In March 2023, the Government Accountability Office (GAO) published a report on the EB-5 Immigrant Investor Program/ It reviewed the monitoring of fraud and national security risks in the program by United States Citizenship and Immigration Services (USCIS). GAO conducted a study to evaluate USCIS procedures and offered some recommendations to the agency to help improve its assessment process of the EB-5 program and address such risks more effectively.
The EB-5 investment visa category was created by Congress in 1990 to stimulate the U.S. economy through job creation and capital investment by foreign nationals in commercial enterprises, enabling them and their eligible family members to apply for U.S. citizenship. Every year, approximately 10,000 EB-5 visas are made available to qualified immigrant investors and their families under this program.
EB-5 Program Monitoring by USCIS
Issues Reviewed by GAO in the March 2023 Report
Findings of the Report and GAO Recommendations
EB-5 Program Monitoring by USCIS
Within USCIS, the Immigrant Investor Program Office (IPO) administers the EB-5 program, and USCIS’s Fraud Detection and National Security (FDNS) Directorate looks after fraud and national security concerns in the program. Even though there are fraud detection protocols within the EB-5 adjudication process, the program is prone to unique fraud risks that are generally not present in other visa programs. The EB-5 program may be misused by petitioners deliberately misrepresenting facts to obtain a visa for which they would otherwise be ineligible or by companies that use false and misleading information to dupe unsuspecting immigrant investors through fraudulent investment scams.
The latest 2023 report succeeds two previous reports by GAO, issued in 2015 and 2016 respectively, related to fraud and national security issues within the EB-5 program. The report acknowledges that although USCIS took several initiatives to incorporate the recommendations made in those reports, the program continues to be subject to exploitation. The volume of fraud cases in the EB-5 program, however, was indicated to be less than 1% in the 2021 fiscal year.
Issues Reviewed by GAO in the March 2023 Report
Among other things, the report addresses the following issues:
- (1) Characteristics of investors and investments in the EB-5 program.
- (2) The nature and extent of data collected by USCIS to monitor fraud and national security concerns.
- (3) Efforts by USCIS to assess and address these concerns since 2016.
In the study, GAO analyzed data on EB-5 petitions and visa applications from fiscal years 2016 through 2021; reviewed IPO and FDNS operating procedures and fraud and national security assessments; and interviewed various agency officials and USCIS staff responsible for adjudicating and investigating EB-5 petitions.
Findings of the Report and GAO Recommendations
As per the report, USCIS was found to have undertaken several steps to address EB-5 program fraud risks since the last audit in 2016. These efforts include establishing a compliance division to conduct compliance reviews of regional centers, reviewing transactions, conducting site visits, sponsoring training initiatives, and developing extra checks for high-risk countries and entities.
Additionally, from 2017 through 2021, the agency conducted at least one fraud or national security assessment on an aspect of the EB-5 program each year.
Based on the audit, GAO observed that although USCIS collects data on EB-5 fraud cases it investigates, there is a lack of readily available data about the nature of fraud incidents such as fraudulent investment schemes. GAO recommended that there is scope for improvement in the systematic collection and tracking of such information that would help USCIS better monitor and address potential fraud risks.
The report noted that the EB-5 Reform and Integrity Act of 2022 has made substantive amendments to the program to safeguard it against exploitation. The new law has granted IPO authority to deny applications and petitions and to terminate regional centers on the basis of fraud and national security concerns. Considering this, GAO recommended that IPO develop a process to collect and assess reasons for such denials or terminations, including in cases of fraud, to judiciously use the new authorities and fine-tune its fraud risk management activities.
The report further mentioned some challenges in the adjudication and investigation process highlighted by the IPO staff interviewed in the study. The most cited issues were the reliability and functionality of USCIS data systems, lengthy investigation times, and staffing shortages. USCIS acknowledged that continued efforts were being made to mitigate these challenges and make the investigation process more efficient.
To sum up, while the GAO report recognizes that USCIS has incorporated noteworthy changes in its procedures to address fraud issues in the EB-5 program since 2016, it advocates further actions, as recommended in the report, to enhance fraud and national security risk monitoring in the program.
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