IMMIGRANT 

INVESTOR 

PROGRAM 

Additional Actions 

Needed to Better 

Assess Fraud Risks 

and Report Economic 

Benefits

Report to Congressional Requesters

August 2015

GAO-15-696

United States Government Accountability Office
United States Government Accountability Office

Highlights of GAO-15-696, a report to 

congressional requesters

August 2015

IMMIGRANT INVESTOR PROGRAM

Additional Actions Needed to Better Assess Fraud 

Risks and Report Economic Benefits

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 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.

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. 

View GAO-15-696. For more information, 

contact Rebecca Gambler at (202) 512-8777 

or gamblerr@gao.gov, or Seto Bagdoyan at 

(202) 512-6722 or bagdoyans@gao.gov.
Page i GAO-15-696 Immigrant Investor Program

Letter 1

Background 12

USCIS and Others Have Identified Unique Fraud Risks to the EB5 Program and Could Benefit from Planning and Conducting 

Regular Future Risk Assessments 15

USCIS Has Taken Some Steps to Address Fraud Risks, but 

Additional Controls Could Improve Fraud Prevention and 

Detection 23

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 34

Conclusions 45

Recommendations for Executive Action 46

Agency Comments and our Evaluation 46

Appendix I Comments from the Department of Homeland Security 50

Appendix II GAO Contacts and Staff Acknowledgments 52

Figure

Figure 1: U.S. Citizenship and Immigration Services’ (USCIS) 

Immigrant Investor Program Investor Petition and 

Application Process 14

Contents
Page ii GAO-15-696 Immigrant Investor Program

Abbreviations:

CLAIMS Computer Linked Application Information 

 Management System 

Commerce Department of Commerce 

DHS Department of Homeland Security

DOJ Department of Justice 

EB-5 Employment-Based Fifth Preference 

EB-5 Program Employment-Based Fifth Preference Immigrant 

 Investor Program

ESA Economics and Statistics Administration 

FBI Federal Bureau of Investigation

FDNS Fraud Detection and National Security 

FinCEN Financial Crimes Enforcement Network

green card lawful permanent residency

HSI Homeland Security Investigations 

ICE U.S. Immigration and Customs Enforcement 

iCLAIMS Intranet Computer Linked Application Information 

Management System

IIUSA Association to Invest in USA 

IMPLAN Impact Analysis for Planning 

INA Immigration and Nationality Act 

INS Immigration and Naturalization Service 

IPO Immigrant Investor Program Office 

OIG Office of Inspector General 

OMB Office of Management and Budget 

preference benefit employment-based immigrant visa category

REDYN Regional Dynamic Models 

REMI Regional Economic Models, Inc. 

RIMS II Regional Input-Output Modeling System 

SEC U.S. Securities and Exchange Commission 

State Department of State 

USCIS U.S. Citizenship and Immigration Services

USCIS ELIS U.S. Citizenship and Immigration Services 

 Electronic Immigration System
Page iii GAO-15-696 Immigrant Investor Program

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Page 1 GAO-15-696 Immigrant Investor Program

441 G St. N.W.

Washington, DC 20548

August 12, 2015

Congressional Requesters

Congress created an additional employment-based immigrant visa 

category (preference benefit) as part of the Immigration Act of 1990 to 

promote job creation and encourage capital investment in the United 

States by foreign investors in exchange for lawful permanent residency 

(green card) and a path to citizenship.1 This category, commonly referred 

to as Employment-Based Fifth Preference (EB-5), is for employment 

creation by qualified immigrants seeking to enter the United States to 

engage in a new commercial enterprise.2

 

1

Pub. L. No. 101-649, tit. I, subtit. B, pt. 2, § 121, 104 Stat. 4978, 4989-94 (codified as 

amended at 8 U.S.C. §§ 1153(b)(5), 1186b). The accompanying report of the Senate 

Judiciary Committee states that the EB-5 visa category “is intended to create new 

employment for U.S. workers and to infuse new capital into the country.” See S. Rep. No. 

101-55, at 21 (1989).

Upon meeting certain EB-5 

Immigrant Investor Program (EB-5 Program) requirements—including 

investing $1 million (or $500,000 in targeted employment areas) in a new 

commercial enterprise that will result in the creation of at least 10 full-time 

jobs—immigrant investors and their eligible dependents are eligible to 

receive 2-year conditional green cards to live and work in the United 

2

See 8 U.S.C. § 1153(b)(5)(A). A commercial enterprise is any for-profit activity formed for 

the ongoing conduct of lawful business. Examples of a commercial enterprise include a 

sole proprietorship, partnership (whether limited or general), holding company, joint 

venture, corporation, business trust, or other entity that may be publicly or privately 

owned. See 8 C.F.R. § 204.6(e). Pursuant to the 21st Century Department of Justice 

Appropriations Authorization Act of 2002, the term “commercial enterprise” specifically 

includes a limited partnership. See Pub. L. No. 107-273, div. C, tit. I, subtit. B, ch. 2, § 

11036(a)(1)(A), (b)(3), 116 Stat. 1758, 1846-47 (codified at 8 U.S.C. §§ 1153(b)(5)(A), 

1186b(f)(3)).

Letter
Page 2 GAO-15-696 Immigrant Investor Program

States.3 Within the 90-day period prior to the second anniversary of the 

date on which an immigrant investor obtained conditional status, he or 

she can apply to remove the conditional basis of his or her green card.4

Approximately 10,000 EB-5 visas per fiscal year are made available to 

qualified immigrant investors and their families seeking to immigrate to 

the United States through the EB-5 Program.5

 

3

See 8 U.S.C. §§ 1153(b)(5)(A) (general EB-5 requirements), (C) (amount of capital 

required), (D) (full-time employment defined), 1186b(a)(1) (alien entrepreneur receives 

conditional lawful permanent resident status), 1255(a) (adjustment of status), 1201 

(issuance of visas); 8 C.F.R. § 204.6(e) (definitions), (f) (required amounts of capital), (h) 

(establishment of a new commercial enterprise), (j)(4)(ii) (To show that the new 

commercial enterprise established through a capital investment in a troubled business 

meets the statutory employment creation requirement, the petition must be accompanied 

by evidence that the number of existing employees is being or will be maintained at no 

less than the preinvestment level for a period of at least 2 years). After initial EB-5 

Program requirements are met, approval of the adjustment of status application or 

admission to the United States with an EB-5 visa must occur for immigrant investors and 

their eligible dependents to obtain conditional permanent resident status. Eligible 

dependents (or derivative family members) are the immigrant investor’s spouse and 

unmarried children under the age of 21. See 8 U.S.C. §§ 1153(d), (h), 1186b(a), (f). Under 

8 U.S.C. § 1186b(f)(1), an immigrant investor who obtains permanent resident status 

(conditional or otherwise) is considered an alien entrepreneur. For the purpose of this 

report, we use the term “immigrant investor” to refer to an immigrant investor or alien 

entrepreneur.

4

See 8 U.S.C. § 1186b(c)(1) (requirements for removal of permanent resident conditions 

for an alien entrepreneur, alien spouse, or alien child), (d)(2) (period for filing petition). 

Where an alien entrepreneur’s Form I-829 petition for removal of permanent resident 

conditions is denied, the U.S. Citizenship and Immigration Services (USCIS) will terminate 

the status of the alien and his or her spouse and any children, and initiate removal 

proceedings. See 8 C.F.R. § 216.6(d)(2). If an alien entrepreneur fails to file for removal of 

conditions within the 90-day period prior to the second anniversary of the date on which 

conditional status was obtained, such status will automatically terminate and removal 

proceedings will be initiated. See 8 C.F.R. § 216.6(a)(5).

5

See 8 U.S.C. §§ 1151(d) (worldwide level for employment-based immigrants), 

1153(b)(5)(A) (no more than 7.1 percent of employment-based visas are to be made 

available to qualified immigrants seeking to enter the United States for the purpose of 

engaging in a new commercial enterprise).
Page 3 GAO-15-696 Immigrant Investor Program

Under the EB-5 Regional Center Program, first enacted as a pilot in 1992 

and reauthorized seven times since,6 a certain number of the EB-5 visas 

are set aside annually for immigrant investors in economic units called 

regional centers, which are established to promote economic growth.7

Most recently, the Regional Center Program was extended until 

September 30, 2015, and the term “pilot” was removed from the name of 

the program.8 Under the Regional Center Program, immigrant investors 

can pool their investments with those of other foreign and U.S. investors 

to fund a new commercial enterprise within a regional center. An 

immigrant investor in any new commercial enterprise, including under the 

Regional Center Program, can meet the requirement that he or she be 

engaged in the management of that enterprise, as opposed to 

maintaining a purely passive role,9 if he or she is, for example, a limited 

partner of a limited partnership.10

 

6

See Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies

Appropriations Act, 1998, Pub. L. No. 105-119, tit. I, § 116(a), (b), 111 Stat. 2440, 2467 

(1997); Visa Waiver Permanent Program Act, Pub. L. No. 106-396, tit. IV, § 402(a), 114 

Stat. 1637, 1647 (2000); Basic Pilot Program Extension and Expansion Act of 2003, Pub. 

L. No. 108-156, § 4(b), 117 Stat. 1944, 1945; Consolidated Security, Disaster Assistance, 

and Continuing Appropriations Act, 2009, Pub. L. No. 110-329, div. A, §§ 106(3), 144, 122 

Stat. 3574, 3575, 3581 (2008); Omnibus Appropriations Act, 2009, Pub. L. No. 111-8, div. 

J, § 101, 123 Stat. 524, 988; Department of Homeland Security Appropriations Act, 2010, 

Pub. L. No. 111-83, tit. V, § 548, 123 Stat. 2142, 2177 (2009); Reauthorization of EB-5 

Regional Center Program, Pub. L. No. 112-176, § 1(1), (2), 126 Stat. 1325 (2012).

Immigrant investors must demonstrate 

7

See Departments of Commerce, Justice, and State, the Judiciary, and Related Agencies 

Appropriations Act, 1993, Pub. L. No. 102-395, tit. VI, § 610, 106 Stat. 1828, 1874 (1992) 

(codified as amended as a note under 8 U.S.C. § 1153). Under 8 C.F.R. § 204.6(e), a 

regional center is defined as any economic unit, public or private, that is involved with the 

promotion of economic growth, including increased export sales, improved regional 

productivity, job creation, and increased domestic capital investment. See also 8 C.F.R. § 

204.6(m)(3), (6).

8

See Pub. L. No. 112-176, § 1(1), (2), 126 Stat. 1325 (2012).

9

See 8 C.F.R. § 204.6(j)(5). In the final rule implementing section 121 of the Immigration 

Act of 1990, legacy Immigration and Naturalization Service (INS) noted that “[t]he Senate 

Committee on the Judiciary specifically endorsed a requirement of some degree of 

participation on the part of the alien entrepreneur beyond mere passive investment.” See 

Employment-Based Immigrants, 56 Fed. Reg. 60,897, 60,904 (Nov. 29, 1991) (codified at 

8 C.F.R. pts. 103, 204); S. Rep. No. 101-55, at 21.

10Under 8 C.F.R. § 204.6(j)(5)(iii), if the petitioner is a limited partner and the limited 

partnership agreement provides the petitioner with certain rights, powers, and duties 

normally granted to limited partners under the Uniform Limited Partnership Act, the 

petitioner will be considered sufficiently engaged in the management of the new 

commercial enterprise. 
Page 4 GAO-15-696 Immigrant Investor Program

that their investment in a new commercial enterprise will result in the 

creation or, in the case of a troubled business, preservation or creation 

(or some combination of the two), of at least 10 full-time positions for 

qualifying employees.11 Immigrant investors in a regional center 

commercial enterprise may meet the statutory employment creation 

requirement by providing evidence of creating or preserving, either 

directly or indirectly, 10 full-time positions.12

 

118 U.S.C. § 1153(b)(5)(A)(ii) (statutory employment creation requirement). In the initial 

petition stage, an immigrant investor must provide documentation of requisite job creation, 

or a comprehensive business plan showing that the need for not fewer than 10 qualifying 

employees will result within the 2-year period commencing 6 months after the adjudication 

of the Form I-526 petition. See 8 C.F.R. § 204.6(j)(4)(i). For an investment in a troubled 

business, the petitioner must provide evidence that the number of existing employees is 

being or will be maintained at no less than the preinvestment level for a period of at least 2 

years, and that the statutory numeric requirement is met. See 8 C.F.R. § 204.6(j)(4)(ii). In 

the final I-829 stage, an immigrant investor must show that he or she created or can be 

expected to create within a reasonable time (defined as within a year of the 2-year 

anniversary of the alien’s admission as, or adjustment to conditional permanent resident) 

10 full-time jobs for qualifying employees, and investors in troubled businesses must 

submit evidence that the commercial enterprise maintained the number of existing 

employees at no less than the preinvestment level for the previous 2 years and that the 

statutory numeric requirement is met. See 8 C.F.R. § 216.6(a)(4)(iv), (c)(1)(iv).

In recent years, the Regional 

Center Program has increased in popularity as a viable source of lowinterest funding for major real estate development projects, such as the 

Barclays Center—a multipurpose indoor arena in Brooklyn, New York—

and the Marriott Convention Center Hotel in Washington, D.C. In fiscal 

year 2014, the maximum number of visas available were allocated for the 

EB-5 Program—approximately 10,000 annually, with about 95 percent of 

the investments in regional center projects.

12See Pub. L. No. 102-395, tit. VI, § 610(c), 106 Stat. at 1874 (codified as amended as a 

noted under 8 U.S.C. § 1153). Under U.S. Citizenship and Immigration Services (USCIS) 

policy, indirect jobs are those held outside of the new commercial enterprise but created 

as a result of the investment made by an immigrant investor in such commercial 

enterprise, which then makes the capital available to a separate job-creating entity. In 

other words, indirect jobs are any jobs created by the investment but not occupied by 

individuals with an employee-employer relationship with the new commercial enterprise. 

Regional center investors are permitted to claim credit for both direct and indirect jobs 

estimated to have been created through revenues generated from increased exports 

resulting from the new commercial enterprise, as demonstrated using reasonable 

methodologies such as multiplier tables, feasibility studies, analyses of foreign and 

domestic markets for the goods or services to be exported, and other economically or 

statistically valid forecasting devices that indicate the likelihood that the business will 

result in increased employment. See Pub. L. No. 102-395, § 610, 106 Stat. at 1874; 8 

C.F.R. § 204.6(j)(4)(iii), (m)(3), (7).
Page 5 GAO-15-696 Immigrant Investor Program

Several federal and state agencies are involved to varying degrees in 

ensuring the integrity of the EB-5 Program. The Immigrant Investor 

Program Office (IPO), within the Department of Homeland Security’s 

(DHS) U.S. Citizenship and Immigration Services (USCIS), administers 

the EB-5 Program—adjudicating applications and petitions while striving 

to ensure that program participants, including immigrant investors and 

principals operating U.S. regional centers, comply with program 

requirements. USCIS also has a Fraud Detection and National Security 

(FDNS) unit charged with preventing, detecting, and responding to 

allegations of fraud in the program. States contribute to the EB-5 

process—in relation to investors seeking a reduced investment of 

$500,000 in a targeted employment area—by certifying through the state 

government’s authorized body that the geographic or political subdivision 

in which the enterprise is, or will be principally doing business, has been 

designated a high-unemployment area.13 After USCIS approves initial 

petitions for immigrant investors to participate in the program, the 

Department of State (State) adjudicates the immigrant visa applications, 

conducting background checks and other activities to help ensure 

investors and their families comply with national security and other 

requirements for admission to the United States.14

 

13See 8 C.F.R. § 204.6(i), (j)(6)(ii)(B). A targeted employment area is an area that, at the 

time of the investment, is either a rural area or an area that has experienced 

unemployment of at least 150 percent of the national average rate. See 8 U.S.C. § 

1153(b)(5)(B)(ii); 8 C.F.R. § 204.6(e).

FDNS refers cases of 

fraud related to immigrant investors to DHS’s U.S. Immigration and 

Customs Enforcement (ICE), Homeland Security Investigations (HSI) for 

investigation. The U.S. Securities and Exchange Commission (SEC) 

investigates allegations of fraud or other misconduct in connection with 

securities offerings related to EB-5 projects by U.S. principals operating 

regional centers, or others. The Department of Justice’s (DOJ) Federal 

Bureau of Investigation (FBI), as the lead federal agency for combating 

terrorism, investigates any activity by investors or regional centers that 

may pose a risk to national security as well as other criminal activities.

14USCIS adjudicates Form I-485 for EB-5 immigrant investors who are already in the 

United States under other lawful immigration status, and who are seeking to adjust status 

to conditional permanent residency. Aliens who are deemed inadmissible under 8 U.S.C. 

§ 1182 are generally ineligible to receive visas, ineligible to be admitted to the United 

States, and ineligible for adjustment of status. See 8 U.S.C. §§ 1182(a), 1201(h), 1255(a).
Page 6 GAO-15-696 Immigrant Investor Program

In 2005, we reported that, among other things, USCIS had not issued 

implementing regulations to adjudicate hundreds of pending EB-5 

petitions and applications.15 Specifically, we reported that USCIS 

suspended about 900 EB-5 applications in 1998 because the financial 

arrangements in the applications did not comport with the statute and 

program regulations, and that guidance to adjudicators was unclear on 

how to determine the type and value of benefit to the U.S. economy for 

different types of investments. DHS concurred with our recommendation 

to finalize and issue regulations, publishing a proposed rule in the Federal 

Register in 2011.16

The DHS Office of Inspector General (OIG) has also issued two reports 

on the EB-5 Program.

However, as of June 2015, USCIS officials said that 

they had not finalized these regulations because of competing priorities.

17

 

15GAO, Immigrant Investors: Small Number of Participants Attributed to Pending 

Regulations and Other Factors, 

Specifically, in December 2013, the DHS OIG 

reported that several conditions had prevented USCIS from administering 

and managing the EB-5 Program effectively. These conditions, as cited 

by the report, included, among other things, laws and regulations that do 

not give USCIS the authority to prevent a regional center’s participation in 

GAO-05-256 (Washington, D.C.: Apr. 1, 2005). The 21st 

Century Department of Justice Appropriations Authorization Act of 2002 required 

promulgation of regulations in order to implement statutory directives related to two 

categories of immigrant investors whose initial EB-5 petitions were approved after January 

1, 1995, and before August 31, 1998, and for whom a decision was pending on either (1) 

a petition for removal of permanent residence conditions, or (2) an application for 

adjustment of status or an EB-5 immigrant visa. See Pub. L. No. 107-273, §§ 11031-33, 

116 Stat. at 1837-46.

16See Treatment of Aliens whose Employment Creation Immigrant (EB-5) Petitions were 

Approved After January 1, 1995 and Before August 31, 1998, 76 Fed. Reg. 59,927 (Sept. 

28, 2011) (to be codified at 8 C.F.R. pts. 216, 245).

17DHS OIG, United States Citizenship and Immigration Services’ Employment-Based Fifth 

Preference (EB-5) Regional Center Program. OIG-14-19 (Washington, D.C.: Dec. 12, 

2013); DHS OIG, Investigation into Employee Complaints about Management of U.S. 

Citizenship and Immigration Services’ EB-5 Program, (Washington, D.C.: Mar. 24. 2015).
Page 7 GAO-15-696 Immigrant Investor Program

the program on the basis of fraud or national security concerns.18 The 

report concluded that because of difficulties ensuring the integrity of the 

Regional Center Program, USCIS was limited in its ability to prevent fraud 

or national security threats and could not demonstrate that the program 

was benefiting the U.S. economy and creating full-time employment as 

required by law. Further, in March 2015, the DHS OIG conducted an 

investigation of employee complaints about the EB-5 Program and 

reported that the former director’s communication with external 

stakeholders on specific matters outside the normal procedures, coupled 

with favorable action that deviated from the regulatory scheme, had 

created an appearance of favoritism and special access.19 The DHS 

Secretary, in response to the OIG findings, acknowledged the popularity 

of the program as an economic development tool but also expressed 

concerns about the program and asked Congress for help in 

strengthening the program’s integrity.20

You asked us to review the fraud risks and economic benefits for the EB5 Program. This report addresses the following questions:

He noted that in the past, DHS 

had unsuccessfully sought a number of statutory enhancements to the 

program’s integrity and urged Congress to work with the department to 

strengthen the security and integrity of the program.

• To what extent have USCIS and its interagency partners assessed 

fraud risks and other related risks in the EB-5 Program and what risks 

did they identify?

 

18In comments on this OIG report, USCIS stated that it already has authority to deny or 

terminate a regional center based on fraud or misrepresentation, but the statutory 

framework leaves other significant gaps in USCIS authorities, especially with regard to 

national security. USCIS agreed with OIG in that explicit authority under 8 C.F.R. § 205.2 

(revocation on notice) to terminate a regional center based upon fraud and national 

security concerns is needed. However, USCIS asserted that it lacked authority to 

promulgate such regulations, and pointed out that it designates regional centers pursuant 

to Public Law 102-395, § 610 (codified as amended as a note under 8 U.S.C. § 1153), and 

not under INA § 204, 8 U.S.C. § 1154.

19DHS OIG, Investigation into Employee Complaints about Management of U.S. 

Citizenship and Immigration Services’ EB-5 Program, (Washington, D.C.: Mar. 24. 2015). 

20Jeh C. Johnson, “Statement by Secretary Jeh C. Johnson about the DHS Inspector 

General’s Report Concerning Deputy Secretary Mayorkas”, accessed August 3, 2015, 

http://www.dhs.gov/news/2015/03/24/statement-secretary-jeh-c-johnson-about-dhsinspector-generals-report-concerning-0. 
Page 8 GAO-15-696 Immigrant Investor Program

• To what extent has USCIS implemented efforts to address any 

identified fraud risks in the EB-5 Program?

• To what extent has USCIS increased its capacity to verify job creation 

and used valid and reliable methodologies for reporting program 

outcomes and overall economic benefits?

To determine the extent to which USCIS and its interagency partners 

have assessed fraud risks in the EB-5 Program and what risks they have 

identified, we examined past audit findings by GAO and DHS OIG, and 

reviewed fraud risk assessments conducted by DHS, USCIS, State, SEC, 

FBI, and ICE HSI.21 We interviewed USCIS, SEC, FBI, and ICE HSI 

headquarters officials and analyzed USCIS processes, procedures, and 

training for detecting, preventing, and investigating fraud and compared 

them against standards in Standards for Internal Control in the Federal 

Government, GAO’s Fraud Risk Management Framework, and GAO’s 

Strategies to Manage Improper Payments.

22

 

21

To gain the perspective of 

Regional Center Program participants on the types and prevalence of 

fraud in the program, we also interviewed the principals of two regional 

centers located in proximity to USCIS headquarters and the USCIS 

California Service Center, which we visited because it was primarily 

responsible for administering the EB-5 Program prior to the program’s 

transfer to USCIS headquarters’ new Immigrant Investor Program Office. 

We also interviewed officials about fraud risks in the EB-5 Program from a 

national industry association representing EB-5 Program regional centers 

and a national immigration lawyers association in Washington, D.C., as 

well as SEC and ICE officials in California during our site visit to the 

USCIS California Service Center. Although the information from these 

interviews and the site visit is not representative of all EB-5 industry

stakeholders’ perspectives, they provided insights into the fraud risks and 

vulnerabilities of the program. We also reviewed a nonprobability sample 

of 28 EB-5 Program files for immigrant investors and regional centers 

USCIS approved to participate in the program to identify any potential 

GAO-05-256 and OIG-14-19.

22GAO, Standards for Internal Control in the Federal Government, GAO/AIMD-00-21.3.1

(Washington, D.C.: November 1999); Individual Disaster Assistance Programs; 

Framework for Fraud Prevention, Detection, and Prosecution, GAO-06-954T (Washington, 

D.C.: July 12, 2006); and Strategies to Manage Improper Payments: Learning from Public 

and Private Sector Organizations, GAO-02-69G (Washington, D.C.: Oct. 1, 2001). As 

stated in GAO-02-69G, while the guide focuses on internal controls as they relate to 

reducing improper payments, the internal control components discussed are applicable to 

the entirety of an organization’s operations, including efforts to manage fraud risks. 
Page 9 GAO-15-696 Immigrant Investor Program

fraud indicators and review internal controls. While the files we reviewed 

are not representative of all completed and approved applications and 

petitions, they did provide us with information about different immigrant 

investor and regional center circumstances.

To determine the extent to which USCIS has implemented efforts to 

address any identified fraud risks in the EB-5 Program, we examined 

agency action to address past DHS OIG and ICE HSI risk assessment 

findings and evaluated the information systems and standard operating 

procedures that USCIS adjudicators use for evaluating EB-5 petitions and 

applications and that FDNS officials use for identifying, preventing, and 

addressing fraud risks. We also evaluated USCIS’s internal quality 

assurance capabilities as well as its records management and data 

storage capabilities. To gain perspective on how EB-5 Program 

processes have changed over time to address fraud risks, during our site 

visit to the USCIS California Service Center, we interviewed six officials 

who formerly adjudicated EB-5 Program petitions and applications. We 

also interviewed a nonprobability sample of 16 current adjudicators and 8 

economists in IPO to identify efforts taken to identify and address fraud in 

the program. We selected the adjudicators and economists based on 

factors such as length of employment with USCIS, grade level, and the 

type of EB-5 Program forms they adjudicate. While the adjudicators and 

economists we interviewed are not representative of all EB-5 adjudicators 

and economists, from the interviews we were able to gain insights into 

USCIS’s efforts to identify and address fraud, among other aspects of EB5 Program adjudication. We also interviewed FDNS and IPO supervisory 

officials to identify specific corrective actions USCIS has taken or plans to 

take to address fraud risks in the program. We compared the results with 

standards identified in Standards for Internal Controls in the Federal 

Government and GAO’s Fraud Framework, which have established 

requirements and identified leading practices for addressing fraud risks.23

To determine the extent to which USCIS has increased its capacity to 

verify job creation and uses valid and reliable methodologies to report 

program outcomes and overall economic benefit, (1) we assessed the 

changes in USCIS workforce, guidance, training, and the petition 

adjudication process to address past audit findings reported by GAO and 

the DHS OIG; (2) reviewed the methodology used by USCIS to report the 

 

23 GAO/AIMD-00-21.3.1 and GAO-06-954T. 
Page 10 GAO-15-696 Immigrant Investor Program

total amount of investment and number of jobs created through the 

program; and (3) reviewed the statement of work for a contracted study 

on the program’s economic impact. We interviewed IPO management as 

well as a nonprobability sample of 24 adjudicators, including 8 

economists chosen for the reasons previously discussed, about their 

views on the adequacy of the guidance and training provided by USCIS, 

and their access to the data and information they needed to verify job 

creation reported by immigrant investor petitioners and regional center 

applicants. The views of these adjudicators and economists cannot be 

generalized to all USCIS adjudicators and economists, but provided us 

with insights into the quality of the guidance and training on verifying job 

creation estimates. For the process USCIS used to adjudicate immigrant 

investor petitions associated with regional center projects, we also 

reviewed economic models used by immigrant investors and USCIS to 

estimate the number of jobs to be created by the project when petitioning 

to participate in the program as well as other methods for verifying the 

number of jobs created when a petitioner seeks to remove the conditional 

basis of his or her green card. To assess the models, we reviewed the 

underlying economic assumptions and data as well as past studies and 

audits identifying limitations in use of the models for the EB-5 Program.24

We also interviewed subject matter experts to include academic 

researchers in urban and economic development, a policy research think 

tank, a state economic development agency, and Department of 

Commerce (Commerce) officials responsible for administering the 

Regional Input-Output Modeling System (RIMS II model). This system is 

widely used across the private and public sectors, including USCIS, and 

is considered to be among those valid for verifying job creation estimates 

reported by program participants within regional centers.25

 

24ICF International, Study of the United States Immigrant Investor Pilot Program (EB-5)

(May 18, 2010). IIUSA (Association to Invest in USA), Economic Impact of the EB-5 

Immigrant Program 2012 (January 27, 2014). Bureau of Economic Analysis (Department 

of Commerce), RIMS II: An Essential Tool for Regional Developers and Planners

(December 2013). Dan S Rickman and R Keith Schwer, “A Comparison of the Multipliers 

of IMPLAN, REMI, and RIMS II: Benchmarking Ready-Made Models for Comparison,” The 

Annals of Regional Science, vol. 29 (1995), 363-374. We reviewed the reports’ 

methodologies and discussed the reports with USCIS. We determined that the 

conclusions in these reports were reasonable for use in our report, and we discuss 

limitations of these reports later in our report.

We selected 

these experts to interview because they have reviewed various aspects of 

25RIMS II is used to estimate the impact of changes in spending, such as increased 

investment, on economic activity (including job creation) in a region of the country.
Page 11 GAO-15-696 Immigrant Investor Program

the program, written published articles, or have a role in the EB-5 

Program.

To determine the extent to which USCIS’s methodology for reporting 

program outcomes is valid and reliable, we compared how USCIS 

compiles numbers for total jobs created by the EB-5 Program and the 

dollar amount of EB-5 Program investments against the information 

included in EB-5 Program petitions and verified by USCIS throughout the 

adjudication process. We compared USCIS’s methodology against 

guidance in GAO’s Standards for Internal Control in the Federal 

Government and requirements in the Project Management Institute’s The 

Standard for Program Management for programs to establish monitoring 

and controlling activities to report on program performance.26 In regard to 

USCIS’s plans to fund a contracted study reporting on the overall 

economic impact of the EB-5 Program, we also interviewed USCIS 

officials as well as officials at Commerce with whom USCIS has 

established a memorandum of agreement to study the program’s 

economic impact, to identify the study methodology and data inputs. We 

compared the planned methodology for this study against Office of 

Management and Budget (OMB) Circular A-94, Guidelines and Discount 

Rates for Benefit-Cost Analysis of Federal Programs, which applies to all 

analyses used to support government decisions to initiate, renew, or 

expand programs or projects that would result in a series of measurable 

benefits or cost.27

We conducted this performance audit from October 2014 through August

2015 in accordance with generally accepted government auditing 

standards. Those standards require that we plan and perform the audit to 

obtain sufficient, appropriate evidence to provide a reasonable basis for 

our findings and conclusions based on our audit objectives. We believe 

that the evidence obtained provides a reasonable basis for our findings 

and conclusions based on our audit objectives.

 

26Project Management Institute, The Standard for Program Management, third edition 

(Newtown Square, Pa.: 2013).

27OMB Circular No. A-94 Revised, Guidelines and Discount Rates for Benefit-Cost 

Analysis of Federal Programs (Oct. 29, 1992).
Page 12 GAO-15-696 Immigrant Investor Program

Individuals seeking to establish a regional center under the EB-5 Program 

must submit an initial application and supporting documentation as well 

as an update for each fiscal year (or as otherwise requested by USCIS)

showing that the regional center continues to meet the program 

requirements to maintain its regional center designation.28 Prospective 

regional center sponsors apply to the program by submitting Form I-924, 

Application for Regional Center under the Immigrant Investor Pilot 

Program. On this form, applicants are to provide a proposal, supported by 

economically or statistically valid forecasting tools, that describes, among 

other things, how the regional center (1) focuses on a geographic area of 

the United States; (2) will promote economic growth through increased 

export sales and improved regional productivity, job creation, and 

increased domestic capital investment; and (3) investors will create jobs 

directly or indirectly. Applicants must also include a detailed statement 

regarding the amount and source of capital committed to the regional 

center, as well as a description of the promotional efforts they have taken 

and planned. Once a regional center has been approved to participate in 

the program, a designated representative of the regional center must file 

a Form I-924A, Supplement to Form I-924, for each fiscal year, to provide 

USCIS with updated information demonstrating that the regional center 

continues to promote economic growth, improved regional productivity, 

job creation, or increased domestic capital investment in the approved 

geographic area. USCIS is to issue a notice of intent to terminate the 

participation of a regional center if it fails to submit the required 

information or upon a determination that the regional center no longer 

serves the purpose of promoting economic growth.29

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 

As of July 2015, 

USCIS had approved approximately 689 regional centers spread across 

49 states, the District of Columbia, and 4 U.S. territories; and USCIS 

terminated the participation of 34 regional centers for not filing a Form I924A or not promoting economic growth.

 

28See 8 C.F.R. § 204.6(m)(3) (Requirements for regional centers), (6) (Termination of 

participation of regional centers). 

29See 8 C.F.R. § 204.6(m)(6).

Background
Page 13 GAO-15-696 Immigrant Investor Program

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. (See fig. 1.)
Page 14 GAO-15-696 Immigrant Investor Program

Figure 1: U.S. Citizenship and Immigration Services’ (USCIS) Immigrant Investor Program Investor Petition and Application 

Process

a

USCIS adjudicators may request additional supporting documents, if needed. See 8 C.F.R. § 

103.2(b)(8).

b

If the immigrant investor’s Form I-526 petition is denied, the investor may appeal, or file a motion to 

reopen or reconsider the unfavorable decision by filing Form I-290B, Notice of Appeal or Motion, in 

accordance with Form I-290B filing instructions. See 8 C.F.R. §§ 103.3, 103.5. The appeal of an 
Page 15 GAO-15-696 Immigrant Investor Program

unfavorable decision on a Form I-526 petition is forwarded to the Administrative Appeals Office at 

USCIS headquarters for review. Administrative Appeals Office adjudicators use the same criteria 

when reviewing immigrant investor petitions as those used by Immigrant Investor Program Office 

(IPO) adjudicators. The Administrative Appeals Office unit may approve, deny, or remand the case to 

the IPO, or reject the appeal as filed improperly, for example, where the appeal is untimely. If the 

appeal is denied, there are no further administrative appeal rights within USCIS. The only remaining 

appeal option for the immigrant investor is through the U.S. court system. If the appeal is remanded, 

the Administrative Appeals Office directs the IPO to review the case again consistent with its 

decision. The remanded case would be reviewed again following the same procedures as if it had 

been initially received.

c

If an alien entrepreneur does not timely file a petition to remove the conditional basis of permanent 

residence, his or her conditional permanent resident status automatically terminates and removal 

proceedings are to be initiated. See 8 C.F.R. § 216.6(a)(5).

d

Consular officers may return the I-526 petition to USCIS, in which case USCIS may commence 

revocation proceedings pursuant to 8 U.S.C. § 1155; 8 C.F.R. § 205.2; and where approval of the 

petition is revoked, the immigrant investor may appeal to the Administrative Appeals Office. With 

respect to USCIS’s denial of a Form I-485 application, the immigrant investor may file a motion to 

reopen or reconsider the decision. See 8 C.F.R. § 103.5.

e

According to 8 C.F.R. § 216.6(d)(2), denial of a Form I-829 petition may not be appealed; however, 

the alien may file a motion to reopen or reconsider the decision by filing a Form I-290B, Notice of 

Appeal or Motion, or seek review of the decision in removal proceedings. See 8 C.F.R. §§ 103.5, 

216.6(d)(2).

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.30 An internal memo 

discussing this effort also highlighted steps that USCIS was undertaking 

to mitigate fraud risks to the program, such as improving collaboration 

with law enforcement agencies such as SEC and FBI. In response to this 

assessment, later in 2012, USCIS worked with FBI and the Department of 

the Treasury’s Financial Crimes Enforcement Network (FinCEN),31

 

30The stakeholders included DHS components such as ICE; U.S. Customs and Border 

Protection; the Office of Intelligence and Analysis; and DHS Office of Policy; the 

Departments of Justice, the Treasury, State, and Commerce; the Office of Director of 

National Intelligence; and SEC. On February 10, 2014, the National Security Staff name 

was changed to the National Security Council staff by executive order. See Exec. Order 

No. 13657, 79 Fed. Reg. 8823 (Feb. 10, 2014).

among others, to better understand the scope of EB-5 Program fraud 

risks and to assess the benefits of incorporating enhanced security 

screenings to improve its vetting of EB-5 Program petitioners. FDNS 

officials told us that one key determination of the study was the need to 

31FinCEN is a bureau within the Department of the Treasury that, among other things, is 

tasked with safeguarding the U.S. financial system from money laundering, terrorist 

financing, and other abuses. 

USCIS and Others 

Have Identified 

Unique Fraud Risks 

to the EB-5 Program 

and Could Benefit 

from Planning and 

Conducting Regular 

Future Risk 

Assessments
Page 16 GAO-15-696 Immigrant Investor Program

provide dedicated fraud personnel to the EB-5 Program, which, as 

discussed later, USCIS implemented. Most recently, in early 2015, DHS’s 

Office of Intelligence and Analysis prepared a classified report updating 

the program’s 2012 risk assessment, in response to congressional and 

USCIS requests, which assessed the fraud risks to the EB-5 Program.

In addition to conducting these risk assessments, USCIS officials told us 

that they identify potential fraud stemming from the EB-5 Program 

through regular oversight work such as producing reports on investors’ 

sources of funds. Additionally, law enforcement agencies such as ICE 

HSI, SEC, and FBI may also uncover fraud through their own 

investigative efforts and, as appropriate, will share this information with 

USCIS.

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. Further, FDNS officials stated that the office constantly identifies 

new fraud schemes, and that they must work to stay on top of emerging 

issues. SEC training materials for EB-5 Program staff on securities fraud 

also stated that fraud scams are creative and constantly changing, and 

may make use of new distribution channels such as social media. 

Moreover, as noted previously, the program has grown substantially over 

time—the total number of EB-5 visas issued increased from almost 3,000 

in fiscal year 2011 to over 9,000 in fiscal year 2014, according to State 

data; this creates additional opportunities for fraud.

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 USCIS does 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. 

Standards for Internal Control in the Federal Government provides 

guidance on the importance of identifying and analyzing risks, and using 

that information to make decisions.32

 

32

These standards address various 

aspects of internal control that should be continuous, built-in components 

of organizational operations. One internal control standard, risk 

GAO/AIMD-00-21.3.1. 
Page 17 GAO-15-696 Immigrant Investor Program

assessment, calls for identifying and analyzing risks that agencies face 

from internal and external sources and deciding what actions should be 

taken to manage these risks. The standards indicate that conditions 

governing risk continually change and mechanisms are required to 

ensure that risk information, such as vulnerabilities in the program, 

remains current and relevant. Such mechanisms could include periodic 

risk assessment updates. Moreover, our executive guide for helping 

agencies identify effective strategies to manage improper payments notes 

the importance of periodically updating risk assessments because of 

constant changes in governmental, economic, industry, regulatory, and 

operating conditions that can affect program risks in their programs.33

Information collected through periodic reviews, as well as daily 

operations, can inform the analysis and assessment of risk. Furthermore, 

DHS’s Risk Management Fundamentals states that DHS and its 

component agencies should use a risk-based approach when managing 

programs that includes, among other things, identifying potential risks, 

assessing and analyzing identified risks, and using risk information and 

analysis to inform decision making.34

The risk assessments conducted by USCIS and others, as well as our 

interviews with USCIS, ICE HSI, FBI, and SEC officials, identified ongoing 

and changing fraud risks to the EB-5 Program. According to the risk 

assessments and FDNS officials, the EB-5 Program possesses several 

unique risks that are generally not present in other types of immigration 

programs. Specifically, a senior FDNS official noted that while 

adjudication of petitions in the EB-5 Program, like other immigration 

programs, centers on the eligibility of the petitioner, the EB-5 Program 

also has an investment component that creates increased program 

complexity and the potential for fraud risks. The program’s risk 

assessments, FDNS officials, and stakeholders from agencies that play a 

Planned regular or updated future 

risk assessments could help better position USCIS to identify, evaluate, 

and address fraud risks given the potential for changing conditions.

 

33GAO-02-69G. While Strategies to Manage Improper Payments focuses on internal 

controls as they relate to reducing improper payments, the guide states that the internal 

control components discussed are applicable to the entirety of an organization’s 

operations, including efforts to manage fraud risks.

34Department of Homeland Security, Risk Management Fundamentals: Homeland 

Security Risk Management Doctrine (Washington, D.C.: April 2011). 
Page 18 GAO-15-696 Immigrant Investor Program

role in addressing potential fraud identified unique fraud risks that involve 

the following aspects of the EB-5 Program:35

Uncertain source of immigrant investor funds. USCIS’s 2012 risk 

assessment identified the source of EB-5 petitioner funds as an area at 

risk for fraud. To be eligible for the EB-5 Program, immigrant investors 

must invest a minimum of $1 million, or $500,000 in a targeted 

employment area, in a new commercial enterprise, and must provide 

documentation showing that these funds come from a lawful source.36

This investment is not a feature in most other immigration programs and, 

as a consequence, it creates unique risks in the EB-5 Program.37

 

35Because of the sensitive nature of this information, we do not discuss national security 

concerns such as threats from terrorism or espionage in this report. 

When 

submitting their petitions, immigrant investors are required to submit 

evidence that the investment funds were obtained through lawful means 

such as foreign business registration records or tax returns. As part of its 

adjudication process, and as required by regulation, program staff review 

the evidence submitted by immigrant investors to make a determination 

on the lawfulness of their source of funds. However, according to USCIS 

officials, it can be difficult to verify the sources of immigrant investors’ 

funds and such verification difficulties could pose fraud risks to the 

program. For example, USCIS officials told us that some petitioners may 

have strong incentives to report inaccurate information about the source 

of their funds on their applications in instances when the funds come from 

illicit—and thus ineligible—sources, such as funds obtained through drug 

trade, human trafficking, or other criminal activities. Moreover, FDNS 

selected a targeted sample of about 150 high-risk petitions referred by 

36See 8 C.F.R. § 204.6(e), (f), (g)(1), (j); 8 C.F.R. § 216.6(c)(2). In the Senate Judiciary 

Committee report accompanying the Immigration Act of 1990, it is stated that “the 

committee intends that processing of an individual visa not continue under this section if it 

becomes known to the Government that the money invested was obtained by the alien 

through other than legal means (such as money received through the sale of illegal 

drugs).” S. Rep. No. 101-55, at 21. This committee report was cited as a basis for 

changing the definition of capital to exclude assets directly or indirectly acquired by 

unlawful means. See 56 Fed. Reg. at 60,902.

37EB-5 is not the only immigration program with an investment feature. The nonimmigrant 

treaty investor (E-2) visa category also has an investment feature. See 8 U.S.C. § 

1101(a)(15)(E); 8 C.F.R. § 214.2(e).

Unlawful Source of Petitioner Funds

As one example, Fraud Detection and 

National Security (FDNS) Directorate officials 

told us about a case in which a petitioner did 

not report potential financial ties to a number 

of brothels in China, which would have raised 

questions about the legitimacy of the 

petitioner’s source of funds. FDNS’s fraud 

detection efforts ultimately identified this 

connection and the U.S. Citizenship and 

Immigration Services (USCIS) denied the 

petition. 

Source: FDNS officials. | GAO-15-696
Page 19 GAO-15-696 Immigrant Investor Program

EB-5 Program adjudicators to FDNS for fraud concerns.38

Legitimacy of investment entity. The amount of investment required to 

participate in the EB-5 Program, coupled with the fact that EB-5 investors 

are making an investment in order to obtain an immigration benefit, can 

create fraud risks tied to unscrupulous regional center operators and 

intermediaries. According to SEC officials, they have identified instances 

of fraudulent investment schemes, including securities fraud, related to 

EB-5 investments. From January 2013 through January 2015, SEC 

officials reported receiving over 100 tips, complaints, and referrals related 

to possible securities fraud violations and the EB-5 Program. Just over 

As of May 

2015, on the basis of detailed reviews by FDNS staff located in 

headquarters and overseas, FDNS determined that the sources of funds 

in many of these petitions contained a high risk for fraud. In addition, ICE 

HSI headquarters officials provided us with cases of immigrant investors 

using overseas preparers to submit counterfeit documentation to 

fraudulently show that funds were lawfully obtained, which can make 

determining the legitimacy of the source of funds challenging. Further, 

ICE HSI officials stated that they are concerned that overseas document 

preparers and recruiters may try to use increasingly sophisticated 

methods to circumvent program controls. USCIS officials said that IPO 

and FDNS did not have a means to verify self-reported immigrant 

financial information with many foreign banks. In addition, both USCIS 

and State officials noted that they did not have authority to verify banking 

information with many foreign countries. For example, State officials said 

that because the U.S. government lacks access to many foreign financial 

systems, there is no reliable method to verify the source of the funds of 

petitioners.

 

38According to FDNS officials, FDNS EB-5 randomly sampled all immigrant investor I-526 

filings in its pending inventory from a subset of preparers known to have submitted 

fraudulent documents related to the source of funds for the petitioners. The sampling 

methodology included an expected response distribution of 50 percent, a confidence level 

of 80 percent, and an acceptable margin of error of 5 percent.

Securities Fraud in the EB-5 Program

In 2014, various companies associated with 

the construction of the Chicago Convention 

Center were found liable for the fraudulent 

sale of over $145 million in securities to 

Chinese investors seeking a pathway to 

citizenship in the United States. Using the 

Regional Center Model, each investor was 

told to wire a minimum of $500,000, along 

with an administrative fee of $41,500, to a 

U.S. bank account in exchange for a 

provisional visa obtained by providing falsified 

documents to the U.S. Citizenship and 

Immigration Services (USCIS). Defendants 

collected over $11 million in administrative 

fees, which were spent despite knowledge 

that the project would not be completed.

According to another 2013 Securities and 

Exchange Commission (SEC) complaint, a 

couple created a regional center and solicited 

immigrant investors with promises of 

investing in a local energy company. Instead 

of investing in that project, the couple used 

investor funds to (1) buy cars for themselves 

and regional center employees, (2) make 

Ponzi payments to an existing investor, (3) 

settle an existing lawsuit, and (4) invest in a 

financially troubled restaurant. 

Source: GAO analysis of SEC documents. | GAO-15-696
Page 20 GAO-15-696 Immigrant Investor Program

half of these tips, complaints, and referrals resulted in further investigation 

by SEC staff or were referred to other state, local, or federal law 

enforcement agencies for further review.39 According to an SEC official, 

as of July 2015, SEC has initiated four civil enforcement actions alleging 

securities law violations by EB-5 Program participants.40 Moreover, 

according to FDNS documentation, as of May 2015, over half (35) of the 

59 open investigations tracked by the program primarily involved 

securities fraud issues.41

 

39According to SEC officials, all EB-5 tips, complaints, and referrals are preserved in an 

SEC database for future consideration in conjunction with any additional information or 

related materials that may be received by SEC.

In addition, SEC officials noted that immigrant 

investors may be vulnerable to fraud schemes because they may be 

primarily focused on obtaining their visas. SEC officials noted that, 

anecdotally, immigrant investors often accepted lower rates of return on 

their investment relative to other non-EB-5 Program investors in the same 

project as well as non-EB-5 Program investment opportunities. A 2015 

academic study reported that EB-5 Program loans bear a lower overall 

interest rate than conventional loans because the immigrant investors are 

40See SEC v. A Chicago Convention Center, LLC, Case No. 1:13-cv-982 (N.D. Ill. Filed 

Feb. 6, 2013) (Intercontinental Regional Center Trust of Chicago); SEC v. Ramirez, Case 

No. 7:13-cv-00531 (S.D. Tx. Filed Sept. 30, 2013) (USA Now Regional Center); SEC v. 

Lee, Case No. 2:14-cv-06865 (C.D. Cal. Filed Sept. 3, 2014) (Kansas Biofuel Regional 

Center LLC). All three complaints alleged violations of 15 U.S.C. §§ 77q(a) (use of 

interstate commerce for purpose of fraud or deceit), 78j(b) (use of manipulative or 

deceptive device or contrivance in violation of SEC rules and regulations); and Rule 10b5, 17 C.F.R. § 240.10b-5 (employment of manipulative and deceptive devices). According 

to USCIS’s public list of terminated regional centers, USCIS has terminated the 

participation of the regional centers involved in the above-mentioned SEC civil 

enforcement actions. In July 2015, SEC initiated another EB-5-related civil enforcement 

action alleging that defendants ran a Ponzi-like scheme and affinity fraud targeting, among 

others, Chinese citizens seeking to obtain permanent residence under the EB-5 Program. 

See SEC v. Luca Int’l Group, LLC, et al., Case No. 3:15-cv-03101 (N.D. Cal. Filed July 6, 

2015). Additionally, in June 2015, SEC instituted administrative and cease-and-desist 

proceedings and imposed sanctions on respondents who, according to SEC, acted as 

unregistered broker-dealers in connection with the sales of securities involving the EB-5 

Program. See In the Matter of Ireeco, LLC & Ireeco Ltd., Release No. 75268, Admin. 

Proceeding File No. 3-16647 (SEC June 23, 2015).

41The investigations include those performed by law enforcement agencies such as SEC, 

FBI, and ICE. The remaining investigations related to other criminal activities such as 

money laundering as well as national security concerns and immigration fraud.
Page 21 GAO-15-696 Immigrant Investor Program

motivated by the visa rather than the maximization of financial returns.42

Appearance of favoritism and special access. The DHS OIG reported 

in March 2015 that a previous USCIS director had created an appearance 

of favoritism by providing certain petitioners and stakeholders with special 

access to DHS leadership and preferential treatment for their EB-5 

Program applications or petitions.

SEC officials said that investors sometimes did not exercise due diligence 

about their investment decisions, thus increasing the likelihood that

immigrant investors could be taken advantage of by unscrupulous 

regional centers through fraud schemes or by being steered toward poor 

investments. Moreover, SEC officials told us that the U.S. government is 

limited in its ability to investigate foreign-based sales and marketing 

practices of EB-5 Program investment opportunities and that unrealistic or 

patently false promises are sometimes made to investors. For example, 

SEC cases have uncovered incidents of regional center principals 

defrauding prospective immigrant investors by misrepresenting the 

business investment. Additionally, USCIS and ICE HSI officials all 

reported that it can be difficult to verify whether funds are being invested 

in projects and commercial enterprises as reported in immigrant investor 

petitions and regional center applications and immigrant investors may 

also be involved in schemes to fraudulently portray job creation or 

economic activity. For example, ICE HSI officials reported on a 2014 

investigation related to a business enterprise that did not provide 

employees any work and told the employees to sit in an office during 

business hours. In another example cited by ICE HSI, in 2013, an alleged 

future EB-5 Program hotel project site was actually a vacant lot; the 

owner of the location was not aware of any plans to build a hotel there.

43

 

42Professor Jeanne Calderon and Guest Lecturer Gary Friedland, Esq., A Roadmap to the 

Use of EB-5 Capital: An Alternative Financing Tool for Commercial Real Estate Projects

(New York University: Stern School for Business Center for Real Estate Finance 

Research. May 22, 2015). 

The OIG report also stated that 

according to USCIS whistleblower allegations, which the OIG 

corroborated in some cases, the former director created special 

processes and revised existing policies in the EB-5 Program to 

accommodate specific parties. According to the OIG, if not for the 

intervention of the then director, the career staff at USCIS would have 

decided adjudication matters differently. According to the OIG report, 

43DHS OIG, Investigation into Employee Complaints about Management of U.S. 

Citizenship and Immigration Services’ EB-5 Program. 
Page 22 GAO-15-696 Immigrant Investor Program

some USCIS employees felt uncomfortable and pressured to comply with 

managers’ instructions that appeared to have come from the former 

director or those working directly for him. Not consistently following 

standard processes designed to identify potential fraud and other risks in 

adjudicating applications can increase the likelihood that those with 

criminal ties or those making fraudulent investments will go unnoticed. It 

may also create a control environment tolerant of not adhering to risk 

mitigation processes and could reduce trust and transparency in the 

overall adjudication process. Although the OIG report did not make 

specific recommendations, following its issuance, the DHS Secretary 

expressed further concerns about the program and asked Congress for 

help to strengthen the security and integrity of the program, stating that 

the EB-5 Program was frequently contacted by outsiders on behalf of 

those with an interest in the outcome of a particular EB-5 Program case. 

The DHS Secretary also announced the creation of a new protocol to help 

prevent the reality or perception of improper outside influence in the EB-5 

Program. As of June 2015, USCIS officials had developed the protocol 

and anticipate that it will be fully implemented by August 2015. 

Given these identified fraud risks, and the constantly evolving nature of 

risks to the program, planning and conducting regular fraud risk 

assessments of the EB-5 Program could better position USCIS to identify 

and evaluate emerging fraud risks to the program and address and 

mitigate these risks.
Page 23 GAO-15-696 Immigrant Investor Program

USCIS has taken some steps to enhance its fraud risk management 

efforts, including creating an organizational structure conducive to fraud 

risk management, establishing a dedicated entity to design and oversee 

its fraud risk management activities, conducting fraud awareness training, 

and establishing collaborative relationships with external stakeholders, 

including law enforcement agencies.

USCIS established an organizational structure to better address 

fraud risks. In 2013, USCIS restructured the organization of its EB-5 

Program operations to help better detect fraud, moving EB-5 Program 

activities from its California Service Center office and centralizing these 

operations in USCIS headquarters’ new Immigrant Investor Program 

Office in Washington, D.C. As of June 2015, nearly all EB-5 adjudication 

operations are now colocated in Washington, D.C., with the exception of 

adjudication for Form I-485 applications from immigrant investors who are 

already in the United States under other lawful immigration status and 

who are applying to adjust their status to conditional permanent residency 

under the EB-5 visa category. USCIS officials indicated they plan to move 

adjudication of the Form I-485 applications from the California Service 

Center to the National Benefits Center in Lee’s Summit, Missouri, by the 

end of 2015. These officials stated that because USCIS is primarily 

paper-driven, colocation also allows for relatively more efficient handling 

and examination of files for fraud and other risks. In November 2013, 

USCIS also established a fraud specialist unit for the EB-5 Program 

within FDNS. FDNS officials said that they increased the number of fraud 

specialists and hired individuals with specialized skill sets in areas that 

they consider critical to fraud prevention, including economics, finance, 

immigration, and national security, as well as relevant language skills. As 

of May 2015, FDNS was in the process of hiring an additional 8 dedicated 

staff with specialized fraud expertise to enhance its EB-5 Program fraud 

USCIS Has Taken 

Some Steps to 

Address Fraud Risks,

but Additional 

Controls Could 

Improve Fraud 

Prevention and 

Detection

USCIS Has Taken Some 

Steps to Enhance Its 

Fraud Risk Management 

Efforts
Page 24 GAO-15-696 Immigrant Investor Program

detection capabilities and oversight, which will bring the total authorized 

FDNS EB-5 staff from 13 to 21.

USCIS established fraud awareness training. GAO’s fraud control 

framework states that providing training on fraud awareness and potential 

fraud schemes to all key government staff is important in stopping fraud.44

FDNS’s training of its employees includes specialized fraud training. For 

instance, as of May 2015, FDNS had sent 8 of its 12 staff to Federal Law 

Enforcement Training Centers for specific training on detecting money 

laundering following an introductory course provided in headquarters in 

May 2014.45

USCIS took steps to improve law enforcement collaboration. USCIS 

took steps to improve its level of coordination related to EB-5 fraud risk 

with SEC, ICE HSI, and FBI. USCIS does not generally conduct 

enforcement actions and therefore coordinates with, and also makes 

referrals to, law enforcement when it detects potential fraud, criminal 

activity, or national security threats. According to SEC, ICE HSI, FBI, and 

USCIS officials, USCIS has increased its level of coordination with law 

enforcement agencies to cross-train staff with additional expertise. For 

example, in September 2014 USCIS held an interagency symposium to 

encourage collaboration among the government partners that have a 

stake in the EB-5 Program. These officials also said that USCIS has 

established more reliable avenues of communication among the 

agencies, which has led to increased communication and collaboration on 

referrals, investigations, and enforcement actions that can be taken when 

potential threats and fraud are detected in the EB-5 Program. As of May 

2015, USCIS was also finalizing a memorandum of understanding with 

the Department of the Treasury’s FinCEN to improve USCIS’s ease of 

access to information related to financial fraud and related criminal 

FDNS has also developed an “EB-5 University” to provide 

staff with monthly presentations on specific fraud-related topics believed 

to be immediately relevant to adjudication of EB-5 Program petitions and 

applications. USCIS held six sessions from August 2014 through January 

2015, each of which addressed a different issue, including an overview of 

FinCEN and the use of external agency data for investigating potential 

fraud.

 

44GAO-06-954T. 

45FDNS currently has 21 authorized positions; the office had 12 employees onboard as of 

May 2015.
Page 25 GAO-15-696 Immigrant Investor Program

activity. Moreover, since consolidating operations in Washington, D.C., 

USCIS officials stated that they have expanded the scope of their 

background checks to include a greater number of individuals associated 

with EB-5 investments and have increased the number of databases used 

to examine individuals considered high risk.46 These officials said that 

they are currently working with stakeholders to further enhance and 

automate checks across law enforcement databases.

USCIS faces significant challenges in its efforts to detect and mitigate 

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. While improvements to USCIS information 

systems are delayed, USCIS has taken alternative steps to gather 

information to mitigate fraud risk, such as expanding its site visits 

program to include random checks of the operation of EB-5 Program 

projects. However, opportunities remain to expand information collection 

through interviews with immigrant investors and expanded EB-5 Program 

petition and application forms.

Limitations in electronic data on EB-5 Program regional center 

applicants and immigrant investors. USCIS relies heavily on paperbased documentation. While USCIS contractors and employees are to 

enter certain information from these paper documents into various 

electronic databases, these databases have limitations that reduce their 

usefulness for conducting fraud-mitigating activities. 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-

 

46USCIS conducts checks primarily using the TECS system, which is a database owned 

and operated by U.S. Customs and Border Protection that includes information such as 

temporary and permanent enforcement, inspection, and operational records relevant to 

the antiterrorism and law enforcement mission of the federal agencies that the TECS 

system supports. USCIS also uses several commercial databases managed by 

companies such as Dun and Bradstreet and LexisNexis, which contain global information 

about individuals and entities used for screening. 

Limitations in USCIS’s 

Information Collection and 

Use Hamper Its Ability to 

Detect and Mitigate Fraud 

Risks
Page 26 GAO-15-696 Immigrant Investor Program

924 used to apply for regional center participation in the EB-5 Program.47

USCIS officials stated that the agency will be able to collect and maintain 

more readily available data on EB-5 Program petitioners and applicants 

through the deployment of electronic forms in its new system, the 

Electronic Immigration System (USCIS ELIS). USCIS officials told us in 

May 2015 that they expect USCIS ELIS capabilities for the EB-5 Program 

to become functional in 2017. However, USCIS has faced long-standing 

challenges in implementing USCIS ELIS, a fact that raises questions 

about its eventual deployment and thus the extent to which it will position 

USCIS to collect and maintain more readily available data. As we 

reported in May 2015, USCIS ELIS is nearly 4 years delayed and 

program costs increased by over $1 billion.

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. For example, the “geographic location” field, 

which USCIS personnel use to record where a regional center intends to 

operate, variously contains counties, parishes, cities, states, ZIP codes, 

census tracts, and other abbreviations. USCIS’s rules guiding data entry 

leave many form fields “optional” in USCIS data-systems because, 

according to USCIS officials, the adjudication is completed from the paper 

application forms, so USCIS considers entering these data unnecessary. 

However, including such information in USCIS databases could better 

position USCIS to use information on investors to assess whether any 

potential fraud may exist with individual investors or across the program 

and initiate appropriate mitigating actions. For example, including in 

USCIS databases information on regional center principals and other 

Regional Center Program participants that is not consistently recorded in 

those databases, such as name and date of birth, could help USCIS 

better identify specific individuals who may be targeted for or are under 

investigation. Further, more standardized information in USCIS 

databases, such as for the geographic locations of regional centers, could 

help the agency better identify and assess any potential regional center 

fraud trends, for example, within and across geographic areas.

48

 

47Organizations use data for many different forms of fraud-related prevention and 

detection techniques, the nature of which is dictated by specific questions or concerns 

identified by managers as presenting the most significant concerns. For example, data 

sharing can be particularly useful in confirming initial or continuing eligibility of participants 

in benefit programs. See 

In March 2012, USCIS 

GAO-02-69G. 

48GAO, Immigration Benefits System: Better Informed Decision Making Needed on 

Transformation Program, GAO-15-415 (Washington, D.C.: May 18, 2015).
Page 27 GAO-15-696 Immigrant Investor Program

began to significantly change its acquisition strategy to address various 

technical challenges with the system, and these changes have 

significantly delayed the program’s planned schedule.49 Changes made to 

the program’s acquisition strategy were intended to help mitigate past 

technical and programmatic challenges; however, at the time of our 

review, the plans had not yet been approved and USCIS was operating 

without a current and approved acquisition program baseline. USCIS 

subsequently approved the plans for an acquisition program re-baseline 

in May 2015.50 However, as we reported in May 2015, USCIS’s ability to 

effectively monitor USCIS ELIS program performance and make informed 

decisions about its implementation has been limited because departmentlevel governance and oversight bodies were not using reliable program 

information to inform their program evaluations.51

FDNS’s project site visits are limited in number and scope, but 

FDNS has taken steps to expand them. FDNS presently conducts EB-5 

Program site visits when IPO staff have identified a material concern such 

as indicators that a project is behind schedule or nonexistent and that 

cannot be verified through other means such as database searches or 

While USCIS ELIS is 

under development, other actions could help USCIS mitigate fraud, as 

discussed below.

 

49USCIS disagreed that changes to the acquisition strategy delayed the program and 

added $1 billion to the overall cost, citing changes in the time period covered by each 

program cost estimate. In our response, we maintained that the acquisition program 

baseline approved in May 2015 reflects delays of nearly 4 years and approximately $1 

billion in additional cost when compared against the program’s July 2011 program 

baseline. Our report also documented that cost increases and delays in achieving full 

operational capability were due, in part, to unexpected or greater than expected 

challenges in implementing the program’s new approach. See GAO-15-415. 

50We recommended that USCIS re-baseline cost, schedule, and performance 

expectations for the remainder of the program. DHS fully implemented this 

recommendation. See GAO-15-415. 

51We recommended, among other things, that to improve governance of its technology 

transformation program (which includes USCIS ELIS), DHS should ensure that its 

Acquisition Review Board and Executive Steering Committee are effectively monitoring 

the program’s performance and progress toward a predefined cost and schedule and 

relying on complete and accurate program data to review the performance of the program 

against stated expectations. DHS concurred with these recommendations and identified 

planned actions to address them, including steps to ensure that cost and schedule data 

are presented and evaluated against its Acquisition Program Baseline. See GAO-15-415. 
Page 28 GAO-15-696 Immigrant Investor Program

requests for evidence from the petitioner or applicant.52 FDNS officials

told us that during a site visit, they typically look for evidence to 

corroborate petitioner and applicant information such as loan 

documentation and invoices showing that a business project’s 

management staff use of investment funds is consistent with the 

approved business plan. USCIS, SEC, and ICE HSI officials and 

members of the national industry association representing regional 

centers said that additional site visits could enhance program integrity. In 

one example, USCIS officials stated that an EB-5 Program site visit was 

conducted because three stand-alone businesses claimed they were 

operating at the same address on their EB-5 petition materials. The 

businesses had placards on the door, but the owner of the property did 

not know the petitioners were using the space to run businesses. As a 

result, USCIS rejected these EB-5 Program petitions. GAO’s fraud control 

framework states that inspections and physical validations are important 

tools to help mitigate fraud.53

 

52FDNS standard operating procedures state that during the course of its work, FDNS 

may uncover evidence of criminal misconduct, public safety threats, or national security 

concerns. In those instances, FDNS refers the case to ICE or notifies other government 

agencies as appropriate. If a case is referred to another organization for criminal 

investigation or prosecution and it is declined, FDNS may pursue an administrative 

investigation that may lead to the denial or revocation of a benefit and initiation of removal 

proceedings. An administrative investigation may include additional systems checks, 

telephone inquiries, overseas verifications, field site visits, interviews of witnesses, or 

other research necessary to validate or invalidate the suspicion of fraud. According to this 

document, “the objective of an administrative investigation is to produce information that 

USCIS Adjudications can use to determine an individual’s eligibility for an immigration 

benefit. FDNS performs administrative investigations that are narrowly tailored to verify

relationships that are the basis for the transmission of an immigration benefit as well as to 

identify violations of section 212(a)(6)(C)(i) of the INA and/or other grounds of admissibility 

or removability.” 

Further, according to SEC and ICE HSI

officials, even relatively simple site examinations, limited to a physical 

visit of the investment site, may catch indicators of fraud risk when the 

site is obviously unsuitable for the stated business purpose or when the 

petition or application includes falsified information. According to these 

officials, more comprehensive site examinations are staff intensive but 

sometimes necessary for detecting fraud. ICE HSI officials said that this 

includes cases when a business has not invested in physical property or 

is inactive even though the EB-5 documents show that spending is taking 

place. These more comprehensive examinations include gathering 

53GAO-06-954T. 
Page 29 GAO-15-696 Immigrant Investor Program

sources of information related to the project site such as mortgage 

documents and local city records.

Recognizing the potential benefits of site visits, USCIS plans to expand 

the EB-5 Program site visits, which could enhance fraud detection and 

deterrence. FDNS officials stated that they would like to conduct 

additional scrutiny of cases based on indications of fraud risk, which may 

include site visits; however, because of the EB-5 Program data limitations 

described above, FDNS has been unable to develop risk indicators and 

therefore cannot conduct risk-targeted site visits. However, officials plan 

to pilot random site visits, which may also help to identify and deter fraud. 

According to FDNS officials, USCIS approved their request for EB-5 

Program random site visits in 2015, but they were not granted the staff 

positions required to administer these site visits. As of May 2015, FDNS 

had received authorization to hire 8 additional EB-5 Program staff, a level 

that FDNS officials stated is sufficient to begin administering a random 

site visit program. FDNS requested an expanded site visit budget for 

fiscal year 2016, which is now pending approval. FDNS officials stated 

that if the request is approved, a pilot random site visit program will begin 

sometime in fiscal year 2016. While improvements to USCIS information 

systems are delayed, piloting a random site visit program is a step that 

could provide USCIS valuable information in its efforts to mitigate fraud.

USCIS does not interview immigrant investors seeking removal of 

permanent residency conditions. USCIS is statutorily required to 

conduct interviews of immigrant investors within 90 days after they submit 

the Form I-829 petition to remove conditions on their permanent 

residency.54 However, USCIS also has the statutory authority to waive the 

requirement for such interviews.55

 

54See 8 U.S.C. § 1186b(c)(1)(B) (INA interview requirement), (d)(3) (period for conducting 

interview); 8 C.F.R. § 216.6(a)(3).

As of April 2015, USCIS officials stated 

that USCIS IPO has not conducted an interview at the I-829 stage. 

Conducting interviews at this stage to gather additional corroborating or 

contextual information could help establish whether an immigrant investor 

is a victim of or complicit in fraud—a concern shared by both ICE HSI and 

SEC officials, who noted that gathering additional information and context 

about individual investors could help to inform investigative work. For 

example, interviews could present an opportunity to gather additional 

55See 8 U.S.C. § 1186b(d)(3) (discretionary waiver authority); 8 C.F.R. § 216.6(b)(1).
Page 30 GAO-15-696 Immigrant Investor Program

information on the extent to which the initial investment proposal offered 

to potential immigrant investors differed from the actual investments 

made and interest returned on investments. Further, these interviews 

could gather additional information from immigrant investors in cases 

where their associated regional center or commercial enterprise is 

suspected of fraud, such as whether investors were asked to recruit other 

investors as a condition of receiving a return on their investment. Thus, 

USCIS’s use of its authority to conduct interviews under the program 

could help collect information that would otherwise be difficult to obtain 

from investors. USCIS officials agreed that conducting interviews at this 

stage could be a source of relevant information and said they anticipate 

conducting these interviews in the near future. However, USCIS officials 

explained that they have not developed plans or a strategy for conducting 

interviews at this stage primarily because IPO is relatively new and began 

adjudicating I-829 petitions in September 2014. These officials added that 

IPO is in the process of determining whether or not to schedule an 

interview with a current immigrant investor but does not have a general 

strategy for conducting these interviews. While we recognize the 

establishment of IPO is relatively new, developing a strategy for 

conducting interviews on investors at the I-829 stage could, for example, 

help corroborate information those investors originally submitted to 

demonstrate that the investors have met program requirements before 

having their conditions for lawful permanent residency removed. Given 

that IPO is relatively new, this strategy could include an approach to focus 

on those investors at the I-829 stage who may be at higher risk for fraud.

USCIS does not collect certain applicant information that could help 

mitigate fraud. In fiscal year 2011, USCIS expanded reporting 

requirements to gather information about ongoing regional center 

activities such as information on the active projects managed by each 

regional center. According to USCIS and SEC officials, this information 

has helped identify potential incidents of fraud. However, USCIS does not 

require information on the Form I-924 about the businesses supported by 

the regional center and program investments coordinated by the regional 

center, such as the names of principals or key officers associated with the 

business, or information on advisers to investors such as foreign brokers, 

marketers, attorneys, and other advisers receiving fees from investors. 

According to USCIS officials, USCIS is drafting revised Forms I-924 and 

I-924A that will seek to address many of these concerns. However, as 

these revisions have not been completed, it is too early to tell the extent 

to which they will position USCIS to collect additional applicant 

information. SEC and FDNS stakeholders with whom we spoke 

emphasized that collecting additional information could be useful for 
Page 31 GAO-15-696 Immigrant Investor Program

USCIS to combat fraud. For example, according to these officials, the 

absence of information about businesses supported by regional centers 

limits USCIS’s ability to identify potential fraud such as misrepresentation 

of a new commercial enterprise. USCIS officials agreed that some 

additional information collection would enhance program integrity but 

have not done so because the process to add questions to application 

forms to capture information requires USCIS to document the rationale for 

such changes by directly connecting new questions to statutory eligibility 

criteria, and USCIS has dedicated its regulatory group to other priorities 

pending potential new legislation or expiration of the Regional Center 

Program in September 2015. We recognize these competing priorities 

currently exist; while these priorities are being addressed by USCIS’s 

regulatory group, the agency could also develop a strategy for identifying 

and collecting additional information on its petition and application forms 

to help mitigate fraud risks to the program, such as information on the 

businesses supported by regional centers.

GAO’s fraud control framework states that fraud prevention can be 

achieved by requiring registrants to provide information that is sufficient to 

provide reasonable assurance against fraud risks.56 Further, Standards 

for Internal Control in the Federal Government states that identified 

program risks, including fraud risk, should guide management’s planning 

and development of internal controls.57 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 recognized that the connection between national security 

concerns and specific EB-5 Program eligibility criteria may, at times, be 

tenuous. Specifically, USCIS has determined that it cannot terminate 

participation of regional centers, or deny immigrant investor petitions or 

regional center applications solely on the basis of national security 

concerns, unless such concerns lead an adjudicator to determine that the 

petitioner or applicant does not meet one or more EB-5 Program eligibility 

 

56GAO-06-954T. 

57GAO/AIMD-00-21.3.1.

USCIS Has Made Efforts 

to Enhance Its Statutory 

Authority to Help Mitigate 

Risks Associated with the 

EB-5 Program
Page 32 GAO-15-696 Immigrant Investor Program

criteria by a preponderance of evidence.58 The preponderance of 

evidence standard requires petitioners or applicants to establish eligibility 

by demonstrating that it is more likely than not that they meet all EB-5 

Program requirements.59 USCIS’s authority with respect to fraud or 

misrepresentation identified by an adjudicator in the petition or application 

process is less uncertain than that for national security concerns in that 

petitioners or applicants must show that their claims for EB-5 Program 

eligibility are more likely true than not (i.e., probably true), and potential 

fraud would generally bear on the truthfulness of petitioner or applicant 

claims. USCIS officials noted that USCIS has authority to deny a Form I485 application based on fraud, misrepresentation, and national security 

concerns as these constitute grounds of inadmissibility that would render 

an immigrant investor ineligible for adjustment to conditional permanent 

residency.60

According to FDNS officials, some regional centers continue to operate 

despite concerns of fraud or associations with criminal activity. For 

example, FDNS officials cited a case involving a regional center principal 

against whom a federal grand jury returned a multiple count wire fraud 

indictment, and who was, at the time, in custody in a foreign country. 

 

58Under 8 C.F.R. § 103.2(b)(18), USCIS has the authority to withhold adjudication of a 

visa petition or other application if it determines that there is an ongoing investigation 

involving eligibility, in connection with the benefit request, and disclosure of information to 

the applicant or petitioner concerning the adjudication would prejudice the investigation.

59In administrative immigration proceedings (including visa petition proceedings), the 

petitioner or applicant bears the burden of establishing that he or she is eligible for the 

benefit sought based on a preponderance of the evidence, except where a different 

standard is specified by law. Matter of Chawathe, 25 I. & N. Dec. 369, 375-76 (A.A.O. 

2010); Matter of Martinez-Gonzalez, 21 I. & N. Dec. 3329, 1997 WL 602544, at *1 (B.I.A. 

1997); Matter of Soo Hoo, 11 I. & N. Dec. 151, 152 (B.I.A. 1965). The “preponderance of 

the evidence” standard requires that the applicant demonstrate his or her eligibility claims 

to be more likely than not, or probably true. See Matter of Chawathe, 25 I. & N. Dec. at 

376. “The ‘preponderance of the evidence’ standard requires that the evidence 

demonstrate that the applicant’s claim is ‘probably true,’ where the determination of ‘truth’ 

is made based on the factual circumstances of each individual case.” Id. (citing Matter of 

E-M-, 20 I. & N. Dec. 77, 79-80 (B.I.A. 1989)). The statute and regulations governing the 

EB-5 Program do not specify a different standard; therefore, EB-5 petitioners or applicants 

must establish eligibility for participation in the EB-5 Program based on a preponderance 

of evidence.

60For grounds of inadmissibility based on fraud, misrepresentation, and national security 

concerns, see 8 U.S.C. § 1182(a)(3), (6)(C)(i). Under 8 U.S.C. § 1255(a), an alien is 

eligible for adjustment of status where, among other things, he or she is eligible to receive 

an immigrant visa and is admissible to the United States.
Page 33 GAO-15-696 Immigrant Investor Program

According to FDNS officials, USCIS terminated this regional center 

because the principal failed to file the Form I-924A application 

supplement as required by regulation rather than, for example, on 

grounds related to the charges upon which the regional center principal 

was indicted.

USCIS officials noted that if fraud or national security concerns either 

alone or in combination with other factors lead an adjudicator to 

determine, based on a preponderance of the evidence, that a regional 

center is failing to fulfill the statutory requirement of promoting economic 

growth, adjudicators can under those circumstances terminate the 

regional center or deny an application for regional center designation. 

However, USCIS believes that unless a connection can be made that the 

regional center is failing to promote economic growth, it does not have the 

authority to terminate a regional center.61

In June 2012, USCIS provided technical assistance to congressional 

committees concerning legislation that would make changes to the EB-5 

Program statute. This technical assistance proposed, among other things, 

giving the Secretary of Homeland Security discretionary authority to deny 

or revoke EB-5 Program petitions, regional center applications, and other 

petitions or benefits flowing from those petitions or benefits, when 

deemed necessary in the national interest or for other good cause. 

USCIS also provided technical assistance on the American Job Creation 

and Investment Promotion Reform Act of 2015, S.1501, which was 

introduced in the Senate in June 2015.

According to USCIS officials, 

the lack of authority to terminate a regional center or deny an immigrant 

investor petition or regional center application based solely on national 

security or fraud concerns is a major challenge and requires a significant 

amount of time to link findings to the statutory criteria.

62

 

61Under 8 C.F.R. § 204.6(m)(6), a regional center may also be terminated where it fails to 

submit required information.

This bill would provide a 5-year 

reauthorization of the Regional Center Program through September 30, 

2020, and would make substantial changes to the EB-5 Program statutory 

framework. For example, the proposed bill brings the Regional Center 

Program under the Immigration and Nationality Act (INA), as amended; 

62In addition to S.1501, in January 2015 the American Entrepreneurship and Investment 

Act of 2015, H.R.616, was introduced in the House of Representatives, and would provide 

a permanent authorization of the regional center program.
Page 34 GAO-15-696 Immigrant Investor Program

explicitly requires that fraud, misrepresentation, criminal misuse, and 

threats to public safety or national security be considered in establishing 

eligibility criteria for regional centers; and states that the Secretary of 

DHS shall deny or revoke approval of a regional center business plan 

application with any particular investment or business arrangement that, 

in his or her unreviewable discretion, presents a public safety or national 

security threat or significant risk of criminal misuse, fraud, or abuse.

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.63 Specifically, in April 2005, GAO reported that USCIS 

adjudicators lacked the expertise to adjudicate EB-5 Program petitions, 

and were not sufficiently trained to properly adjudicate EB-5 Program 

petitions because of the complex business and tax issues involved.64

 

63OIG-14-19 and 

More recently, in December 2013, the DHS OIG reported that USCIS 

lacked meaningful economic expertise to conduct independent and 

thorough reviews of economic models used by investors to estimate 

GAO-05-256. 

64USCIS officials subsequently changed the EB-5 training curriculum to provide 

adjudicators with training that addressed the complexities of EB-5 applications and helped 

to ensure that appropriate decisions would be rendered in accordance with applicable 

statutes, regulations, and agency policy. 

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
Page 35 GAO-15-696 Immigrant Investor Program

indirect job creation for regional center projects, and recommended that 

USCIS coordinate with other federal agencies to provide expertise in the 

adjudication process.

USCIS took action over time to increase the size and expertise of its 

workforce, provide clarifying guidance and training, and revise its process 

for assigning petitions and applications for adjudication. For example, in 

2014, USCIS began increasing its staffing from 9 adjudicators to 58 

adjudicator officers and 22 economists as of June 2015, and in May 2013, 

issued a policy memorandum clarifying existing guidance to help ensure 

consistency in the adjudication of petitions and to provide greater 

transparency for the EB-5 Program stakeholder community, according to 

IPO officials. In addition, USCIS improved its training curriculum to better 

ensure consistency and compliance with applicable statutes, regulations, 

and agency policy, including an update in 2014 of the new employee EB5 training program and the establishment of an ongoing training focusing 

on recurring issues and petition cases that are novel in nature. IPO 

program managers stated that USCIS revised its application assignment 

process in 2015 to help improve the consistency and efficiency of its 

adjudication of large-scale, multi-investor regional center projects. Under 

the new approach, the same economist is assigned to review the 

business plan, economic analysis, and organizational documents for each 

project involving multiple regional center investors. We interviewed 8 EB5 Program economists who reported that they were satisfied with the 

guidance and that the training provided them with a high degree of 

confidence in adjudicating EB-5 petitions and applications.65

Further, IPO program managers reported that USCIS has provided its 

economists with access to data from the RIMS II economic model since 

fiscal year 2013 that increased their capacity to verify job creation 

estimates reported by immigrant investors for investments in regional 

center projects. IPO program managers estimated that as of fiscal year 

2015, about 95 percent of EB-5 Program petitioners used economic 

models to estimate job creation, with about 90 percent of those petitioners 

 

65In regard to guidance, we asked “What is your level of satisfaction with guidance and 

standard operating procedures/checklist USCIS provided?” The 8 economists we 

interviewed responded “very satisfied” (5), “somewhat satisfied” (2), and “neither satisfied 

nor dissatisfied” (1). In regard to training, we asked “To what degree has the training you 

received sufficiently provided you with all the information and resources you need to 

adjudicate EB-5 applications?” The 8 economists we interviewed responded “to a very 

high degree” (5) and “to a high degree” (3). 
Page 36 GAO-15-696 Immigrant Investor Program

using RIMS II.66 The RIMS II model is widely used across the public and 

private sectors and is considered to be valid to verify estimates of indirect 

and induced jobs reported for investments in regional center projects, 

according to USCIS and Commerce economists, as well as industry and 

academic experts.67 Indirect jobs include jobs that are not directly created 

by the new commercial enterprise, but may result from increased 

employment in other businesses that supply goods and services to the 

regional center business as well as induced jobs created from workers’ 

spending of increased earnings on consumer goods and services.68

Under the law establishing the Regional Center Program, regional center 

investors are permitted to meet the job creation requirement using 

reasonable methodologies to estimate the number of jobs created, 

including jobs estimated to have been created indirectly through revenues 

generated from increased exports, improved regional productivity, job 

creation, or increased domestic capital investment.69

 

66The remaining 10 percent of program applicants who used economic models used other 

standard commercially developed input-output models such as Impact Analysis for 

Planning (IMPLAN), Regional Dynamic Models (REDYN), and Regional Economic 

Models, Inc. (REMI).

Further, the EB-5 

Program regulation permits regional center investors to estimate direct 

and indirect jobs for regional center projects using reasonable 

methodologies, including multiplier tables that are based on input-output 

economic models—coefficients that when used in conjunction with inputs 

67In the public sector, for example, the Department of Defense uses RIMS II to estimate 

the regional impacts of military base closings, and state departments of transportation use 

RIMS II to estimate the regional impacts of airport construction and expansion. In the 

private sector, analysts, consultants, and economic development practitioners use RIMS II 

to estimate the regional impacts of a variety of projects, such as the development of 

theme parks and shopping malls.

68IPO officials stated that the sum of the indirect and induced jobs from an input-output 

model is defined as “indirect jobs”. 

69See Pub. L. No. 102-395, tit. VI, § 610(c), 106 Stat. at 1874 (codified as amended as a 

note under 8 U.S.C. § 1153). Under 8 C.F.R. § 204.6(m)(7), an alien seeking an immigrant 

visa as an alien entrepreneur under the regional center program must demonstrate that 

his or her qualifying investment is within an approved regional center and that such 

investment will create jobs indirectly through revenues generated from increased exports 

resulting from the new commercial enterprise. To show that 10 or more jobs are actually 

created indirectly by the business, reasonable methodologies may be used, such as 

multiplier tables, feasibility studies, analyses of foreign and domestic markets for the 

goods or services to be exported, and other economically or statistically valid forecasting 

devices that indicate the likelihood that the business will result in increased employment. 

See 8 C.F.R. § 204.6(m)(7)(ii). 
Page 37 GAO-15-696 Immigrant Investor Program

such as a specified investment amount, can estimate economic outputs, 

such as job creation.70

However, use of RIMS II data alone does not provide USCIS with the 

capacity to determine the location of jobs created, such as the number of 

jobs created in targeted employment areas

USCIS economists said that the use of the RIMS II 

multipliers in combination with other information, including the eligible 

project investment amount, the code that identifies the project industry, 

and project location, has provided them with the necessary capacity to 

better ensure investors meet program requirements for job creation. We 

conducted a technical review of articles and other documents on the 

model as well as interviewed subject matter experts, including industry 

and academic researchers who published studies of the EB-5 Program 

structure, Commerce officials with the Bureau of Economic Analysis who 

administer the RIMS II model, and USCIS IPO officials who review the 

various economic models used by EB-5 investors. On the basis of our 

reviews and interviews, we determined that IPO’s use of RIMSII data is a 

reasonable methodology to verify job creation as permitted in law and 

program regulation.

71 that most immigrant 

investors use to qualify for a lower investment amount.72

 

70See 8 C.F.R. § 204.6(j)(4)(iii), (m)(3)(v).

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. IPO program managers stated that approximately 

90 percent of immigrant investors qualify for a reduced investment 

71A 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. A rural area is defined 

as any area not within either a metropolitan statistical area (as defined by the Office of 

Management and Budget) or the outer boundary of any city or town having a population of 

20,000 or more (based on the most recent decennial census of the United States). See 8 

U.S.C. § 1153(b)(5)(B)(ii), (iii); 8 C.F.R. § 204.6(e), (j)(6)(ii). A technical limitation of inputoutput models as a whole is that they cannot predict when and where indirect jobs will be 

created.

728 U.S.C. § 1153(b)(5)(B)(i) (a certain number of the EB-5 visas made available each 

fiscal year are reserved for qualified immigrants who invest in a new commercial 

enterprise that will create employment in a targeted employment area), (C)(ii) (a reduced 

capital requirement may be set for investments made in targeted employment areas); 8 

C.F.R. § 204.6(f) (amount of capital necessary to make a qualifying investment in a 

targeted employment area is $500,000).
Page 38 GAO-15-696 Immigrant Investor Program

amount—$500,000 instead of $1 million—to participate in the EB-5 

Program because they are claiming investment in a commercial 

enterprise that will create employment in a targeted employment area.73

The remaining 10 percent of immigrant investors pay twice that amount to 

participate in projects that are not limited to these locations. The IPO 

Economics Division Chief said that USCIS has not identified a need to 

verify the creation of jobs in a targeted employment area because the law 

permits regional center investors to use reasonable methodologies such 

as input-output models that do not have this capacity, and because 

program regulation and policy address the issue by requiring that capital 

be invested in a job-creating enterprise that is principally doing business 

in a targeted employment area.74 IPO economists we interviewed also 

said that given the relative ease of proving job creation through economic 

modeling compared with documentation requirements to prove creation of 

direct jobs, immigrant investors generally claim indirect jobs, rather than 

direct jobs, to qualify for the program.

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. To estimate job creation, USCIS multiplies the number of 

immigrant investors who have successfully completed the program with 

an approved Form I-829, by 10—the minimum job creation requirement 

per immigrant investor. To estimate overall investment in the economy, 

the agency multiplies the number of immigrant investors approved to 

participate in the program with an approved Form I-526, by $500,000—

the minimum investment amount, assuming all investments were made 

for projects in a targeted employment area. Accordingly, USCIS reported 

that from program inception in fiscal year 1990 through fiscal year 2014, 

the EB-5 Program has created a minimum of 73,730 jobs and more than 

$11.2 billion in investments.

 

73See 8 U.S.C. § 1153(b)(5)(B)(i), (C)(ii); 8 C.F.R. § 204.6(f).

74USCIS’s May 30, 2013, policy memorandum states that for the purpose of the EB-5 

Program, a new commercial enterprise is “principally doing business” in the location where 

it regularly, systematically, and continuously provides goods or services that support job 

creation. 

USCIS’s Methodology for 

Reporting Program 

Outcomes Is Not Valid and 

Reliable in Certain 

Instances
Page 39 GAO-15-696 Immigrant Investor Program

Our review and past GAO and DHS OIG audits of the program have 

pointed out the limitations of this methodology to report reliable program 

outcomes in that the data can be understated or overstated in certain 

instances.75 For example, USCIS officials stated that the majority 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. 

Estimating economic outcomes using the minimum program requirements 

in these circumstances would lead to an underestimate of the program’s 

benefits. For example, we reviewed one project with about 450 immigrant 

investors that created over 10,500 jobs, or about 23 jobs per immigrant 

investor, while USCIS counted only the 10-job minimum per immigrant 

investor (totaling 4,500), a difference of 6,000 jobs. Additionally, 

according to DHS’s 2013 Yearbook of Immigration Statistics, about 32 

immigrant investors paid $1 million instead of $500,000 into the EB-5 

Program in fiscal year 2013, a total difference of $16 million not counted 

by USCIS.76

Conversely, USCIS’s methodology may, in certain instances, overstate 

some economic benefits derived from the EB-5 Program. For example, 

the methodology assumes that all immigrant investors approved for the 

program will invest the required amount of funds, and that these funds will 

be fully spent on the project. According to our analysis of EB-5 Program 

data, there are fewer immigrant investors who successfully complete the 

program than were approved for program participation, and the actual 

amount invested and spent in these circumstances is unknown. For 

example, our analysis showed that approximately 26 percent of all EB-5 

Program immigrant investors who entered the program from its inception 

 

75The DHS OIG reported in 2013 that USCIS officials estimated the benefits of the EB-5 

Program assuming the minimum requirements of the program had been met, and could 

therefore only speculate about how foreign investments affect the U.S. economy. See 

OIG-14-19. We reported in 2005 that USCIS officials “did not have reliable data indicating 

the total number of jobs created solely as a result of investments by EB-5 participants”. 

See GAO-05-256. 

76These immigration data are published in the Yearbook of Immigration Statistics by the 

Office of Immigration Statistics in the Policy Directorate of the Department of Homeland 

Security. According to the yearbook, statistical data on immigration have been published 

annually by the U.S. government since the 1890s. Data on immigrant investors is included 

under the lawful permanent resident section of the yearbook. These data were obtained 

from USCIS’s Computer Linked Application Information Management System (CLAIMS) 

and USCIS ELIS. 
Page 40 GAO-15-696 Immigrant Investor Program

year through fiscal year 2011 may not have completed the process to 

show funds spent and jobs created with an approved I-829 as of the fiscal 

year ending in 2014.77

USCIS collects more complete information on EB-5 Program forms, but 

does not track or analyze this information to more accurately report 

program outcomes. Specifically, immigrant investors are required to 

report (and USCIS staff are to verify) the amount of their initial investment 

on the Form I-526, and to report the number of new jobs created (or 

expected to be created within a reasonable time) by their investment on 

the Form I-829. 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.

The Project Management Institute’s The Standard for Program 

Management states that programs need to establish monitoring and 

controlling activities to report on program performance.78

 

77Specifically, we compared the number of immigrant investors who filed an approved 

Form I-526 to participate in the program from program inception through fiscal year 2011 

(approximately 10,000), with the number of immigrant investors who filed an approved 

Form I-829 through fiscal year 2014 to report successful completion of the program 

requirements (approximately 7,400). The remaining immigrant investors fall into an 

aggregated category made up of investors who chose not to file a Form I-829, had their 

petition denied, or a decision on their petition was pending (approximately 2,600). 

Additionally, according to USCIS officials, this category could include immigrant investors 

who are not yet eligible to file a Form I-829 because investors are eligible to file only within 

90 days of the end of the 2-year period of their conditional resident status, which begins 

only after they adjust status or are admitted to the United States with an EB-5 visa, and 

not upon approval of an initial I-526 petition. We counted approved Form I-526 petitions 

through the end of fiscal year 2011 to account for (1) Form I-485 (adjustment of status) 

and DS-260 (immigrant visa) application processing times, (2) the fact that an immigrant 

investor does not become eligible to file a Form I-829 petition until 90 days before the 

expiration of his or her 2-year conditional residency period, and (3) Form I-829 petitionprocessing time.

This includes 

collecting, measuring, and disseminating performance information so 

program management has the data necessary to report on the program’s 

state and identify areas in need of improvement. Additionally, GAO’s 

Standards for Internal Control in the Federal Government states that 

activities need to be established to monitor performance, managers need 

78Project Management Institute, The Standard for Program Management.
Page 41 GAO-15-696 Immigrant Investor Program

to compare actual performance against planned or expected results, and 

controls should aim at validating the propriety and integrity of 

performance measures.79

Views differ on whether USCIS methodology, as defined in EB-5 Program 

regulations, should allow immigrant investors to claim all jobs created by 

projects with EB-5 and non-EB-5 investors.

Further, transactions should be promptly 

recorded to maintain their relevance and value to management in 

controlling operations and making decisions throughout the entire process 

of an event from initiation through final classification. Tracking and 

reporting the investment and job creation data it collects on the Forms I526 and I-829 would better position USCIS to more accurately assess 

and report on the EB-5 Program’s outcomes, in line with the program’s 

mission to bring new investment capital and jobs into the country and to 

help Congress and others better evaluate the benefits of the program.

80 We and the DHS OIG have 

previously raised questions about this practice because immigrant 

investors are to create 10 jobs based on their investment in the new 

commercial enterprise, and therefore including non-EB-5 Program 

investments in the enterprise can inflate the job creation benefit of the 

immigrant investment.81

 

79

The IPO Economics Division Chief and IPO 

program managers said that while they do not have resources to verify 

this fact for each project, it is possible that a regional center project would 

not occur or be viable without EB-5 Program investment funds, which 

provide an alternative source of capital for projects that might not be able 

to attract or afford investments from other foreign or U.S. sources. In the 

final rule implementing section 121 of the Immigration Act of 1990, legacy 

Immigration and Naturalization Service (INS) contemplated multiple 

investor scenarios in promulgating EB-5 regulations, and on the basis of 

GAO/AIMD-00-21.3.1. 

80Under 8 C.F.R. § 204.6(g)(1), the establishment of a new commercial enterprise may be 

used as the basis of a petition for classification as an alien entrepreneur even though 

there are several owners of the enterprise, including persons not seeking classification 

under INA § 203(b)(5), 8 U.S.C. § 1153(b)(5). The total number of full-time positions 

created for qualifying employees shall be allocated solely to those alien entrepreneurs 

who have used the establishment of the new commercial enterprise as the basis of a 

petition on Form I-526. No allocation need be made among persons not seeking 

classification under INA § 203(b)(5) or among non-natural persons (e.g., corporations), 

either foreign or domestic. See 8 C.F.R. § 204.6(g)(2). 

81The DHS OIG (14-19) and GAO-05-256 reported that allowing investors to take credit 

for jobs created with non-EB-5 funds makes it impossible for USCIS to determine whether 

the funds actually created U.S. jobs.
Page 42 GAO-15-696 Immigrant Investor Program

comments in response to the proposed rule, permitted the practice of 

allocating only to immigrant investors the jobs created as a result of the 

establishment of a new commercial enterprise by multiple investors, some 

of whom may not be seeking EB-5 visas.82

Additionally, according to the IPO Economic Division Chief, his analysis 

showed that projects in many industries could not generate the required 

number of jobs based on the minimum EB-5 investment alone, and 

otherwise would not be able to use and benefit from the EB-5 Program.83

Specifically, his analysis showed that about 160 industries, including 

manufacturing, are unable to create the required 10 jobs per investor 

based solely on the EB-5 Program minimum investment of $500,000.84

Our review of IPO documentation for one regional center project showed 

that many immigrant investors would not have qualified to remove 

conditions for lawful permanent residency without the practice of allowing 

them to claim jobs created by all investments in the commercial 

enterprise. In one case, about 450 immigrant investors contributed 30 

percent (approximately $225 million) of the capital toward a nearly $750 

million total investment in a regional center project, and all 450 immigrant 

investors were able to achieve lawful permanent residency by claiming 

100 percent of the nearly 10,500 jobs created.

According to IPO officials, without the practice of allowing immigrant 

investors to claim jobs generated by investments from other sources, a 

higher investment amount would be required for investors to meet the job 

creation requirements in these industries and qualify for removal of their 

permanent residency conditions.

85

 

8256 Fed. Reg. at 60,903.

However, if the jobs were 

distributed on a pro rata basis, only 315 of the 450 investors would have 

83GAO did not independently corroborate the outcomes of this analysis.

84For example, IPO’s Economics Division Chief said that an investment of $500,000 in the 

pharmaceutical industry yields about 5 jobs per investor, compared with 10 to 12 jobs per 

investor in larger-scale construction projects.

85Economic modeling for the project showed that 10,500 jobs were created by the total 

project spending. All 10,500 jobs were distributed on a pro rata basis such that each of the 

450 investors was allocated 23 jobs each. This represents a “job cushion” of 

approximately 130 percent over the USCIS-required 10 jobs per investor. According to an 

IPO economist we interviewed, most projects build in a job cushion to ensure that all 

investors meet the job creation requirements and to increase the likelihood that investors 

achieve approval for lawful permanent residency.
Page 43 GAO-15-696 Immigrant Investor Program

met the job creation criteria necessary to achieve lawful permanent 

residency.86

USCIS has commissioned Commerce’s Economics and Statistics 

Administration (ESA) to conduct a study of the economic impact of the 

EB-5 Program. According to the IPO Economics Division Chief, USCIS 

undertook this action in response to a December 2013 DHS OIG 

recommendation that USCIS conduct a comprehensive review of the EB5 Program to demonstrate how investor funds have stimulated the U.S. 

economy. As of June 2015, USCIS and ESA had not yet finalized the 

methodology for the new study; however, ESA and USCIS approved a 

statement of work in November 2014 that outlines a preliminary 

methodology and study steps that would address some, but not all, 

shortcomings of prior studies of the overall EB-5 Program benefits. Past 

studies, for example, included small sample sizes that were not 

representative of the total population and may have overstated economic 

impact because of the use of national, instead of regional, multipliers in 

the analysis. ESA’s study is to assess the value of the EB-5 Program 

beginning at the EB-5 project level for all projects completed (or at least 

lasting 2 years) for fiscal years 2012 and 2013. According to Commerce 

officials, the study findings will include (1) the immigrant investor 

investments as well as the non EB-5 investments used in each job 

creation estimate; (2) the number of jobs created as well as the value of 

the jobs from each project, citing the geographic area for which the job 

creation was claimed in the economic impact assessment; and (3) the 

likely household spending of immigrant investor families while living in the 

United States. Commerce officials indicated that for the study, all projects 

within a state will be added to derive a state total and then the state totals 

will be aggregated to determine a national total. ESA will review a 

majority of the economic impact assessments that led to the job creation 

estimates for each of the projects to determine whether the models used 

for estimating job creation were applied correctly. ESA also plans to use 

information submitted by immigrant investors on EB-5 Program forms and 

 

86Our analysis is based on the assumption that the 30 percent of EB-5 investments out of 

total project funding contributed to only 30 percent of the total jobs created. Therefore, the 

investors would receive credit for creating 3,150, which would not meet the job creation 

requirements for all 450 investors that contributed to the project. Instead, only 315 

investors would qualify for permanent residency (3,150 jobs divided by 10 jobs required 

for each investor). 

USCIS-Commissioned 

Study to Assess Overall 

Program Benefits 

Addresses Some Past 

Limitations, but Not the 

Costs, of the EB-5 

Program
Page 44 GAO-15-696 Immigrant Investor Program

entered into the Intranet Computer Linked Application Information 

Management System (iCLAIMS) to more specifically and reliably report 

program benefits. USCIS has provided ESA with data from the iCLAIMS 

database, including information from forms immigrant investors and 

regional centers use to meet program participation requirements—Forms 

I-526, I-829, I-924, and I-924A—which, according to an ESA official, ESA 

is beginning to examine in greater detail.87

However, the ESA study is not intended to address the program’s costs, 

which are important for assessing a program’s net economic impact. Both 

USCIS and ESA officials confirmed the study will be an economic 

valuation, which, unlike an evaluation, considers only the benefits of 

economic activity and does not assess or discuss the program costs. The 

IPO Economic Division Chief said that he consulted with ESA about 

including program costs in the study, and decided that the study will not 

include the program’s costs primarily for two reasons. First, academic 

research suggests that such high-income/net worth individuals who 

USCIS assumes participate in the EB-5 Program generally contribute far 

more in taxes (income and consumption) than they receive in social 

benefits funded from those taxes.

ESA will review DHS’s data 

collection and reporting system prior to using the iCLAIMS data to 

determine the value of the program. USCIS officials said that ESA plans 

to finalize the study methodology once it completes a review of the 

program data submitted by IPO, and to issue a final report in November 

2015.

88

 

87According to USCIS, iCLAIMS is its dedicated EB-5 database. IPO’s data entry group 

inputs data from Forms I-924 and I-924A into iCLAIMS, which are then linked to related 

Forms I-526 and I-829. iCLAIMS data are also reviewed by EB-5 adjudicators to ensure 

accuracy. 

Second, on an aggregate level, the 

costs of a maximum 10,000 EB-5 visas in a population of 316 million 

persons would be relatively insignificant, difficult—if not impossible—to 

aggregate on an individual level—and would be subject to the variability 

in that individual’s place of residence, tax structure, and the level and 

mechanisms of social support that person would be likely (and eligible) to 

receive, all of which are far beyond the abilities of the data that IPO 

88Additionally, the level and mechanisms of the most prevalent forms of social support 

(the transfers made through Social Security payments and various forms of income 

assistance) in the United States are inversely related to income, and since incomes for an 

accredited investor are in, at minimum, the top 5 percent of incomes in the United States, 

it is unlikely that they receive any form of social assistance. 
Page 45 GAO-15-696 Immigrant Investor Program

currently collects to support. USCIS officials said that for these reasons, 

the costs to gather the information may not justify the investment.

The Office of Management and Budget Circular A-94 Revised, Guidelines 

and Discount Rates for Benefit-Cost Analysis of Federal Programs, which 

applies to all analyses used to support government decisions to initiate, 

renew, or expand programs or projects that would result in a series of 

measurable benefits or costs extending for 3 or more years into the 

future, identifies actions agencies can take in cases where costs cannot 

be quantified when measuring the impact of a program.89 Specifically, 

OMB Circular A-94 provides that in analyses where not all benefits or 

costs can be assigned a monetary value, a comprehensive enumeration 

of the different types of benefits and costs can help identify the full range 

of program effects. For example, DHS costs to track and remove 

immigrant investors (and their families) from the United States who do not 

successfully complete the program, and costs to social programs such as 

Medicaid, Medicare, and Social Security may be associated with the 

program but difficult to quantify. Ensuring that the ESA study includes a 

discussion of costs that should be considered but cannot be quantified for 

the program would provide Congress and other stakeholders with more 

information on the overall value of the program.

The EB-5 Program seeks to stimulate the economy by promoting job 

creation and encouraging capital investment by foreign investors in the 

United States. However, these features of the program that can provide 

economic benefit to the United States can also create unique fraud and 

national security risks that must be identified and addressed. Planning to 

conduct risk assessments on a more regular basis would better position 

USCIS to identify, evaluate, and address future and changing risks to the 

program. This may be of particular importance as 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. Developing a 

strategy to expand its data collection efforts, such as interviewing 

investors who apply to remove conditions on their permanent resident 

 

89OMB Circular No. A-94 Revised, at PAGE 4. 

Conclusions
Page 46 GAO-15-696 Immigrant Investor Program

status and requesting additional information on applicant and petitioner 

forms, could better position USCIS to address these limitations.

USCIS’s ability to apply a valid and reliable methodology for reporting EB5 Program outcomes and economic benefits is important for program 

accountability and to provide the public and Congress with more complete 

information to evaluate the program and make reauthorization decisions. 

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. 

Additionally, taking steps to ensure that the valuation it commissioned 

Commerce to conduct includes a discussion of the types of costs that 

should be considered, but could not be quantified by the study, would 

provide Congress and other stakeholders with more comprehensive 

information on the overall economic benefits of the program.

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 

Program;

• 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.

We provided a draft of this report to Commerce, DHS, DOJ, SEC, and 

State for their review and comment. DHS provided written comments, 

which are reproduced in appendix I, and Commerce, DOJ, SEC, and 

State did not provide written comments. In its comments, DHS concurred 

with the four recommendations and described actions under way or 

planned to address them. Commerce and DHS provided technical 

comments, which we incorporated as appropriate.

Recommendations for 

Executive Action

Agency Comments 

and our Evaluation
Page 47 GAO-15-696 Immigrant Investor Program

With regard to the first recommendation, that USCIS plan and conduct 

regular future fraud risk assessments of the EB-5 Program, DHS 

concurred, stating that the EB-5 Branch of USCIS’s FDNS will continue to 

conduct a minimum of one fraud, national security, or intelligence 

assessment on an aspect of the program annually, as it has done since 

2012. DHS further requested that GAO consider this recommendation 

resolved and closed. While we believe that planning to continue 

conducting a minimum of one assessment on an aspect of the program 

annually is a positive step, to fully address the intent of our 

recommendation, USCIS needs to conduct at least one review, as 

planned. Thus, we continue to consider this recommendation open.

With regard to the second recommendation, that USCIS 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, DHS 

concurred and estimated that actions to develop such a strategy would be 

completed by September 30, 2016. Upon completion of the strategy, 

these actions should address the intent of the recommendation to 

strengthen USCIS’s ability to prevent, detect, and mitigate fraud in the 

EB-5 Program.

With regard to the third recommendation, 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 estimated that a plan to collect and 

aggregate additional data, including revisions to USCIS data systems and 

processes, would be completed by September 30, 2016. When USCIS 

implements this plan, this action should address the intent of the 

recommendation to more comprehensively assess and report program 

outcomes of the EB-5 Program.

With regard to the fourth recommendation, that USCIS include a 

discussion of the types and reasons any relevant program costs were 

excluded from the Commerce study of the EB-5 Program, DHS concurred 

and said that USCIS IPO will recommend to Commerce that a description 

of potential costs not assessed as a part of the study be included when 

the study is published later this year. Should Commerce include such a 

discussion of relevant program costs in its study that USCIS estimates 

will be completed November 30, 2015, this action should address the 

intent of our recommendation to more comprehensively assess and report 

the overall economic benefits of the EB-5 Program.
Page 48 GAO-15-696 Immigrant Investor Program

We are sending copies of this report to interested congressional 

committees; the Secretaries of Commerce, Homeland Security, and 

State; the Attorney General of the United States; as well as the U.S. 

Securities and Exchange Commission Chair. In addition, the report is 

available at no charge on the GAO website at http://www.gao.gov. 

If you or your staff have any questions about this report, please contact 

Rebecca Gambler at (202) 512-8777 or gamblerr@gao.gov or Seto 

Bagdoyan at (202) 512-6722 or bagdoyans@gao.gov. Contact points for 

our Offices of Congressional Relations and Public Affairs may be found 

on the last page of this report. Key contributors to this report are listed in

appendix II.

Rebecca Gambler

Director, Homeland Security and Justice

Seto J. Bagdoyan

Director, Forensic Audits and Investigative Service
Page 49 GAO-15-696 Immigrant Investor Program

List of Requesters

The Honorable Charles E. Grassley

Chairman

The Honorable Patrick J. Leahy

Ranking Member

Committee on the Judiciary

United States Senate

The Honorable Bob Corker

Chairman

Committee on Foreign Relations

United States Senate

The Honorable Ron Johnson

Chairman

The Honorable Thomas R. Carper

Ranking Member

Committee on Homeland Security 

 and Governmental Affairs

United States Senate

The Honorable Rob Portman

Chairman

Permanent Subcommittee on Investigations

Committee on Homeland Security 

 and Governmental Affairs

United States Senate

The Honorable Charles E. Schumer

Ranking Member

Subcommittee on Immigration and the National Interest

Committee on the Judiciary

United States Senate
Appendix I: Comments from the Department of 

Homeland Security

Page 50 GAO-15-696 Immigrant Investor Program

Appendix I: Comments from the Department 

of Homeland Security
Appendix I: Comments from the Department of 

Homeland Security

Page 51 GAO-15-696 Immigrant Investor Program
Appendix II: GAO Contacts and Staff 

Acknowledgments

Page 52 GAO-15-696 Immigrant Investor Program

Rebecca Gambler at (202) 512-8777 or gamblerr@gao.gov, or Seto 

Bagdoyan at (202) 512-6722 or bagdoyans@gao.gov. 

In addition to the contacts named above, Cindy Ayers, Joah Iannotta, 

David Alexander, Christopher Hayes, John Karikari, Andrew Kurtzman, 

Natalie Maddox, Jan Montgomery, Jon Najmi, Brynn Rovito, Edith Sohna, 

and Nick Weeks made key contributions to this report.

Appendix II: GAO Contacts and Staff 

Acknowledgments

GAO Contacts

Staff 

Acknowledgments

(441262)
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