Thursday, December 12, 2013

Some concerns stem from investigation into Iranian operatives

WASHINGTON - Senator Chuck Grassley, Ranking Member of the Senate Judiciary Committee, today pressed the administration for answers about an Immigration and Customs Enforcement memo that raises significant national security questions about the EB-5 visa program, which is an avenue for foreign investors to participate in potential, new commercial enterprises in the United States in exchange for a U.S. visa.  The memo was written by the Homeland Security Investigations (HSI) arm of Immigration and Customs Enforcement.

In a letter to Immigration and Customs Enforcement Acting Director John Sandweg, Grassley wrote, "The HSI memo makes clear that overall, HSI believes the Regional Center model has significant flaws..."  Grassley also said the memo identified several areas of vulnerability within the EB-5 visa program.  The memo questioned whether the vulnerabilities could be fixed in order to "ensure the integrity of the program."

Grassley was especially concerned about a section of the memo that outlines how the EB-5 program "may be abused by Iranian operatives to infiltrate the United States."  According to the memo, HSI became concerned about the program while investigating operatives who allegedly "facilitate terrorism and are involved in an illicit procurement network that exports items to Iran..."

Here's a copy of the text of Grassley's letter to Sandweg.  A copy of the memo and letter can be found here.

December 12, 2013

VIA ELECTRONIC TRANSMISSION

John Sandweg

Acting Director

U.S. Immigration and Customs Enforcement

U.S. Department of Homeland Security

500 12th Street, SW

Washington, D.C. 20536

Dear Acting Director Sandweg:

I write to inquire about an internal U.S. Immigration and Customs Enforcement (ICE) memo that raises significant questions about U.S. Citizenship and Immigration Services' (USCIS's) EB-5 Regional Center program.  The memo is from Homeland Security Investigations (HSI), an investigative arm of ICE.  It appears to have been written in response to a request from Secretary Janet Napolitano.

One section of the memo outlines "concerns that this particular visa program [EB-5] may be abused by Iranian operatives to infiltrate the United States . . . ."[1] Two of the operatives allegedly "facilitate terrorism and are involved in an illegal procurement network that exports items to Iran for use by 'secret' Iranian government agencies."[2] According to the memo, one of the operatives acted as a representative in the U.S. for an Iranian front company allegedly run by an individual associated with Iran's Islamic Revolutionary Guard Corps.[3]

This is not the first time that Iranian operatives have been discovered operating in the United States.  In this spring of this year, Manssor Arbabsiar, who had both Iranian and U.S. passports, was sentenced for plotting with Iranian military officials to kill the Saudi Arabian ambassador by bombing a Washington, D.C. restaurant.[4] Earlier this fall, news outlets reported that the U.S. had intercepted an order from Iran to attack U.S. interests in the event of a strike on Syria.[5] In light of these facts, it is alarming to see documentation that appears to indicate Iranian operatives used the EB-5 program to try to obtain visas for their associates.

According to the HSI memo, ICE identified seven main areas of program vulnerability with the EB-5 visa:

1)      Export of sensitive technology/economic espionage;

2)      Use by foreign government agents/espionage;

3)      Use by terrorists;

4)      Investment fraud by regional center;

5)      Investment fraud by investors;

6)      Fraud conspiracies by investors and regional center; and

7)      Illicit finance/money laundering.[6]

The memo states: "The aforementioned vulnerabilities are directly affected by information gaps on the alien beneficiaries of the EB-5 program.  Unlike most other permanent resident visa classifications, EB-5 beneficiaries do not need to establish a significant and verifiable background for program eligibility."[7]

According to the memo, HSI made several suggestions for both information collection fixes and legislative fixes to close loopholes in the EB-5 program.  Of the information collection fixes, the memo states: "HSI proposed making changes to the USCIS forms (I-526, I-829, I-924, and I-924A) that are used by RC's [regional centers] and alien investors.  HSI felt that the forms did not collect enough information to determine the validity of either the RC's, the alien investors or the source of the investor's funds."[8]

The legislative changes proposed by HSI were: (1) doubling the minimum investment amount, (2) limiting the program to allow only active investors involved in managing and directing a business enterprise, and (3) eliminating the consideration of induced jobs for meeting the requirements of the program.  These suggestions were not included in the technical assistance provided by USCIS in June 2012 when the EB-5 program was being reauthorized.  The only HSI recommendation which appeared in any form in the technical assistance was a proposal for providing inflationary adjustments to the minimum investment amount, which is very different from doubling it.

The HSI memo makes clear that overall, HSI believes the Regional Center model has significant flaws and should be abandoned: "The principal change proposed by HSI was that the Regional Center Model be allowed to sunset, as HSI maintains there are no safeguards that can be put in place that will ensure the integrity of the RC model."[9]

Given these concerns with the EB-5 Regional Center program and information gaps on recipients of EB-5 visas, it is important that Congress have statistics on what happens after individuals enter the U.S. on an EB-5 visa.  Foreign investors who participate in the EB-5 program may receive conditional permanent residence for a two-year period.  However, it seems unlikely that they are ever removed from the country even if the conditions of their conditional status are not met because the required jobs weren't created within the required period.

Therefore, please respond to the following:

1.      Please produce all legislative and information collection recommendations made by ICE or any of its divisions for the EB-5 program.  Please provide in detail any specific changes recommended for USCIS forms I-526, I-829, I-924, and I-924A.

2.      For each of the above recommendations, please identify the date ICE proposed the recommendation and to what entities it was proposed.

3.      What is the current total number of EB-5 conditional residents whose request to remove conditional status was denied?

4.      Does ICE know how many EB-5 investors who were denied permanent resident status remain in the country?  Does ICE know the location of these foreign investors?  If so, please provide a status report, including how many are detained, how many are in removal proceedings, and how many have been removed from the country by ICE.

5.      Do you or your agency have any information as to why USCIS did not provide Congress with the legislative recommendations made by HSI, as indicated in the attached memo?

6.      What is ICE doing to help ensure that USCIS does not provide EB-5 visas to individuals and entities that are involved in international terrorism or proliferation operations, as was the case with Iranian operatives whose goal was to infiltrate the U.S. and export items back to their country?

7.      What is the current status of the Iranian case mentioned in the memo?

8.      What type of visas did the two Iranian operatives mentioned in the memo enter the U.S. on?

9.      Is the principal of the regional center referenced in the memo in the United States?  If so, what type of visa did the principal enter the U.S. on?

10.  For each individual associated with the principal of the regional center through TECS subrecord hits, please indicate whether or not the individual has entered the U.S. in the past or is currently in the U.S., as well as what type of visa each individual entered the U.S. on.

11.  What is the current immigration status of each of the individuals referenced in questions 8, 9, and 10?

Thank you in advance for your cooperation in this matter.  Please respond to these questions by January 1, 2014.  Should you have any questions regarding this letter, please contact XXXX of my staff at (202) 224-5225.  I look forward to your prompt response.

Sincerely,