Posted on September 11, 2012

‘Investor Visa’ Probe

Sarah Ryley, The Daily, September 10, 2012

A burgeoning immigration program that gives wealthy foreigners and their families a chance at citizenship if they lay down big cash is under scrutiny by Homeland Security and the Securities and Exchange Commission, The Daily has learned.

The agencies are looking into the EB-5 “investor visa,” a program that has generated at least $2.3 billion in financing for hundreds of construction projects nationwide, from a ski resort in Vermont to strip malls in California.

Foreigners both in the U.S. and abroad must generally invest at least $500,000 to receive a temporary visa. If the investment creates 10 jobs after two years, the investors and their family members can apply for permanent residency, and eventually citizenship. If not, they face deportation. Regardless of the outcome, there is no guarantee of repayment.

Since the program was established 22 years ago, immigration officials have approved 12,904 investment visas; the investments have created an estimated 46,810 jobs.

Developers and immigration attorneys have turned the once-obscure EB-5 into a lucrative industry since the recession caused construction financing to dry up, drastically stepping up their recruiting efforts in far-away places, particularly China. The number of foreigners applying for the visa since the start of fiscal year 2008 totaled 12,201, compared with 9,475 in the previous 17 years combined, according to U.S. Citizenship and Immigration Services (USCIS), the visa granting arm of Homeland Security.


But many projects have gone bust and some are in legal disputes that allege fraud, casting doubt on the immigration agency’s ability to effectively monitor the program. {snip}

Last month, Homeland Security’s Office of Inspector General launched an investigation to determine if the program is “effectively administered and managed to detect and deter fraud, waste, abuse, while avoiding national security threats,” according to the internal announcement obtained by The Daily.

The inspector general has received at least one complaint this year asserting management routinely quashed concerns about fraud, according to a copy of the complaint.