Under the EB-5 Program Regional Center model, first enacted as a pilot program in 1992 and reauthorized numerous times since, a certain number of the EB-5 visas are set aside annually for immigrant investors investing within economic units called regional centers, which are established to promote economic growth. Most recently, the EB-5 Program Regional Center model was extended until September 30, 2016. Immigrant investors can choose to invest on their own or with others directly in a business, or they may use a regional center to pool their investment with those of other immigrant investors and other foreign and U.S. investors to develop larger projects owned and managed by others. Immigrant investors must demonstrate 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. In recent years, the EB-5 Program has increased in popularity as a viable source of low-interest 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. 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. Prospective regional-center principals 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) 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 within its approved geographic area. USCIS is to issue a notice of intent to terminate the participation of a regional center if the center fails to submit the required information or upon a determination that the regional center no longer serves the purpose of promoting economic growth. As shown in figure 1, prospective immigrant investors seeking to participate in the EB-5 Program must complete three forms and provide supporting documentation as appropriate. Supporting documentation is assessed to ensure that the prospective immigrant investors have met (1) the terms of participation for the program, (2) criteria for lawful admission for permanent residence on a conditional basis, and (3) requirements of the program to have the conditional basis of his or her lawful permanent resident status removed. As of August 2016, USCIS had approved approximately 851 regional centers spread across 48 states, the District of Columbia, and four U.S. territories; and had terminated the participation of 61 regional centers for not filing a Form I-924A or not promoting economic growth. The Fraud Risk Framework identifies leading practices for agencies to manage fraud risks. It includes control activities that help agencies prevent, detect, and respond to fraud risks as well as structures and environmental factors that influence or help managers achieve their objectives to mitigate fraud risks. The framework consists of four components for effectively managing fraud risks: commit, assess, design and implement, and evaluate and adapt (see fig. 2). Leading practices for each of these components include the following: (1) commit: create an organizational culture to combat fraud at all levels of the agency, and designate an entity within the program office to lead fraud risk management activities; (2) assess: assess the likelihood and impact of fraud risks, determine risk tolerance, examine the suitability of existing controls, and prioritize residual risks; (3) design and implement: develop, document, and communicate an antifraud strategy, focusing on preventive control activities; and (4) evaluate and adapt: collect and analyze data from reporting mechanisms and instances of detected fraud for real-time monitoring of fraud trends, and use the results of monitoring, evaluations, and investigations to improve fraud prevention, detection, and response. Since August 2015, USCIS has continued to take steps intended to enhance its fraud-detection activities. This includes conducting and planning risk assessments to gather additional information on potential fraud risks to the program. USCIS is also taking steps to collect more applicant and petitioner information through a random site visit pilot and expanding its use of background checks, among other things, to help improve its ability to identify specific incidence of fraud. Further, USCIS has taken preliminary steps to digitize and analyze the paper files submitted by petitioners and applicants to the program. However, the EB- 5 Program is hampered by a reliance on voluminous paper files, and failing to carry through with these planned efforts could limit USCIS’s ability to improve fraud risk management. USCIS is currently conducting multiple risk assessments to help assess fraud risks to the program and has plans for future assessments. DHS concurred with our August 2015 recommendation that USCIS plan and conduct regular fraud risk assessments of the EB-5 Program in the future. In January 2016 and April 2016, USCIS officials updated us about their ongoing actions to conduct and plan risk assessments for the program. These assessments include a current study of potential fraud associated with certain immigrant investors’ source of funds, a random site visit pilot that is planned for completion later this year, and a planned study of all national-security concerns associated with the program: Source-of-funds study: FDNS is leveraging overseas staff to attempt to identify potential sources of fraud stemming from immigrant investors’ false statements regarding their source of funds to provide their investment in the program. Site-visit pilot: According to agency officials’ statements and documentation we reviewed, FDNS is designing and implementing a plan to conduct random site visits. According to agency officials, the visits will also serve to improve their assessment of fraud risks, and, according to documentation, will be random, in-person, and unannounced, and are intended to, among other things, provide enhanced integrity of the EB-5 program by increasing compliance with statutory and regulatory requirements, as well as deterring regional center and investor fraud. According to agency officials and agency documentation, a total of 50 site visits in four different states are planned. An agency official stated that the first site visits began in August 2016. Another official stated that they anticipate conducting additional site visits on both a continual and as-needed basis. National-security concerns: In April 2016, FDNS officials stated that they also planned to conduct a risk assessment of all previously identified national-security concerns for the program but did not have final details to provide at the time of our review. Based on past and current risk assessments, a senior FDNS official stated that the most frequent incidents of fraud in the program were associated with securities fraud, whereby immigrant investors were defrauded by unscrupulous regional-center principals and their associates. The official’s comments are consistent with our August 2015 findings that over half of ongoing investigations associated with the program related to securities fraud. In our report we also noted that the EB-5 program faced unique fraud risks compared to other immigration programs that included uncertainties in verifying that the funds invested were obtained lawfully and various investment-related schemes to defraud investors. For example, we reported that in one instance, a couple created a regional center and solicited immigrant investors with promises of investing in a local energy company. Instead of investing in that project, the couple used investor funds to, among other things, buy cars for themselves and regional-center employees, and invest in a financially troubled restaurant. Along with its risk assessments, since August 2015, USCIS has continued to take steps to improve its ability to identify potential instances of fraud. USCIS is taking various steps to capture and utilize additional information from its immigrant investor and regional-center program participants and is obtaining additional resources to aid its oversight. These actions were taken in part as a response to our August 2015 recommendation for USCIS to develop a strategy to expand information collection to strengthen fraud prevention, detection, and mitigation capabilities. According to USCIS officials, the EB-5 program has issued updated petition and application forms for public comment and anticipates publishing the revised forms in final in fiscal year 2017. These updated forms would help capture additional information about petitioners and applicants that could be used to potentially identify fraud. Along with capturing additional self-reported information from petitioners and applicants, USCIS officials stated that they are exploring increased use of Financial Crimes Enforcement Network (FinCEN) checks to identify potential fraudulent actors in the program, especially for regional-center applicants. Moreover, USCIS is exploring the potential use of a new process to allow interviews of immigrant investor petitioners seeking the removal of their conditional status at the I-829 stage, according to agency officials and documentation. According to agency documentation, this effort is in part a response to our August 2015 report, which recommended that USCIS develop a strategy to expand information collection such as considering the increased use of interviews at the I-829 phase. If implemented, the interviews will be conducted by knowledgeable USCIS officials based in Washington, D.C. As of August 2016, the officials stated that a limited number of pilot interviews had already taken place, and, as a result of these and additional pilot interviews, USCIS plans to refine and develop a comprehensive interview strategy.