Q3 2016 EB-5 Petition Stats, GAO Report, RC List Updates

Path to Reauthorization
I’ve been updating my post Looking toward RC program reauthorization as significant developments come to my attention. I’ll make a new post when the text of new legislation is released. The days between now and September 30 will be interesting. At least the regional center program is less controversial than the Zika virus, so far.

FY2016 Q3 EB-5 Petition Statistics
The USCIS Immigration and Citizenship Data page now has EB-5 petition statistics for the third quarter of fiscal year 2016. IPO processed fewer petitions overall in Q3 than in Q2 2016. I-526 receipts were slightly up from Q2, but still relatively low, and IPO processed more I-526s than it received in Q3. An unusually large number of I-829 petitions were denied in Q3. The backlog remains dire. My charts summarize data for I-526 and I-829 receipts, approvals, denials, and pending petitions from the USCIS reports. I also added bonus charts estimating the amount of investment and number of immigrants associated with petitions filed since 6/1/2015 (to help visualize the impact of retroactive rule changes, and why we don’t want them), and showing IPO staffing levels as reported by Mr. Colucci in EB-5 stakeholder meetings (since staff increases have been a major strategy for tackling the petition backlog) and recent processing time reports.

GAO Report
The U.S. Government Accountability Office has posted a follow-up to its August 2015 EB-5 study that identified weaknesses in USCIS’s fraud mitigation activities. The title of the 9/13/2016 report summarizes the GAO’s new findings: Immigrant Investor Program: Progress Made to Detect and Prevent Fraud, but Additional Actions Could Further Agency Efforts. The 2016 GAO study mentions a number of fraud mitigation measures that USCIS has implemented for EB-5:

  • The Fraud Detection and National Security (FDNS) unit has grown to 25 FTE staff, and IPO has created a specialized group focused on regulatory compliance.
  • FDNS is using overseas staff to attempt to identify potential sources of fraud stemming from any false statements by immigrant investors regarding their source of funds.
  • FDNS has planned at least 50 site visits in four states, and anticipates conducting additional site visits on a continual and as-needed basis. The first site visits began in August 2016.
  • FDNS has conducted risk assessments, and identified securities fraud as the most frequent source of fraud in the program.
  • USCIS has updated I-526 and I-829 forms to help capture additional information about petitioners and applicants that could be used to potentially identify fraud.
  • USCIS conducts selected background checks on all of its immigrant investors and regional-center principals, in cooperation with partners such as the Federal Bureau of Investigation and U.S. Customs and Border Protection.
  • USCIS recently signed a memorandum of understanding with the Financial Crimes Enforcement Network (FinCEN) and anticipates conducting additional reviews to help identify potential fraudulent actors and fraudulent financial activity in its regional centers.
  • USCIS will use I-829 interviews to expand collection of information that could be used to identify fraud. (But so far a comprehensive interview strategy has yet to be developed.)
  • USCIS hopes to implement a case management system for tracking and reporting data related to EB-5 investments and job creation. Project completion is “tentatively planned for some time in fiscal year 2017.”
  • USCIS is developing standard operating procedures for adjudication staff for each investor form, and hopes to finalize these procedures by Q1 of FY2017.

GAO found that USCIS continues to be hindered by a reliance on time-consuming reviews of paper files that preclude certain potential fraud-detection activities such as the use of text analytics to help identify indicators of potential fraud. The continuation of planned efforts to digitize the files, including the supporting evidence submitted by applicants and petitioners, could help USCIS better identify fraud indicators in the program.

Regional Center List Updates
Additions to the USCIS Regional Center List, 08/29/2016 to 09/12/2016

  • APIC Regional Center California (California)
  • AmerAsia EB5 Regional Center SF, LLC (California)
  • American Investment Fund Regional Center, LLC (Oregon, Washington): www.aif-rc.com
  • Invest Atlanta Regional Center (Georgia): www.investatlantarc.com
  • KOIT Global Investments (Indiana, Kentucky, Ohio, Tennessee): www.koitglobal.com
  • Southern California Investments Regional Center (California)
  • Sun Island Regional Center (California)
  • The Flame Regional Center, LLC (New Mexico, Texas)

Renamed:

  • Montana Energy Regional Center LLC (former name USA Montana Energy Regional Center) (Montana)

New Terminations:

  • Resource Regional Center Michigan, LLC (Michigan) Terminated 8/31/2016

About Suzanne (www.lucidtext.com)
Lucid Professional Writing provides writing and editing services for businesses and scholars, and specializes in assisting clients to prepare business plans for filing with U.S. Citizenship and Immigration Services.

13 Responses to Q3 2016 EB-5 Petition Stats, GAO Report, RC List Updates

  1. Michael says:

    Interesting AAO decision concerning CMB’s request to expand scope to Tennessee posted by USCIS.

    • Yes — I logged that one as another entry for the “how low can you go” post on Regional Center application project plans. USCIS/AAO resisted approving CMB’s application based on a project that the applicant didn’t own, which is understandable, and yet really what makes hypothetical investment in a real project owned by someone else worse for the purpose of analysis than hypothetical investment in a purely hypothetical scenario — something that USCIS accepts all the time? The first could be more likely to give reasonable economic inputs, and the second is no more guarantee of the applicant’s ability to do a real project than the first.

  2. Wayne Wickizer says:

    “At least the regional center program is less controversial than the Zika virus,” This depends on perspective and if one is on the outside looking in or the inside looking out. Wayne Wickizer 🙂

  3. V Kumar says:

    Dear Suzanne Lazicki,

    Firstly, thank you for running this awesome info blog. Keep the great work going.

    What is surprising is that I thought that the USCIS nearly trebled their staff for processing I-526. But looks like that’s yet to yield results. Or is it because the staff were still training during Q3 and can expect significantly more application processes in the September quarter?

    • Thank you for your comment. I hope that staff training can explain why petition processing volumes are still depressed, because then we should indeed see improvement soon. And IPO has cited training as a reason for dips in the past. But I can imagine other factors too, with all the attention and political pressure not to make any adjudication mistakes, and with all the tasks besides adjudication that IPO is handling.

  4. Daniel Shires says:

    Hi Suzanne, I’m an investor and love your blogs. Thank you. What I thought was most concerning was the fact that almost 20% of I829’s were denied in the last quarter. I will be filing my I829 next year and am extremely concerned about this dramatic increase. Dan

    • I agree that this is concerning, and I’ll definitely report if I hear any news about factors behind that increase in denials. So far I haven’t heard any rumors that IPO has come out with new standards for I829 adjudication (as they keep doing for I526s), and last quarter’s numbers could be an anomaly.

    • Joe Whalen says:

      Sometimes a spike in I-829 denials represents only one project that failed; or the investors were associated with a terminated Regional Center.

  5. John Maxkrewl says:

    Hi Suzanne, I recently started following your blog after filing my I-526 couple of weeks ago. Thank you for all the great info and regular updates. I invested and applied in an exemplar project, which received its approval last year (Feb, 2015). The first petition in the project (filed in July, 2015) is yet to hear about its adjudication. Based on your knowledge, is there any advantage or expedited processing for such projects ? Or should we expect that it will take the usual 2+ years ?

  6. Dirk says:

    Thank you.

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