Immigration officials not doing enough to assess fraud in foreign investor visa program, GAO says

Immigration officials not doing enough to assess fraud in foreign investor visa program, GAO says

Federal immigration officials aren't doing enough to identify and address unique fraud and national security risks in an immigrant visa program that encourages foreign individuals to make capital investments and create jobs in the U.S. in exchange for a green card and path to citizenship, congressional investigators said in a recent report.

The Government Accountability Office criticized the U.S. Citizenship and Immigration Services in several areas, including the lack of a plan to regularly assess future risks in the Employment-Based Fifth Preference Immigrant Investor, or EB-5, Program, poor data collection efforts on participants, and an unreliable methodology for reporting outcomes and benefits.

Under the EB-5 program, foreign investors must provide $1 million in new commercial enterprises – or $500,000 in targeted areas – that result in the creation of at least 10 full-time jobs. Subsequently, they and their dependents become eligible for two-year conditional green cards. The program was initially launched as a pilot in 1992 and then reauthorized by Congress seven times since.

In recent years, the program has grown substantially. From fiscal 2011 to fiscal 2014, the total number of EB-5 visas issued rose from nearly 3,000 to more than 9,000, the Aug. 12 report (pdf) noted. But potential fraud in the program has equally grown and USCIS efforts to combat it haven't been enough.

"Unique fraud risks identified in the program included uncertainties in verifying that the funds invested were obtained lawfully and various investment-related schemes to defraud investors," GAO said.

USCIS and interagency partners assessed such risks in fiscal years 2012 and 2015, but they were one-time efforts. While agency officials admit fraud within the program is constantly evolving and new risks are identified all the time, they don't have plans to conduct regular risk assessments, which could help USCIS better identify, evaluate and deal with future and changing risks, GAO said.

"This may be of particular importance as USCIS is unable to comprehensively identify and address fraud trends across the program because of its reliance on paper-based documentation and because it faces certain limitations with using available data and with collecting additional data on EB-5 immigrant investors or investments," the report added.

For example, USCIS doesn't consistently enter some participant data such as name and date of birth that it collects, limiting electronic searches for analyzing potential fraud.

While the agency has plans to collect and maintain a more comprehensive database in a new information system, GAO said that new system is nearly four years delayed. Meanwhile, USCIS hasn't developed a strategy to collect additional information.

"Given that information system improvements with the potential to expand USCIS's fraud mitigation efforts will not take effect until 2017 at the earliest and that gaps exist in USCIS's other information collection efforts, developing a strategy for collecting such
information would better position USCIS to identify and mitigate potential fraud," the report noted.

GAO also gave the agency low marks for reporting program outcomes and overall economic benefits. It called the agency's methodology "not valid and reliable because it may understate or overstate program benefits in certain instances."

"For example, USCIS reported 4,500 jobs for 450 investors on one project using its methodology instead of 10,500 jobs reported on EB-5 program forms for that project," the report said. "Further, investment amounts are not adjusted for investors who do not complete the program or invest $1 million instead of $500,000. USCIS officials said they are not statutorily required to develop a more comprehensive assessment." 

This is important for Congress to know so they can make a better decision about evaluating EB-5 and whether they should reauthorize it.

The Homeland Security Department agreed with GAO's recommendations to constantly assess the threats and develop a strategy to collect information, among others. The department said it's taking or planning actions to address the problems.



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