Prospective immigrant investors seeking to participate in the EB-5  Program must complete three forms and provide supporting  documentation that USCIS or State officials, as appropriate, assess to  ensure that they have met (1) the terms of participation for the program,  (2) conditions for lawful admission for permanent residence on a  conditional basis either through adjustment of status if already in the  United States under other lawful immigration status or the immigrant visa  process if abroad, and (3) requirements of the program to have lawful  permanent resident conditions removed. 1.) USCIS and Others Have Identified Unique Fraud Risks to the EB-5 Program and Could Benefit from Planning and Conducting Regular Future Risk Assessments

USCIS has 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 its interagency partners and National Security Staff to assess  fraud and national security risks in the EB-5 Program. FDNS officials noted that fraud risks and schemes in the EB-5 Program  were constantly evolving, and that updating their 2015 risk assessment  helped them better understand the nature and scope of fraud risks to the  program. Citizenship and  Immigration Services (USCIS) denied the  petition. USCIS established an organizational structure to better address  fraud risks. Specifically, 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  trends across the program. For example,  information that could be useful in identifying program participants linked  to potential fraud is not required to be entered into USCIS’s database,  such as the applicant’s name, address, and date of birth on the Form I- 924 used to apply for regional center participation in the EB-5 Program.Moreover, FDNS officials told us that some data fields are also not  standardized, a fact that presents significant barriers to conducting basic  fraud-related searches. As we  reported in May 2015, USCIS ELIS is nearly 4 years delayed and  program costs increased by over $1 billion. USCIS does not collect certain applicant information that could help  mitigate fraud. 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 to  capitalize on existing opportunities for collecting additional information  would better position USCIS to identify and mitigate potential fraud. USCIS Has Increased Its Capacity for Verifying Job Creation but Does 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

USCIS has 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 agencies’ methodologies for verifying such estimates were not  rigorous. A targeted employment area is defined as a rural area or an area that has experienced  unemployment of at least 150 percent of the national average rate. USCIS’s Methodology for Reporting Program Outcomes Is Not Valid and Reliable in Certain Instances

USCIS’s methodology for reporting EB-5 Program outcomes and  economic benefits is not valid and reliable because it may overstate or  understate results in certain instances as it is based on the minimum  program requirements for job creation and investment instead of the  number of jobs and actual investment amounts investors report on EB-5  Program forms. However, USCIS officials said that they report 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  overall program benefits. Developing a  strategy to expand its data collection efforts, such as interviewing  investors who apply to remove conditions on their permanent resident  status and requesting additional information on applicant and petitioner  forms, could better position USCIS to address these limitations. Tracking and using more comprehensive information it collects on project  investments and job creation on the Forms I-526 and I-829 submitted by  immigrant investors and verified by USCIS would enable USCIS to more  reliably report on EB-5 Program outcomes and economic benefits. Recommendations for Executive Action

To strengthen USCIS’s EB-5 Program fraud prevention, detection, and  mitigation capabilities, and to more accurately and comprehensively  assess and report program outcomes and the overall economic benefits  of the program, we recommend that the Director of USCIS take the  following four actions: plan and conduct regular future fraud risk assessments of the EB-5 develop a strategy to expand information collection, including  considering the increased use of interviews at the I-829 phase as well  as requiring the additional reporting of information in applicant and  petitioner forms;  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; and  include a discussion of the types and reasons any relevant program  costs were excluded from the Commerce study of the EB-5 Program. In its comments, DHS concurred  with the four recommendations and described actions under way or  planned to address them.
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.
GAO was asked to review fraud risks and economic benefits for the EB-5 Program. This report examines USCIS efforts under the EB-5 Program to (1) work with interagency partners to assess fraud and other related risks, (2) address any identified fraud risks, and (3) increase its capacity to verify job creation and use a valid and reliable methodology to report economic benefits. GAO reviewed risk assessments and processes to address fraud risks, verify job creation, and report economic benefits.

What GAO Found

The Department of Homeland Security's (DHS) U.S. Citizenship and Immigration Services (USCIS) administers the Employment-Based Fifth Preference Immigrant Investor Program (EB-5 Program) and collaborated with its interagency partners to assess fraud and national security risks in the program in fiscal years 2012 and 2015. 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. 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 does not have documented plans to conduct regular future risk assessments, in accordance with fraud prevention practices, which could help inform efforts to identify and address evolving program risks.
USCIS has taken steps to address the fraud risks it identified by enhancing its fraud risk management efforts, including establishing a dedicated entity to oversee these efforts. However, USCIS's information systems and processes limit its ability to collect and use data on EB-5 Program participants to address fraud risks in the program. For example, USCIS does not consistently enter some information it collects on participants in its information systems, such as name and date of birth, a fact that presents barriers to conducting basic electronic searches that could be analyzed for potential fraud, such as schemes to defraud investors. USCIS plans to collect and maintain more complete data in its new information system; however, GAO reported in May 2015 that the new system is nearly 4 years delayed. In the meantime, USCIS does not have a strategy for collecting additional information, including some information on businesses supported by EB-5 Program investments, that officials noted could help mitigate fraud, such as misrepresentation of new businesses. 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.
USCIS increased its capacity to verify job creation by increasing the size and expertise of its workforce and providing clarifying guidance and training, among other actions. However, USCIS's methodology for reporting program outcomes and overall economic benefits is 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, 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. 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. 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.

What GAO Recommends

GAO recommends that, among other things, USCIS conduct regular future risk assessments, develop a strategy to expand information collection, and analyze the data collected on program forms to reliably report on economic benefits. DHS concurred with our four recommendations.