	USCIS Had Taken Some Steps to Assess and Address Fraud Risks, but Regular Risk Assessments and Additional Controls Could Improve Fraud Prevention and Detection

		USCIS and Others Had Identified Unique Fraud Risks to the EB-5 Program and Could Benefit from Planning and Conducting Regular Future Risk Assessments

In August 2015, we reported that USCIS had identified fraud and national  security risks in the EB-5 Program in various assessments it conducted  over time and in collaboration with its interagency partners. For example,  in 2012, USCIS met with interagency partners and National Security Staff  to assess fraud and national security risks in the EB-5 Program. Although the risk assessments conducted by USCIS and other agencies  have helped provide information to USCIS to better understand and  manage risks to the EB-5 Program, these assessments were onetime  exercises, and, as we reported in August 2015, USCIS did not have  documented plans to conduct regular future risk assessments of the  program because, according to USCIS officials, the agency would  perform them on an “as needed” basis. Given these identified fraud risks, and the constantly evolving nature of  risks to the program, we recommended in our August 2015 report that  USCIS plan and conduct regular fraud risk assessments of the EB-5  Program to better position it to identify, address, and mitigate emerging  fraud risks to the program. In February 2016, USCIS officials stated that they had  completed the data collection for their first review, which they estimated  completing by September 2016. Specifically, we found that USCIS’s information systems and processes  limit its ability to collect and use data on the EB-5 Program to identify  fraud related to individual investors or investments or to determine any  fraud risk trends across the program. USCIS  officials stated that the agency will be able to collect and maintain more  complete data on EB-5 Program petitioners and applicants through the  deployment of electronic forms in its new system, the Electronic  Immigration System (ELIS). 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, we concluded that collecting additional information  would better position USCIS to identify and mitigate potential fraud. DHS concurred and, as of February 2016,  officials reported that USCIS continues to take steps to develop and  implement a strategy to expand information collection that includes  revisions to the Form I-924, I-924A, I-526, and I-829 applications and  petitions to capture more information. USCIS Had Increased Capacity for Verifying Job Creation but Did Not Use a Valid and Reliable Methodology for Reporting Program Outcomes and Economic Benefits

		USCIS Strengthened Its Workforce, Guidance, Training, and Process for Verifying Job Creation

We reported in August 2015 that USCIS had taken action to increase its  capacity to verify job creation in response to past GAO and DHS OIG  reports that found that USCIS did not have staff with the expertise to  verify job creation estimates and that the agency’s methodologies for  verifying such estimates were not rigorous. USCIS’s May 2013 policy memorandum notes that  Congress expressly provided for a reduced investment amount in a rural  area or an area of high unemployment in order to spur immigrants to  invest in new commercial enterprises that are principally doing business  in—and creating jobs in—areas of greatest need. USCIS Did Not Have a Valid and Reliable Methodology for Reporting Program Outcomes and Economic Benefits

In August 2015, we reported that USCIS’s methodology for reporting  EB-5 Program outcomes and economic benefits was not valid and  reliable because it is based on the minimum program requirements for job  creation and investment. For example, USCIS officials stated that 90 percent of  immigrant investors reported creating more than the 10-job minimum, and  10 percent of immigrant investors pay $1 million instead of $500,000  because they invest in projects outside of a targeted employment area. However, USCIS officials said that they reported EB-5 Program outcomes  using minimum program requirements because these are the required  economic benefits stated in law, and that they are not statutorily required  to develop a more comprehensive assessment of program benefits. We therefore recommended in our August 2015 report  that USCIS track and report data that immigrant investors report, and the  agency verifies on its program forms for total investments and jobs  created through the EB-5 Program. DHS concurred and, as of February  2016, officials anticipated developing a data system that will enable  USCIS to track and report data immigrant investors report in fiscal year  2017. Other contributors to the report on which this statement is based are  listed in the report. This is a work of the U.S. government and is not subject to copyright protection in the  United States.
Why GAO Did This Study

Congress created the EB-5 visa category to promote job creation by immigrant investors in exchange for visas providing lawful permanent residency. Participants are required to invest $1 million in a business that is to create at least 10 jobs—or $500,000 for businesses located in an area that is rural or has experienced unemployment of at least 150 percent of the national average rate. Upon meeting program requirements, immigrant investors are eligible for conditional status to live and work in the United States and can apply to remove the conditions for lawful permanent residency after 2 years.
This statement discusses USCIS efforts under the EB-5 Program to (1) work with interagency partners to assess fraud and other related risks and address identified fraud risks, and (2) increase its capacity to verify job creation and use a valid and reliable methodology to report economic benefits. This statement is based on a report GAO issued in August 2015 ( GAO-15-696 ), with selected updates conducted in February 2016 to obtain information from DHS on actions it has taken to address the report's recommendations.

What GAO Found

In August 2015, GAO reported that the Department of Homeland Security's (DHS) U.S. Citizenship and Immigration Services (USCIS), which administers the Employment-Based Fifth Preference Immigrant Investor Program (EB-5 Program), had collaborated with its interagency partners to assess fraud and national security risks in the program in fiscal years 2012 and 2015. These assessments were onetime efforts; however, USCIS officials noted that fraud risks in the EB-5 Program are constantly evolving, and they continually identify new fraud schemes. USCIS did not have documented plans to conduct regular future risk assessments which could help inform efforts to identify and address evolving program risks. GAO recommended that USCIS plan and conduct regular future fraud risks assessments. DHS agreed, and as of February 2016, USCIS officials stated that they planned to complete an additional risk assessment by September 2016 and a minimum of one annually thereafter. GAO also reported in August 2015 that USCIS had taken steps to address the fraud risks it identified by enhancing its fraud risk management efforts; however, USCIS's information systems and processes limited its ability to collect and use data on EB-5 Program participants to address fraud risks in the program. For example, USCIS did not consistently enter some information it collected on participants in its information systems, such as name and date of birth, and this presented barriers to conducting basic electronic searches that could be analyzed for potential fraud. USCIS planned to collect and maintain more complete data in its new information system; however, the information system improvements with the potential to expand USCIS's fraud mitigation efforts were not to take effect until 2017 at the earliest. Given this time frame and gaps in USCIS's other information collection efforts, GAO recommended that USCIS develop a strategy to expand information collection in order to better position the agency to identify and mitigate potential fraud. DHS concurred, and in February 2016 USCIS officials stated that USCIS plans to develop such a strategy by the end of fiscal year 2016.
In August 2015, GAO reported that USCIS had increased its capacity to verify job creation by increasing the size and expertise of its workforce, among other actions. However, USCIS's methodology for reporting program outcomes and overall economic benefits was not valid and reliable because it may understate or overstate program benefits in certain instances as it is based on the minimum program requirements of 10 jobs and a $500,000 investment per investor instead of the number of jobs and investment amounts collected by USCIS on individual EB-5 Program forms. For example, total investment amounts are not adjusted downward to account for investors who do not complete the program or upward for investments of $1 million instead of $500,000. USCIS officials said they are not statutorily required to develop a more comprehensive assessment. However, tracking and analyzing data on jobs and investments reported on program forms would better position USCIS to more reliably assess and report on the EB-5 Program economic benefits. Accordingly, GAO recommended that USCIS track and report data that investors report and the agency verifies on its program forms for total investments and jobs created through the EB-5 Program. DHS agreed and plans to implement this recommendation by the end of fiscal year 2017.

What GAO Recommends

In its August 2015 report, GAO recommended that USCIS, among other things, conduct regular future risk assessments, develop a strategy to expand information collection, and analyze data collected on program forms to reliably report on economic benefits. DHS concurred with the recommendations and reported actions underway to address them.