Incompetent Fraud Picked Up By USCIS on EB-5 Application

By David North on August 2, 2015

As we all know, USCIS has a low rate of denials in most of its benefit programs.

Sometimes I wonder how much of the fraud it does detect reflects not so much the vigilance of the agency as it does the obvious incompetence of the fraudster.

Routinely the public never sees the denied applications; the only time we get to peek at parts of them is when the alien in question appeals a benefit denial to the Administrative Appeals Office (AAO), the quasi-judicial review body within USCIS.

Under those circumstances the anonymous AAO reviewer often quotes from the applications to show that the alien is not eligible for what he or she seeks. (Sometimes, of course, the alien wins before OOA.) It is only in these decisions that we, despite the heavy-handed redacting of the text, can get a glimpse of the skill-level of some of the would-be fraudsters.

By definition, we never see the work of the capable deceivers. They get their green cards. My worry is that there must be some to many aliens, ineligible for what they want, who operate with more skill, and thus are granted benefits they do not deserve.

With all that in mind, let's look at the most recent AAO decision in the EB-5 program, that's the one that essentially sells a family-sized set of green cards to an alien investing $500,000 in a DHS-licensed but not guaranteed venture, usually in real estate. Each such investment is supposed to create ten jobs, but the misleading way that this requirement is handled is a different sad story.

All the EB-5 investments are also supposed to be funded by clean money, funds that can be traced back to a non-lawless source. In a subset of the applications, the alien's hands are not clean and in a still smaller subset of the larger subset, USCIS notices the problem and denies the petition.

At this point the alien has several choices: he can give up, or he can seek a different visa, or he can appeal to the AAO. If he takes the third option we get to see some of the facts of the case. It is like a prairie with numerous prairie dogs that you know are out there, but you can only see them once in a while, and then only one at a time.

Today's example is an EB-5 application that was denied by the chief of the EB-5 unit; then the alien – foolishly I think in this case – decided to appeal. What follows comes from an AAO decision released earlier this year.

There were numerous problems with the application, all spelled out by the AAO reviewer, and each fatal to the case. Here is, for example, a government-redacted section of the decision dealing with the source of the funds, which the alien had secured from her husband:

The lawyer who filed the appeal should have noticed these glaring discrepancies and should have told his client that an appeal bearing all these obvious problems would never succeed. He either did not notice, which would have been remarkably careless, or he went ahead with the appeal knowing it would fail, but also knowing that he, the lawyer, would be paid. (Given the AAO's bizarre privacy policy the lawyer's name is always blacked out of the decisions, which is a nice shield for incompetent or lazy attorneys.)

Unfortunately we will never know how many bad, but more skillful, applications are approved.

But we should give credit where credit is due; in this EB-5 case the USCIS staff rejected the application, and the AAO rejected the appeal