Issues of corruption, fraud in investor-visa program date back two decades

Suspected abuses end up with 1 prosecution

An investor-visa program Congress wants to permanently extend was rife with fraud and corruption from its start more than two decades ago, with hundreds of millions of dollars improperly diverted as government officials lamented a persistent lack of oversight and an inability to investigate or prosecute the perpetrators.

Internal documents obtained by The Washington Times about the EB-5 investor visa program called for investigations into a handful of companies that appeared to be abusing the system — though only one of those companies seems to have been prosecuted. One memo said a plan to launch a full investigation was derailed by a lack of resources and by the perpetrators’ efforts to thwart it.

In a March 2002 Immigration and Naturalization Service memo, Senior Special Agent Elizabeth M. Goyer said the EB-5 program was dominated by a handful of private companies, most of them run by or closely associated with former high-ranking INS and State Department officials who were making money from being the middlemen on the visas.

“At least two of these companies were owned and operated by convicted felons who engaged such former officials to promote their fraudulent EB-5 schemes,” Ms. Goyer’s memo read, recommending that a task force be formed to conduct a full investigation and clean up the program.

More than a decade later, the EB-5 program is again under scrutiny after reports that high-ranking Democrats pressured U.S. Citizenship and Immigration Services, one of the agencies into which the INS split, to approve visas over the objections of career officers who deemed the applications to be unqualified.

The Homeland Security Department’s inspector general is investigating the program and the former director of USCIS, Alejandro Mayorkas, whom President Obama has since promoted to be deputy secretary of Homeland Security.

The EB-5 program was designed to spur investment by rewarding rich foreigners who commit to at least $1 million in job-creating U.S. businesses — $500,000 in economically depressed areas — with green cards, signifying lawful permanent residency.

Applications associated with the EB-5 program traditionally have a low denial rate, meaning the government accepts most people who make claims based on the investor program.

Repeated warnings

As of the 2002 memo, Ms. Goyer said just one EB-5 promoter, Interbank, had been the subject of a full criminal investigation. Company leaders eventually were convicted on charges of immigration fraud, wire fraud and money laundering.

The Homeland Security Department said none of the foreign investors was complicit in the fraud, however, and in fact some lost the funds they invested and were denied green cards.

There is no evidence that any of the other companies Ms. Goyer and others thought should be investigated ever faced that sort of scrutiny.

A 2004 memo from U.S. Immigration and Customs Enforcement, another of the agencies that INS broke into after the Homeland Security Department was created, acknowledged that the previous effort had been sidetracked.

“Two years ago, the INS proposed an investigative initiative targeting six of the largest EB-5 promoters,” the memo said. “Efforts to implement the plan were hampered by a lack of resources, by competing priorities, by the complexity and scope of these schemes, and by the continuous efforts by the EB-5 promoters and others to force the former INS (and then HOMELAND SECURITY DEPARTMENT) to abandon attempts to restore integrity to the program.”

ICE “has been attempting to preserve the viability of these investigations by trying to ensure that legislative and regulatory changes, civil litigation, and policy decisions do not effectively render immaterial the misrepresentations in the EB-5 petitions of the targeted promoters,” the memo said.

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