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 & 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 US 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 US Citizenship and Immigration Services (USCIS), the visa granting arm of Homeland Security.

Jay Peak Resort in Vermont has used $200 million to transform itself into a year-round destination. And the developer of a new basketball arena for the Brooklyn Nets has collected $228 million to replace costly conventional financing.

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. Lawsuits target, among others, a redevelopment effort sponsored by the city of New Orleans, a dairy farm in South Dakota, and a Chinese restaurant in California.

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.

And the SEC has requested “some 500 files” related to the program, said one immigration official, who requested anonymity for fear of reprisal.

“The goal is sanctions and penalties,” the official said, adding that the SEC requested the documents as USCIS attorneys were conducting their own review of whether the EB-5 program had been following securities regulations.

Attorneys discovered “a pattern of not following the rules,” the official said. “This is huge; this shuts down everybody.”

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Editor's Note: So, US citizenship is for sale...how incredibly revolting.


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