Decades ago, the U.S. government developed a plan to allow investors to come to the United States. The Immigrant Investor Program, also known as the EB-5, was created to stimulate the economy through job creation and capital investment. Unfortunately, it is not uncommon for investors and businesses to face the risk of fraud.
In a recent report by the Washington Post, the U.S. Government Accountability Office (GAO) found that, while the Department of Homeland Security had taken steps to uncover fraud, the agency could be doing a better job of identifying issues and highlighting errors in reporting. Part of the challenge identified in the findings is the over-reliance on paper documentation. Electronic databases, said the GAO, were being underutilized. Further, the databases that were in place actually contained limited information on applicants.
Fraud detection is often dependent on uncovering the source of the investor's wealth. Depending on certain circumstances, procuring an EB-5 visa is reliant on investing either $500,000 or $1,000,000 into an American business. If those funds have come from illicit sources - such as the drug trade - the EB-5 is exposed to fraud. The GAO's report noted that more than 100 tips were provided to the Securities and Exchange Commission (SEC) regarding fraud between January 2013 and January 2015.
Additionally, there were concerns regarding the accuracy of the data that has been reported. Since the creation of the EB-5 in 1990, it has been reported that 73,730 jobs and more than $11 billion have been pumped into the U.S. economy. The GAO casts doubt on those numbers based on invalid calculations and overstated economic benefits.
While there are great benefits to both U.S. companies and foreign investors, the fraud detection and reporting of EB-5 visas leave much to be desired. Unfortunately, there is no insurance against investor fraud outside of the legal system. If you have questions or concerns about immigration law, it is wise to seek the counsel of an experienced attorney at once.