	Background

		EB-5 Program

Under the EB-5 Program Regional Center model, first enacted as a pilot  program in 1992 and reauthorized numerous times since, a certain  number of the EB-5 visas are set aside annually for immigrant investors  investing within economic units called regional centers, which are  established to promote economic growth. Supporting documentation is  assessed to ensure that the prospective immigrant investors have met (1)  the terms of participation for the program, (2) criteria for lawful admission  for permanent residence on a conditional basis, and (3) requirements of  the program to have the conditional basis of his or her lawful permanent  resident status removed. This includes conducting and  planning risk assessments to gather additional information on potential  fraud risks to the program. USCIS is also taking steps to collect more  applicant and petitioner information through a random site visit pilot and  expanding its use of background checks, among other things, to help  improve its ability to identify specific incidence of fraud. Further, USCIS  has taken preliminary steps to digitize and analyze the paper files  submitted by petitioners and applicants to the program. DHS  concurred with our August 2015 recommendation that USCIS plan and  conduct regular fraud risk assessments of the EB-5 Program in the  future. For example, we reported that in one instance, a  couple created a regional center and solicited immigrant investors with  promises of investing in a local energy company. Reliance on Paper Files Continues to Hinder USCIS’s Ability to Mitigate Fraud in EB-5, and Planned Digitization Efforts Have Not Yet Been Implemented

We found in August 2015 that 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. These challenges exist in part because many of the files were several  thousand pages long and would take significant time to review. According to an FDNS official, this supporting information can be  an important source of potential fraud indicators as it contains details  such as business plans associated with the investment. USCIS Has Taken Steps to Incorporate Fraud Risk Management Leading Practices, but Has Not Yet Created a Fraud Risk Profile to Guide Its Efforts

USCIS continues to take steps to improve overall fraud risk management  but has not incorporated certain leading practices that could benefit its  efforts. In particular, USCIS has taken actions that  closely align with the first and second components, which call for federal  managers to (1) commit to combating fraud by creating an organizational  culture and structure conducive to fraud risk management; and (2) plan  regular fraud risk assessments and assess risks to determine a fraud risk  profile. While USCIS has taken steps to implement selected leading fraud- management practices, we found that USCIS has not developed a fraud  risk profile—an overarching document that guides an organization’s  fraud-management efforts—as called for by the Fraud Risk Framework. Instead, USCIS’s completed and  planned risk assessments span multiple years and were developed as  separate documents and reports, and USCIS lacks a unifying document  that consolidates these findings and informs the specific control activities  managers design and implement. Absent a fraud risk  profile, USCIS may not be well positioned to identify and prioritize fraud  risks in the EB-5 Program and ensure the appropriate controls are in  place to mitigate these risks. The continuation of planned  efforts to digitize the files, including the supporting evidence submitted by  applicants and petitioners, could help USCIS better identify fraud  indicators in the program. Recommendation for Executive Action

To strengthen USCIS’s EB-5 Program fraud risk management, we  recommend the Director of USCIS develop a fraud risk profile that aligns  with leading practices identified in GAO’s Fraud Risk Framework. Leading practices for each of these components  include the following:  (1)  commit: create an organizational culture to combat fraud at all  levels of the agency, and designate an entity within the program  office to lead fraud risk management activities;  (2)  assess: assess the likelihood and impact of fraud risks, and  determine risk tolerance, examine the suitability of existing  controls, and prioritize residual risks;  (3)  design and implement: develop, document, and communicate an  antifraud strategy, focusing on preventive control activities; and  (4)  evaluate and adapt: collect and analyze data from reporting  mechanisms and instances of detected fraud for real-time  monitoring of fraud trends, and use the results of monitoring,  evaluations, and investigations to improve fraud prevention,  detection, and response. Identified Fraud Risks. Appendix II: Comments from the Department of Homeland Security
Why GAO Did This Study

Congress created the EB-5 visa category to promote job creation and capital investment by immigrant investors in exchange for lawful permanent residency and a path to citizenship. Participants must invest either $500,000 or $1 million in a business that is to create at least 10 jobs. 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 conditional basis of lawful permanent residency after 2 years. In August 2015, GAO reported on weaknesses in certain USCIS fraud mitigation activities, and made two related recommendations.
GAO was asked to review actions taken by USCIS to address fraud risks in the EB-5 program since its August 2015 report. This report examines the extent to which USCIS (1) has taken steps to enhance its fraud detection and mitigation efforts; and (2) has incorporated selected leading fraud risk management practices into its efforts. GAO reviewed relevant program documentation and information; selected and reviewed a random, nongeneralizable sample of immigrant investor petitions and regional-center applications submitted between fiscal years 2010 and 2014; and compared USCIS's actions against GAO's Fraud Risk Framework.

What GAO Found

The Department of Homeland Security's U.S. Citizenship and Immigration Services (USCIS) has recently taken steps intended to enhance fraud detection and mitigation activities for the Employment-Based Fifth Preference Immigrant Investor Program (EB-5 Program) and address previous GAO recommendations.
This includes actions such as conducting and planning additional risk assessments to gather additional information on potential fraud risks to the program. For example, USCIS is leveraging overseas staff to investigate potential fraud associated with unlawful sources of immigrant investor funds and is conducting a site visit pilot to help assess the potential risks of fraud among EB-5 program investments. USCIS is also taking steps to collect more information about EB-5 program investments and immigrant investors through new, revised forms and expanding its use of background checks, among other things, to help improve its ability to identify specific incidence of fraud. However, fraud mitigation in the EB-5 Program is hindered by a reliance on voluminous paper files, which limit the agency's ability to collect and analyze program information. In its review of a nongeneralizable selection of files associated with EB-5 program regional centers and immigrant investors, GAO found that identifying fraud indicators is extremely challenging. For example, many of these files were several thousand pages long and would take significant time to review. According to USCIS documentation, the program anticipates receiving approximately 14 million pages of supporting documentation from its regional-center applicants and immigrant investor petitioners annually. Recognizing these limitations, USCIS has taken preliminary steps to study digitizing and analyzing the paper files submitted by petitioners and applicants to the program, which could help USCIS better identify fraud indicators in the program; however, these efforts are in the early stages.
USCIS has incorporated selected leading fraud risk management practices into its efforts but could take additional actions to help guide and document its efforts. GAO's Fraud Risk Framework is a set of leading practices that can serve as a guide for program managers to use when developing efforts to combat fraud in a strategic, risk-based manner. USCIS's actions align with two key components of the Fraud Risk Framework: (1) commit to combating fraud by creating an organizational culture and structure conducive to fraud risk management such as by providing specialized fraud awareness training; and (2) assess risks by planning and completing regular fraud risk assessments. However, USCIS has not developed a fraud risk profile, an overarching document that guides its fraud management efforts, as called for in the Fraud Risk Framework. Instead, USCIS's risk assessments, spanning multiple years, were developed as separate documents and reports, and there is not a unifying document that consolidates and systematically prioritizes these findings. Without a fraud risk profile, USCIS may not be well positioned to identify and prioritize fraud risks in the EB-5 Program, ensure the appropriate controls are in place to mitigate fraud risks, and implement other Fraud Risk Framework components.

What GAO Recommends

GAO recommends that USCIS develop a fraud risk profile that aligns with leading practices identified in GAO's Fraud Risk Framework. The Department of Homeland Security concurred with GAO's recommendation.