporation. In its application for labor certification the petitioner certified 

that the pubition at issue was open to any qualified United States 

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worker. The beneficiary was identified as a chef who would be supervised by the president of the petitioner, an individual identified 

as Julio Malqui. Julio Malqui signed the application for labor certification in his capacity as the petitioner's president. The district director denied the petition upon determining that the petitioner had 

not satisfactorily demonstrated its ability to compensate the beneficiary as stipulated in the labor certification application. On appeal 

the petitioner submitted a copy of the petitioner's 1983 corporate 

income tax return in order to rebut the district director's determination. Our review of this document revealed the beneficiary to be 

listed as the owner of 50 percent of the petitioner's issued shares. 

The tax return was signed by the beneficiary as the petitioner's 

president, and not by Malqui. Unsigned photocopies of the petitioner's 1981 and 1982 corporate income tax returns are also of record. 

The 1981 return, which covers the period during which application 

for labor certification signed by Malqui was made and approved, 

lists the beneficiary as the sole officer of the petitioning corporation. The 1982 return lists the beneficiary and Julio Malqui as 

owners of 50 percent of the petitioner's issued shares each but 

shows the beneficiary to have been the sole party at interest to 

derive compensation (in the amount of $10,400) from the petitioner, 

with Malqui having gone uncompensated. An identical situation, 

including the amount of compensation to the beneficiary, is reflected in the 1983 return. The 1982 return shows the beneficiary to 

have devoted 100 percent of his work time to the petitioner, and 

Malqui none. No information is provided concerning work time in 

the 1983 return. 

In light of the fact that the beneficiary is a principal of the petitioning corporation as well as its president, it is evident that information contained in the labor certification is incorrect in two regards. First, the beneficiary is not, in fact, supervised by Mr. 

Malqui, who signed the petition as president. Second, the job was 

not actually open to qualified United States citizen or resident 

workers. We conclude that misrepresentation, both willful and material, occurred. This conclusion is supported by a Department of 

Labor advisory opinion, dated May 10, 1984: 

It is the position of the Department of Labor that while it is not an absolute 

ground for denial of an application for certification, the alien's ownership of his/ 

her potential corporate employer should cause the certifying officer to examine 

more carefully whether the job opportunity is clearly open to qualified U.S. workers, and whether U.S. workers applying for the job were rejected solely for lawful 

job-related reasons. 

The alien's ownership of his/her non-corporate employer; e.g., partnership, would 

be one ground for denial of a labor certification, since it would not constitute 

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work for an employer other than oneself, as required by the regulations. 20 CFR 

656.50, "Employment?' 

In light of the materiality and apparent willfulness of the petitioner's misrepresentations, we invalidated the labor certification 

at issue pursuant to the provisions of 20 C.F.R. § 656.30(d) (1986) 

and dismissed the appeal. While the district director was correct in 

considering the petitioner's financial conditions, we said that he 

should have invalidated the labor certification. The petitioner's 

misrepresentation of its true relationship with the beneficiary is a 

far more fundamental impediment to accordance of the benefit 

sought than is the Government's adverse opinion of the petitioner's 

substantiality or viability. 

La. THE PETITIONER'S MOTION 

The petitioner, on motion, argues two issues. First, relying on 

Matter of Aphrodite Investments Limited, 17 I&N Dec. 530 (Comm. 

1980), counsel argues that the beneficiary's stock ownership does 

not preclude eligibility for the benefit sought. Second, counsel 

argues that the labor certification can be invalidated only upon 

finding fraud or willful misrepresentation and that the Department 

of Labor's conclusion that a good faith recruitment effort was made 

precludes such a finding. 

IV. THE EFFECT OF THE PETITIONER'S ORGANIZATION AS 

A CORPORATION 

The Department of Labor advisory opinion quoted above has 

since been buttressed by like holdings in arlministrative and judicial proceedings. See, e.g., Pasadena Typewriter and Adding Machine Co. v. Department of Labor, No. 83-5516 AAH (T) (C.D. Cal. 

Feb. 17, 1984); Help Trucking Co. ex rel. Rodriguez, 6 ILCR 1-453 

(1984); H.D.S. International Corp. ex rel. Hamidzadah, 3 ILCR 1-

1044 (1982)_ 

The petitioner's first point is substantially correct as quoted. The 

fact that an alien is a stockholder in the corporation seeking to 

employ him or her in the United States does not constitute an 

automatic disqualification. Cohen-Verdi, Inc., 5 ILCR 1-406 (1982); 

Matter of Aphrodite Investments Limited, supra; Matter of M-, 8 

I&N Dec. 24 (BIA, A.G. 1958). However, the fact that a corporation 

is an entity distinct from its stockholders does not, as noted in 

Pasadena Typewriter and Adding Machine Co. v. Department of 

Labor, supra, inevitably or automatically establish a corporation's 

independence of particular stockholders. As is evident from the adA AO 
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ministrative case law cited above, the Department of Labor has in 

the past denied labor certification in instances where it determined 

that the prospective alien employee controlled the prospective corporate employer to the extent that the job offer at issue could not 

properly be regarded as open to all qualified applicants. 

A prospective immigrant's control of the petitioning corporation 

does not act to disqualify him or her in any automatic fashion if it 

can be established that the position at issue was offered in good 

faith and open to all qualified applicants. Where, as in this instance, an alien beneficiary's association with the petitioning corporation is concealed in labor certification proceedings, the Department of Labor is prevented from discharging its function of 

"examin[ingj more carefully whether the job opportunity is clearly 

open to qualified U.S. workers, and whether U.S. workers applying 

for the job were rejected solely for lawful job-related reasons." Department of Labor advisory opinion, supra. 

V. THE EFFECT OF THE PETITIONER'S WILLFUL 

MISREPRESENTATION 

The labor certification application at issue is signed by an individual other than the beneficiary, despite the fact that the petitioner's corporation income tax return shows the beneficiary to have 

been the sole officer of the corporation during the period when the 

application was submitted. The beneficiary is petitioned for in the 

capacity of "cook, Chinese-type food" when in fact he is an officer 

of the petitioning corporation. The beneficiary is represented to be 

subject to the supervision of the president of the petitioning corporation when he actually is the president of the petitioning corporation. These are obvious misrepresentations that relate to matters of 

fact, material to the labor certification proceeding in which they 

were made. They are determined to be willful because the officers 

and principals of a corporation are presumed to be aware and informed of the organization and staff of their enterprise. Under the 

clear language of applicable regulations the labor certification 

before us is subject to invalidation. The petitioner's characterization of the grounds for invalidation of the labor certification as 

"mere suspicion" of fraud is belied by the facts. 

In this case, the misrepresentation which occurred consists of an 

obvious mischaracterization of the beneficiary's relationship to the 

petitioner, which had the effect of the issuance of a labor certification that would not otherwise have been granted (see the Department of Labor advisory opinion below). The misrepresentation 

which occurred cannot be dismissed by the petitioner or prudently 

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regarded by us as an innocent, non-willful omission of material 

facts which would not subject the labor certification before us to 

invalidation. Rather, the petitioner's statement that the beneficiary 

would be supervised by its corporate president, when the beneficiary, at the time the statement was made, was in fact the president 

of the petitioning corporation can only be held to be a misrepresentation calculated to secure a benefit for which the petitioner was 

not eligible, and thus a misrepresentation which properly subjects 

the labor certification to invalidation under 20 C.F.R. § 656.30(d) 

(1986). 

The Department of Labor concurs in this determination. In an 

advisory opinion concerning this case, dated November 18, 1985, 

the Chief of the Division of Foreign Labor Certification states as 

follows: 

Based on the above facts there appears to have been a misrepresentation of a material fact involving a labor certification. The signing of Part A of the labor certification by Julio Mahri as the president and supervisor of the alien when in fact 

he was not employed by the petitioning corporate employer caused the Certifying 

Officer not to inquire as to the extent of the control the alien exercised over the 

petitioning corporate employer. This information would have been necessary for 

the Certifying Officer to determine whether the job opportunity was clearly open 

to qualified U.S. workers. 

As a result of the case Pasadena Typewriter and Adding Machine Company, Inc. 

and Alireza liahmaty v. United States Department of Labor (CV 83-5516-AAIRT), 

a statement of the Department's position regarding those cases where the alien 

beneficiary is a principal stockholder of the petitioning corporate employer filing 

an Application for Alien Labor Certification on his behalf was recently provided 

to the American Immigration Lawyers Association Committee on Labor Liaison. 

This was somewhat a fuller statement than was contained in my February 26, 

1985, letter to you, and is reproduced below for your information. 

The Department's policy with regard to those situations where the beneficiary of 

the labor certification is a principal stockholder in the petitioning corporate employer, has been that while it is not an absolute ground for denial of an application for certification, the alien's ownership of his potential corporate employer 

should cause the certifying officer to examine more carefully whether the job opportunity is clearly open to qualified U.S. workers (20 utit 656.20(o)(8)), and 

whether U.S_ workers applying for the job were rejected solely for lawful job•related reasons (20 CFR 656.21(bX7)). The case Pasadena Typewriter is in accord with 

the Department's policy. As stated by the court on page '7 of its decision: 

"The regulations require a 'job opportunity' to be 'clearly open'. Requiring the 

job opportunity to be bona fide adds no substance to the regulations, but simply 

clarifies that the job must truly exist and not merely exist on paper. The administrative interpretation thus advances the purpuce of regulation 656.20(cX8). Like -

wise requiring that the job opportunity be bona fide clarifies that a true opening 

must exist, and not merely the functional equivalent of self-employment. Thus, 

the administrative construction advances the purpose of regulations 656.20." 
Interim Decision #3017 

VI. THE DIVISION OF AUTHORITY 

Although the decision to grant or withhold labor certification is 

reserved to the Secretary of Labor and his designees, the authority 

to invalidate labor certifications is vested by Department of Labor 

regulation solely in the Department of State and this Service. Further, the case law relating to the division of authority between the 

Department of Labor and this Service has advanced considerably 

beyond its condition at the time when the citations utilized by the 

petitioner were rendered. For example, examination of a beneficiary's qualifications, though not beyond the scope of authority of 

the Department of Labor, is normal and properly conducted by this 

Service. Madany v. Smith, 696 1%2d 1008 (D.C. Cir. 1983); Stewart 

Infra-Red Commissary of Massachusetts, Inc. v. Coomey, 661 F.2d 1 

(1st Cir. 1981). For current construction of related issues see, e.g., 

K.R.K. Irvine, Inc. v. Landon, 699 F.2d 1006 (9th Cir. 1983); Joseph 

v. Landon, 679 F.2d 113 (7th Cir. 1982); Ubeda v. Palmer, 539 F. 

Stipp. 647 (N.D. M. 1982). 

VII. CONCLUSION 

Based on the facts and the weight of authority, and after consultation with the Department of Labor as to this matter, we will reaffirm our previous order. 

ORDER: Our order of June 18, 1984, is hereby affirmed. The 

petition remains denied. 

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