On September 13, 2016 the United States Government Accountability Office (GAO) published a report to Congress on the EB-5 Regional Center Program. The new 27-page report is a follow up to their August 2015 report. GAO was asked to review actions taken by USCIS to address fraud risks in the EB-5 Program since its August 2015 report. 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, non-generalizable 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.
The report finds that progress has been made to detect and prevent fraud but also suggests that additional actions can be made to further the efforts of United States Citizenship and Immigration Services (USCIS).
IIUSA Vice President Robert C. Divine commented, “The GAO just put out a fraud risk report on EB-5 saying U.S. Citizenship and Immigration Services (USCIS) lacks, and is now starting to prepare, a “fraud risk profile” document that consolidates all the considerations and actions that have been accumulated over time. Furthermore, USCIS has entered into a Memorandum of Understanding (MOU) with Financial Crimes Enforcement Network (FinCEN), under the Department of the Treasury, to do background checks on investors and Regional Center principals. USCIS also has been investigating the possibility of digitizing EB-5 filings to use anti-plagiarism software to detect duplication of language among various filings based on a belief that it may increase its ability to detect fraud.”
From the Report:
“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 non generalizable 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.”