Immigrant Investor Program: Opportunities Exist to Improve Fraud and National Security Risk Monitoring
Fast Facts
Under the Immigrant Investor Program, foreign nationals who invest in projects that create or sustain U.S. jobs can get a visa and a path to citizenship.
The program presents unique fraud and national security risks for U.S. Citizenship and Immigration Services (USCIS) to address, such as schemes to defraud immigrant investors.
While USCIS collects some data on fraud and national security risks, more specific data—such as the types and characteristics of fraud in the program—could help the agency better address these risks. We recommended ways to collect and track more specific data.
Highlights
What GAO Found
The employment-based fifth preference (EB-5) visa category was created in 1990 to encourage foreign investors to provide capital and promote job creation in the U.S. In return, investors and eligible family members obtain a path to citizenship. U.S. Citizenship and Immigration Services (USCIS) administers the program and investigates any fraud and national security concerns. EB-5 participation declined sharply from fiscal years 2016 through 2021, primarily due to fewer Chinese investors. During this time period, Regional Centers accounted for about 93 percent of all EB-5 petitions. These centers included major real estate development projects.
EB-5 Initial Investor Petitions U.S. Citizenship and Immigration Services Received, by Investor Country, Fiscal Years 2016 through 2021
USCIS collects some data on EB-5 fraud and national security concerns that it investigates. However, it does not have readily-available data about the types and characteristics of fraud unique to the program, such as those related to schemes to defraud investors. Systematically collecting and tracking this information would help USCIS better monitor, assess, and respond to evolving fraud trends and risks. Further, the EB-5 Reform and Integrity Act of 2022 gives USCIS new denial and termination authorities to address fraud and national security concerns. However, USCIS does not collect data on the reasons for (1) denying EB-5 petitions and applications, and (2) terminating Regional Centers. Developing a process to collect and assess these reasons would provide USCIS with valuable insight into program risks.
USCIS conducted at least one fraud or national security risk assessment on an aspect of the EB-5 program each fiscal year since 2016. In addition, USCIS has undertaken several initiatives to address overall program fraud and national security risks. These include conducting compliance reviews; increased trainings on fraud and national security indicators; and additional screening for investors linked to companies or countries of concern.
Why GAO Did This Study
The EB-5 Immigrant Investor Program enables foreign investors and their eligible family members to obtain lawful permanent resident status and a path to citizenship. Program participants must choose one of two options: (1) invest a minimum of $800,000 in a business that creates at least 10 jobs, or (2) pool their investment with one or more other qualified immigrants in larger development projects under the EB-5 Regional Center Program.
GAO was asked to review the EB-5 program. This report addresses, among other things: (1) characteristics of EB-5 investors, (2) the extent USCIS collects data to monitor fraud and national security concerns in the EB-5 program, and (3) USCIS efforts to assess and address overall EB-5 fraud and national security risks. GAO analyzed data from fiscal years 2016 through 2021; reviewed USCIS procedures and fraud and national security assessments; and interviewed agency officials and a non-generalizable sample of 15 of about 90 USCIS staff responsible for adjudicating and investigating EB-5 petitions.
This report is a public version of a sensitive report issued in December 2022.
Recommendations
GAO is recommending that USCIS (1) systematically collect and track data on the different types of fraud in the EB-5 program; and (2) develop a process to collect and assess the reasons for denying petitions and applications and terminating EB-5 Regional Centers. DHS concurred with the recommendations.
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| United States Citizenship and Immigration Services | The Director of USCIS should systematically collect and track data on the types and characteristics of EB-5 program fraud. (Recommendation 1) |
Closed – Implemented
In April 2023, we reported that while U.S. Citizenship and Immigration Services (USCIS) collects some data on EB-5 fraud and national security concerns it investigates, it does not have readily-available data about the types and characteristics of fraud unique to the program. Specifically, we reported that, due to limitations in its tools for collecting such data, USCIS does not have readily-available automated information for monitoring trends and identifying evolving fraud risks within the program. We recommended that USCIS systematically collect and track data on the different types of fraud in the EB-5 program. Doing so could help USCIS to better monitor and assess fraud trends in the EB-5 program and respond to unique and evolving fraud risks. USCIS agreed with this recommendation. In October 2023, USCIS reported that it had modified the case management tool its Fraud Detection and National Security officers use to include a field to record types of EB-5 fraud. This tool is the agency's central repository for fraud, public safety, and national security cases. USCIS also updated instructions for officers to use the new fields. These steps address the intent of our recommendation and should enhance USCIS reporting on EB-5 fraud types and characteristics.
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| United States Citizenship and Immigration Services | The Director of USCIS should develop and implement a process to collect and assess data on reasons for EB-5 petition and application denials and Regional Center terminations, including whether fraud or national security was a factor in the action. (Recommendation 2) |
Closed – Implemented
In April 2023, we reported that U.S. Citizenship and Immigration Services (USCIS) did not have a process in place to collect and assess data on the reasons for (1) denying EB-5 petitions and applications, and (2) terminating EB-5 Regional Centers. We further reported that the EB-5 Reform and Integrity Act of 2022 gave USCIS new denial and termination authorities to address fraud and national security concerns. In light of the new authorities, we recommended that USCIS develop and implement a process to collect and assess data on reasons for EB-5 petition and application denials and Regional Center terminations-including whether fraud or national security is a factor. Doing so could provide USCIS with valuable insight into program risk and how the agency is utilizing its new authorities. USCIS agreed with this recommendation. In December 2023, USCIS completed modifications to several data systems of record that are used to collect and store information on EB-5 petitions and applications and Regional Centers. These modifications added new fields to record the reason(s) USCIS denied a petition or application, or terminated a Regional Center. These actions address the intent of our recommendation and should enhance USCIS' ability to collect and assess data on denials and termination.
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