American Logistics International Regional Center

American Logistics
International Regional Center
A Risk Assessment for
EB-5 Stakeholders
Prepared by:
www.AmericanLogisticsWatch.com
American)Logistics)International)Regional)Center)
A"Risk"Assessment"for"EB05"Stakeholders"
EB#5%investors%need%credible%and%comprehensive%information%when%choosing%a%regional%center%as%they%
face%unique%circumstances%and%risks.%A%recent%front#page%Los$Angeles$Times%story%reported%on%a%Chicago%
Regional%Center%under%investigation%by%the%Securities%and%Exchange%Commission%for%massive%fraud%that%
may%result%in%over%two%hundred%investors%losing%their%ability%to%live%in%the%United%%States.1%We%have%
prepared%a%risk%assessment%to%assist%EB#5%participants%in%making%informed%decisions%about%American%
Logistics%International%Regional%Center.%The%report%provides%a%multi#dimensional%view%of%the%company%
and%identifies%several%potential%risks%to%EB#5%investors.%%
We%identify%three%primary%areas%of%concern%to%EB#5%stakeholders%based%on%a%review%of%publicly%available%
records%and%first#hand%accounts%from%employees%at%American%Logistics:%%
1. American+Logistics+may+not+be+meeting+job+creation+targets,+based+on+inconsistencies+
between+the+company’s+publicity,+reports,+and+actual+operations.++
2. The+recent+departure+of+a+key+executive+and+questionable+corporate+spending+by+
management+may+be+cause+for+concern+for+EBE5+investors+and+indicate+an+adverse+
shift+in+the+company’s+growth+strategy.++
3. American+Logistics+is+embroiled+in+an+escalating+labor+dispute+with+its+employees+
that,+if+unresolved,+could+have+a+negative+impact+on+company+operations,+relations,+
and+ultimately+on+EBE5+investors.++
American%Logistics%International,%LLC,%was%founded%in%2006%by%Mr.%Alireza%Mahdavi.%It%received%its%
designation%as%an%EB#5%regional%center%on%February%4,%2009.2%Located%in%Carson,%CA,%American%Logistics%
currently%has%two%active%EB#5%projects:%warehousing/distribution,%and%transportation,%for%which%it%
reported%nine%approved%I#526%petitions%in%20123%and%two%in%2011.4%This%report%examines%the%American%
Logistics%Regional%Center%as%a%whole,%with%a%particular%focus%on%the%transportation%project,%which%
consists%of%trucking%and%delivery%services%in%and%around%the%Ports%of%Los%Angeles%and%Long%Beach.%
Job)Creation)Concerns)
An%analysis%of%publicly%available%documents%and%reports%from%employees%
reveals%inconsistencies%between%American%Logistics’%publicity,%annual%
reports%to%the%U.S.%government,%and%the%on#the#ground%reality.%It%
appears%that%American%Logistics%is%providing%different%facts%to%different%
audiences.%%Most%troubling,%these%discrepancies%suggest%that%American%
Logistics%may%not%be%on%track%to%meet%its%job%creation%targets.%
%
"
American)Logistics)is)
providing)different)
facts)to)different)
audiences.)
Workforce"Contraction"
Last%September,%in%a%presentation%to%local%businesses,%American%Logistics%claimed%a%goal%of%employing%
about%4,000%workers%within%2#3%years.5%To%reach%such%an%ambitious%goal,%the%company%would%have%to%
hire%25%employees%every%week%for%three%years.%At%that%rate,%the%company%would%have%hired%over%500%
new%employees%by%now.%To%meet%such%projections,%the%company%should%at%the%very%least%be%maintaining%
current%job%levels.%
However,%rather%than%seeing%growth,%truck%drivers%employed%by%
American%Logistics%have%reported%a%slowdown%in%business%activity%and%a%
cutback%in%the%workforce.%Over%the%past%few%months,%drivers%report%
that%American%Logistics%has%drastically%reduced%its%use%of%temporary%
drivers%working%through%staffing%agencies%(“agency%drivers”).%In%late%
2012,%over%20%agency%drivers%were%receiving%steady%work%at%American%
Logistics.%Now,%just%three%are%being%called%in%regularly%by%the%company%
to%work,%a%drop%of%more%than%80%percent.%Furthermore,%the%number%of%drivers%directly%employed%by%the%
company%had%stagnated%at%around%60%since%February,%dropping%
to%about%55%in%May.%
Truck)drivers)employed)
by)American)Logistics)
have)reported)a)
slowdown)in)business)
activity)and)a)cutback)in)
the)workforce.)
Business"slow0down"
This%trend%seems%to%be%confirmed%by%the%company’s%own%
internal%communications.%A%March%18,%2013,%memo%
distributed%by%company%management%to%employees%stated%
that%“business%volume%is%down”%and%“We,%like%many%other%
transportation%companies%working%at%the%Port,%are%doing%
everything%that%we%can%to%survive…”%%
Truck)Drivers)Working)for)
American)Logistics)
85%
80%
Number+of+Drivers+
In%all,%reports%from%workers%about%job%levels%at%American%
Logistics%indicate%that%there%has%been%about%a%25%percent%decline%
since%the%end%of%2012%in%the%number%of%truck%drivers%regularly%
working%for%the%company.$This%unexceptional%performance%
suggests%that%the%company’s%stated%goal%of%hiring%almost%4,000%
workers%within%the%next%three%years%may%not%be%credible.%%
75%
70%
65%
60%
55%
50%
Nov.%Dec.%Jan.%Feb.%Mar.%Apr.%May%
2012E2013+
Source:%Estimates%based%on%driver%
reports,%March%and%May%2013.%
These%recent%workforce%cutbacks%and%slowed%business%at%
American%Logistics%come%at%a%particularly%sensitive%time.%None%
of%the%company’s%EB#5%investors%have%yet%received%an%I#829%approval,%according%to%its%latest%annual%
filings.6%Their%investments%–%and%their%green%cards%–%depend%on%stable%job%creation.%%
%
"
None)of)the)company’s)EB@5)investors)have)
yet)received)an)I@829)approval.)
2+ American+Logistics+Regional+Center+EBE5+Risk+Assessment+Report+
%
Scaled0back"plans"for"growth"
A%comparison%of%claims%in%American%Logistics’%promotional%materials%to%
The)company)reported)
annual%figures%reported%to%USCIS%in%its%most%recent%I#924A%forms%
zero)port)terminal)jobs)
suggests%that%it%may%have%scaled%back%its%growth%plans.%As%mentioned%
to)USCIS)in)its)Form))
above,%the%company%has%two%active%EB#5%projects.%Yet%initially,%the%
company%planned%a%third%project%in%terminal%operations.%American%
I@924A)for)2011.)
Logistics%stated%in%a%company%presentation%that%it%planned%to%begin%
generating%revenue%from%port%terminal%operations%in%2012.7%However,%the%company%reported%zero%port%
terminal%jobs%to%USCIS%in%its%Form%I#924A%for%2011.8%%By%the%following%year,%rather%than%report%growth%as%
projected,%American%Logistics%had%omitted%port%terminal%operations%completely%from%its%2012%Form%I#
924A.%
Additionally,%a%review%of%California%incorporation%records%indicates%that%American%Logistics%has%not%yet%
created%a%limited%partnership%to%serve%as%an%investment%vehicle%for%a%terminal%operations%business,.%
Absent%a%terminal%operations%business,%American%Logistics%may%have%difficulty%meeting%future%job%growth%
and%revenue%projections.%
Questionable)Management)Decisions)
Recent%management%developments%may%signal%shifts%in%business%strategy%and%spending%priorities.%If%
these%decisions%pose%a%risk%to%job%creation%or%maintenance,%EB#5%investors%could%be%impacted.%%
Leadership"vacuum"
Employees%at%American%Logistics%report%that%Mr.%Alireza%Mahdavi,%the%company%owner,%is%rarely%(if%ever)%
present%at%the%company’s%main%facility.%Meanwhile,%it%has%come%to%our%attention%that%the%Director%of%
Mergers%and%Acquisitions,%who%served%as%the%public%face%of%American%Logistics%in%local%outreach%to%
businesses%and%elected%officials,%has%recently%departed%the%company.%The%reasons%behind%his%departure%
are%unclear.%Whatever%the%circumstances,%this%sudden%change%in%management%–%particularly%such%a%
strategic%position%for%company%growth%–%is%troubling%for%potential%
EB@5)investors)should)be)
investors%that%depend%on%growth%to%meet%future%EB#5%job%
creation%goals.%Interested%EB#5%investors%should%be%concerned%
concerned)whether)the)loss)a)
whether%the%loss%of%the%executive%in%charge%of%mergers%and%
key)executive)in)charge)of)
acquisitions%signals%a%change%in%American%Logistics’%growth%
mergers)and)acquisitions)
strategy.%It%remains%to%be%seen%whether%the%company%will%
signals)a)change)in)American)
continue%to%try%to%acquire%other%companies,%or%if%it%plans%to%create%
Logistics’)growth)strategy.
any%future%jobs%through%organic%growth.%
)
Misguided"spending"
Additionally,%on#the#ground%reports%from%employees%indicate%misguided%spending%on%the%part%of%
management.%The%company%appears%to%have%retained%the%services%of%a%“labor%relations%consultant”%for%at%
least%the%past%two%months.%Drivers%report%the%presence%of%the%consultant%at%American%Logistics’%Carson%
facility%since%at%least%Wednesday,%March%13,%2013.%Such%consultants,%generally%brought%on%by%company%
management%to%oppose%employees’%efforts%to%improve%working%conditions,%are%often%extremely%
expensive.%A%2006%article%on%the%U.S.%labor%consulting%industry%by%Prof.%John%Logan%revealed%that%
consultants%at%one%leading%firm%are%paid%$180#250%per%hour%plus%
expenses.9%He%also%notes%that%even%small%campaigns%to%oppose%
organizing%efforts%can%cost%tens%of%thousands%of%dollars,%while%large%
These%spending%priorities%should%concern%EB#5%stakeholders,%especially%
if%company%resources%that%could%be%used%to%create%and%maintain%jobs%
are%instead%being%used%to%hire%costly%labor%consultants.%In%addition,%in%
our%experience,%labor%consultants%also%often%prolong%labor%disputes.%
As%described%below,%a%lengthy%labor%dispute%could%be%harmful%to%American%Logistics,%which%may%pose%
serious%risks%for%EB#5%investors.%
Labor)consultants)–)
known)as)“union)busters”)
–)cost)millions)of)dollars)
and)are)known)to)prolong)
labor)disputes.)
Negative)Impacts)of)Labor)Unrest))
An%ongoing%labor%dispute%between%workers%and%management%at%American%Logistics%is%an%additional%area%
of%potential%risk%for%EB#5%stakeholders.%Such%disputes,%if%unresolved,%can%be%detrimental%for%a%company%
and%its%investors.%Unresolved%disputes%between%management%and%workers%can%lead%to%low%morale,%poor%
service,%and%potentially%disruptive%unrest.%If%disputes%persist,%they%can%affect%all%aspects%of%a%company,%
leading%to%degradations%in%operations,%financial%stability,%and%customer%relations.%
Outlined%below%are%key%developments%in%the%worsening%relationship%between%management%and%
employees:%
♦ January+30:%Dozens%of%truck%drivers%employed%at%American%Logistics%approached%
company%management%with%a%request%to%address%long#standing%grievances%and%
respect%their%desire%to%have%a%voice%on%the%job%by%forming%a%union.%Employees%have%
since%reported%retaliation%and%harassment%from%management.%
♦ February+27:%Workers%filed%an%unfair%labor%practice%charge%with%the%National%Labor%
Relations%Board,%alleging%that%American%Logistics%violated%federal%labor%law.%The%
charge%is%currently%being%investigated%by%the%federal%government.%
♦ March+1:%Dozens%of%employees,%now%joined%by%clergy%and%community%supporters,%
returned%to%petition%company%executives%to%respect%their%right%to%form%a%union%and%
refrain%from%unlawful%behavior.%
♦ April+1:%An%American%Logistics%driver%filed%a%second%unfair%labor%practice%charge%with%
the%National%Labor%Relations%Board,%alleging%that%the%company%engaged%in%unlawful%
retaliation.%%
♦ May+6:%A%large%group%of%drivers%presented%company%management%with%a%petition%
urging%them%to%address%serious%safety%concerns%that%they%believe%endanger%not%only%
themselves%as%drivers%but%also%the%general%public.%
♦ May+10:%Drivers%filed%yet%another%unfair%labor%practice%charge%with%the%National%Labor%
Relations%Board.%This%is%the%third%federal%investigation%that%the%company%is%now%
undergoing.%
As%of%the%publication%of%this%report,%the%company%has%not%responded%to%the%drivers’%petitions%or%
entreaties%to%communicate,%and%drivers%are%reportedly%growing%increasingly%frustrated.%One%driver%
stated,%“What%do%we%have%to%do%to%have%our%voices%heard?%Go%on%strike?”%%
4+ American+Logistics+Regional+Center+EBE5+Risk+Assessment+Report+
%
Deteriorating"relationships"with"government"officials"
The%labor%dispute%has%also%brought%American%Logistics%under%the%close%scrutiny%of%federal%and%local%
government%officials.%In%recent%weeks,%officials%representing%the%U.S.%congressional,%state%assembly,%and%
city%council%districts%where%American%Logistics%is%located%have%sent%letters%to%the%owner,%Mr.%Alireza%
Mahdavi,%expressing%their%concerns%about%the%deteriorating%situation%between%management%and%
workers%at%the%company.%%%
The%central%issues%raised%by%these%officials%are%matters%of%common%
concern%to%EB#5%investors,%as%they%point%out%the%detrimental%effect%
that%unresolved%labor%disputes%can%have%on%a%company%and%its%
stakeholders.%In%a%letter%dated%April%17,%2013,%U.S.%Representative%
Janice%Hahn%urged%American%Logistics%to%comply%with%U.S.%law%and%
respect%its%workers’%rights.10%%
U.S.%Representative%Hahn%represents%the%44th%Congressional%District,%
which%covers%the%communities%surrounding%the%Los%Angeles%and%Long%
Beach%ports,%including%Carson,%CA,%where%American%Logistics%
International%is%located.%Through%her%role%as%co#chair%of%the%
Congressional%Port%Caucus%and%a%member%of%the%Transportation%and%
Infrastructure%Committee,%she%is%responsible%for%oversight%of%key%
sectors%in%which%American%Logistics’%business%is%focused.%%
In)a)letter)dated)April)17,)
2013,)U.S.)Representative)
Janice)Hahn)urged)
American)Logistics)to)
comply)with)U.S.)law)and)
respect)its)workers’)rights.)
%
In%her%letter,%she%states,%“I%hope%that%your%company%will%do%everything%possible%to%remain%neutral%and%
help%avoid%the%types%of%labor%disputes%that%traditionally%result%from%management’s%interference%with%
workers’%rights.”%Further,%Congresswoman%Hahn%underscored%the%negative%impact%that%a%protracted%
labor%dispute%can%have%on%a%company,%saying,%“Such%disputes%have%proven%to%impair%the%health%of%the%
company,%the%workers,%and%the%regional%economy.”%%
A%growing%list%of%public%officials%and%community%organizations%have%conveyed%similar%concerns%in%letters%
to%American%Logistics,%including:%Carson%City%Councilman%Mike%Gipson,%Long%Beach%City%Councilman%
Steve%Neal,%California%Assemblywoman%Bonnie%Lowenthal,%San%Pedro%Democratic%Club,%and%Clergy%and%
Laity%United.%%%
There)may)be)a)weakening)
relationship)between)
American)Logistics)and)
government)representatives.)
%
)
These%recent%admonitions%from%elected%officials%may%indicate%a%%
weakening%relationship%between%American%Logistics%and%
government%representatives.%This%is%another%area%of%concern,%as%
local%and%regional%government%support%for%a%regional%center%is%a%
key%factor%that%EB#5%stakeholders%need%to%consider%when%
evaluating%potential%investments.%%
Summary)
Investors%in%the%EB#5%program%rely%on%businesses%to%meet%their%job%
creation%targets.%Falling%short%of%performance%projections%can%have%
serious%consequences%as%it%puts%investors’%immigration%status%at%risk.%
The%foregoing%analysis%of%the%American%Logistics%Regional%Center%
raises%several%indications%that%the%company’s%management%may%not%
be%on%target%to%meet%the%job%creation%goals%it%has%set%for%itself.%%%
American)Logistics)
management)may)not)be)
on)target)to)meet)the)job)
creation)goals)it)has)
set)for)itself.)
The%company’s%publicity%appears%inconsistent%with%on#the#ground%reports%and%government%filings.%%
♦ Its%seemingly%lackluster%performance%in%job%creation%is%a%far%cry%from%the%company’s%
own%projections%and%should%be%of%particular%interest%to%EB#5%investors.%%
♦ Given%recent%executive%turnover,%it%is%unclear%what%the%company’s%strategy%is%for%
future%job%creation.%%
♦ The%dispute%between%management%and%employees,%if%prolonged,%could%lead%to%
company%instability,%jeopardizing%investors’%two%primary%goals:%%
1)%% Satisfaction%of%visa%conditions;%and%%
2)%% Return%of%their%invested%capital.%%
This%risk%is%underscored%by%the%intervention%of%federal%and%local%government%officials%to%
implore%the%company%to%avoid%a%drawn#out%dispute.%
If%American%Logistics%chooses%a%path%of%partnership,%then%new%possibilities%for%growth%may%emerge.%
Companies%working%in%high#road%collaboration%with%their%employees%and%unions%are%often%able%to%garner%
support%from%public%officials%and%attract%resources%that%can%help%build%successful,%stable%businesses.%%
Beyond%routine%due%diligence,%investors%and%other%stakeholders%considering%the%American%Logistics%
Regional%Center%should%seek%answers%to%the%following%questions%to%best%assess%potential%risks%to%their%
investments%and%their%immigration%status:%
♦ What%impact%will%the%recent%business%slow#down%and%apparent%reduction%of%the%truck%
driver%workforce%at%American%Logistics%have%on%investors%when%they%file%their%I#829%
petitions?%
♦ Is%American%Logistics%providing%different%information%to%investors%and%to%the%
government?%%
♦ Is%company%management%communicating%to%EB#5%investors%the%same%message%
regarding%low%business%volume%that%it%shared%with%its%employees?%
♦ What%impact%would%a%prolonged%labor%dispute%have%on%American%Logistics’%ability%to%
create%or%maintain%a%sufficient%number%of%jobs%to%satisfy%requirements%for%EB#5%
investors?%
♦ Will%weakened%relationships%between%American%Logistics%and%local%and%federal%
government%officials%affect%its%ability%to%grow%and%meet%future%job%creation%goals?%%
6+ American+Logistics+Regional+Center+EBE5+Risk+Assessment+Report+
%
About)the)Author)
This%report%was%prepared%by%the%International%Brotherhood%of%the%Teamsters,%
the%United%States’%largest%union%of%transportation%workers%with%more%than%1.4%
million%members.%The%union%was%recently%approached%by%drivers%who%move%
merchandise%for%American%Logistics%International%and%is%actively%assisting%these%
drivers%to%seek%union%representation.%%%
The%Teamsters%union%recently%launched%a%website,%AmericanLogisticsWatch.com,%
to%keep%EB#5%stakeholders%informed%about%ongoing%analysis%and%future%
developments.%%
%
To)Learn)more,)log)on)to)www.AmericanLogisticsWatch.com.)
)
%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
1
%Lee,%Don%and%Shyong,%Frank.%“Scams%Blocking%Chinese%investors’%path%to%US%green%cards.”%Los$Angeles$Times.$04/23/13.%
Retrieved%05/19/13%from%http://articles.latimes.com/2013/apr/23/business/la#fi#chinese#visas#20130423$
2
%Designation%letter%from%US%Citizenship%and%Immigration%Services%to%Alireza%Mahdavi%of%American%Logistics%International,%
02/04/09.%
3
%Form%I#924A,%filed%by%American%Logistics%International%Regional%Center,%received%by%US%Citizenship%and%Immigration%Services%
on%12/19/12.%
4
%Form%I#924A,%filed%by%American%Logistics%International%Regional%Center,%received%by%US%Citizenship%and%Immigration%Services%on%
12/28/11.%
5
%Videomakers%World%(2012,%September%27).%Kourosh$Hangafarin$from$American$Logistics$International$Speaks$to$Carson$
Chamber$of$Commerce.$Retrieved%5/19/13%from%http://www.youtube.com/watch?v=qlpmk_7ThJU%
6
%Form%I#924A,%12/19/12%and%12/28/11.%
7
%“Worldwide,%Worldwise.”%[PDF%document].%Retrieved%5/19/13%from%
http://eb5info.com/system/attachments/29/original/American_Logistics_International_Presentation.pdf?1284075097%
8
%Form%I#924A,%12/28/11.%
9
%Logan,%John.%(2006).%The%Union%Avoidance%Industry%in%the%United%States.%British$Journal$of$Industrial$Relations,%44:%4%pp.%651#
675.$
%Hahn,%Janice.%Letter,%April%13,%2013.%%http://americanlogisticswatch.com/files/2013/05/Hahn#letter#to#ALI#413.pdf%
10
%