House Immigration Subcommittee Holds Hearing on H1B Visa Fraud
(May 6, 1999) The House Immigration Subcommittee held a hearing on Wednesday morning, May 5, on non-immigrant visa fraud, including fraudulent applications for H1B visas. Congress expanded the annual cap on H1B visas last year because of a shortage of high-tech professionals in the computer industry.
The bill was designed to relieve a shortage of high-tech professionals in the computer industry. Computer industry executives lobbied and testified before committees that there is a severe shortage of high-tech workers which is threatening the industry. The bill increased the number of H1B temporary worker visas from 65,000 to 115,000 in 1999, 115,000 in 2000 and 107,500 in 2001. The visa limit will return to 65,000 in 2002.
Witnesses at a hearing of the House Judiciary Committee's Subcommittee on Immigration and Claims said that fraud by both visa recipients and corporate sponsors is rampant, that government agencies do not have the resources to deal with the problem, and the recipients of fraudulently obtained visas are rarely prosecuted or deported.
These reports led Rep. Lamar Smith (R-TX), who presided at the hearing, to question witnesses, "What is the point of having all these visa laws on the books if we don't take any action against the people who violate them?" and "Does that sound like an immigration system that is working?"
Rep. Edward Pease (R-IN) asked one panel of witnesses, "Why is it that we are not prosecuting the folks who are the beneficiaries of illegal activity?" Michael Bromwich, Inspector General of the Department of Justice, answered that "the system would be flooded with cases."
Prepared Testimony of Witnesses
IG, Department of Justice.
Jacquelyn Bridgers, IG, Department of State.
William Yates, INS.
Gary Bradford, Texas Service Center, INS.
Nancy Sambaiew, State Dept., Bureau of Consular Affairs.
Jill Esposito, State Dept., Bureau of Consular Affairs.
John Ratigan, Paul, Weiss Law Firm.
Lynn Shotwell, Am.Council on International Personnel.
Mark Mancini, Wasserman, Mancini, & Chang Law Firm
However, witnesses did state that when the recipients of fraudulently obtained visas are engaging in additional illegal activity, such as drug trafficking, action against them is taken.
Jill Esposito, of the Visa Office of the State Department, testified about an example of H1B fraud. An American company sought an H1B visa for a foreign worker to serve as its "comptroller" to "direct the financial activities of the company." The worker was interviewed by the State Department in his country, and it was learned that he did not speak English, that the company was a donut shop, and that it was owned by his sister. (See, Esposito testimony, below.)
William Yates of the Immigration and Naturalization Service (INS) stated that the INS did a study of 3,247 cases referred to an American Consulate in India. He said that "they were unable to verify the authenticity of close to 45% of the claims made on the petitions. Twenty-one percent of the work experience claims made to the INS were confirmed to be fraudulent in this investigation." (See, Yates testimony, below.)
Yates testified that "the INS must rely on the American Consulate personnel as the means of verification." However, Esposito of the Bureau of Consular Affairs, testified that "we simply do not have the staff to conduct routine investigations for the INS."
In addition to beneficiary fraud, there is requesting company fraud. Yates described this as follows:
"Examples of fraud associated with the requesting company include instances where: the company is non-existent and/or operating from a post office box, residence, apartment, or many companies are sharing one of the above. Often the requesting company acts as an employment agency, petitions for the foreign workers, but then attempts to find them other jobs, with associated additional fees, paid for by the intending company. In some cases, an existing company petitions for employees, but terminates them on arrival, enabling an otherwise ineligible person to enter into the U.S. These actions are accomplished both with and without the beneficiary's advance knowledge."
Rep. Smith presided at the hearing. Rep. Sheila Lee (D-TX), Rep. Edward Pease (R-IN),
and Rep. Bob Goodlatte (R-VA) also participated.
|Senate Holds H1B
Visa Hearing, 2/25/98.
Sen. Abraham Introduces H1B Bill, 3/7/98.
GAO Questions IT Worker Shortage, 3/25/98.
Kennedy/Feinstein Introduce H1B Bill, 3/27/98.
Bills: Abraham v. Kennedy/Feinstein, 3/30/98.
H1B Bill Passes Senate Committee, 4/2/98.
H1B Bills Advance in Congress, 5/21/98.
Congressional Leaders Reach Agreement, 7/25/98.
H1B Visa Bills Stall In Congress, 8/12/98.
Gov. Wilson Tells Clinton to Sign H1B Bill, 8/26/98.
House Passes H1B Bill, 9/24/98.
H1B Bill Attached to Appropriations Bill, 10/13/99.
Opening Statement of Chairman Lamar Smith
|Today's hearing focuses on nonimmigrant visa fraud, specifically fraud
with employment-based and student visas.
With aliens paying tens of thousands of dollars to be smuggled into the United States in derelict vessels and across arid and inhospitable deserts, obtaining a visa fraudulently is a very tempting solution for aliens seeking to enter the U.S. illegally.
Who wouldn't choose a comfortable seat on an airplane over an the unventilated hold of a ship or a long distance trek through the wilderness? Traveling with a visa offers safety and comfort. Some even fly first class. While our primary concern about visa fraud is over its use as a means to facilitate illegal immigration into the United States, we should not forget that it also can be utilized by terrorists and criminals. Front companies that file fraudulent petitions on behalf of aliens who want to work illegally in the United States can just as easily be used as front companies for organized crime.
The INS and Department of State have identified pervasive fraud with some petition-based visa categories. First, let's look at L visas. Those visas enable personnel of multi-national organizations to transfer to offices in the U.S.
A 1997 report by the INS' California Service Center on L visa fraud by Chinese applicants, entitled the "Great Wall of Deception," described how paper companies play a "shell game" with phony sales invoices, business contracts and other documents that give the appearance of legitimate business activities.
Site checks of subsidiaries in the United States (the destination where the L visa holders are supposed to work) turned up a "flea bag motel, a residential home, an immigration consultant's office, and a legitimate business that allows subsidiary companies to use their address." According to the report, 90 percent of the Chinese L visa petitioners investigated were found to have submitted fraudulent documents to the INS. Department of State reporting from China posts described similar levels of fraud with L visa petitions.
Although many fraudulent L visas are denied, the Department of State still issued 38,000 L-1 visas in fiscal year 1998 and over 150,000 have been issued in the past five years. Thousands more acquired L status by changing their nonimmigrant status with the INS while in the U.S. While many of these visas were issued to the employees of well-known, legitimate companies, the true circumstances of many of the petitioning companies was undetermined.
Next, the H-1B Program is not without fraud. A March 1999 report by the INS' Vermont Service Center on Indian H-1B fraud described companies that established subsidiaries in the U.S. and then solicited job candidates and guaranteed them employment in the U.S. for a fee of $8,000 to $10,000. If the applicant did not have the necessary educational background to qualify for an H-1B visa, the recruiting agency would charge an additional fee and provide the applicant with fraudulent educational certificates or employment experience letters.
One of the questions we need to ask today is whether there are ways to eliminate structural vulnerabilities that exist in these visa categories while maintaining them as vehicles that are responsive to the real needs of legitimate companies.
One option would be for the INS to establish a system to track the immigration status of the holders of petition-based visas after they enter the country. These individuals can remain in the United States legally for as long as seven years -- we need to know where they are and what their status is.
Today, in a related matter, we will hear from the INS about the system it is developing, in collaboration with the schools, to monitor foreign students in the U.S.
Section 641 of the Illegal Immigration Reform and Immigrant Responsibility Act of 1996 mandated that the INS set up a system to track foreign students in the U.S.
Congress' primary concern in setting up this system was with students who legitimately enter the U.S. with a visa, but either do not show up at the school, or drop out after a short time and seek illegal employment. Up until now, the INS and the academic initiations have not had an effective tracking system in place.
Excerpt from the Prepared Statement of Jill Esposito of the State Department Regarding H1B Visa Fraud
|Another example recently reported by the Consulate General in Casablanca illustrates a
different problem for H-1B cases. The company that had filed a petition turned out to be
the donut shop owned by the applicant's sister and brother-in-law in the United States.
The donut shop supposedly needed her skills as a "comptroller" to "direct
the financial activities of the company." This applicant was 23 years old and a
recent university graduate. The petitioner firm is a bona fide entity -- the donut shop
really does exist -- and the applicant does indeed have a bachelor's degree as required
under the law. Still, the interviewing consular officer wondered how this was an alien
with highly specialized knowledge going to a specialty occupation.
Let me explain how this can happen. All employment visa petitions are adjudicated by the INS based upon the documents submitted. The applications are often filed by professionals who take care to "package" their clients in a way that will fit the requirements of the category. The INS officer will be buried in certifications and attestations as to how the beneficiary's degree and accounting experience in a "prestigious" foreign firm entitles her to be qualified as a specialty occupation employee. The donut shop will never be referred to as just that -- but always as the "corporate body" or "petitioning firm." INS will approve the petition based on the documentation included and send it to the consular officer abroad for visa issuance.
If a picture is worth a thousand words, I wonder how much an interview is worth? Only when the applicant shows up at the visa interview does the real picture become clear. The consular officer learns that the "comptroller" does not speak English, and that her employment experience had actually been an internship. The consular officer also recognizes that the prospective specialty occupation employee's professional background is not relevant to US accounting standards. Very often in cases like this the petition technically meets the requirements of the law - the company exists and the employee meets the minimum qualifications. In such cases, we are concerned that existing law leaves a large gray area where it is difficult to refuse issuance of a visa when there is not clear evidence of outright fraud. State consular officers may raise concerns regarding marginally and minimally qualified cases to the INS. However, INS as the adjudicating authority may reaffirm the petition and return it to post for visa issuance. ...
Unfortunately, we simply do not have the staff to conduct routine investigations for the INS. Also, investigations will not prevent abuse from "creative packaging" as described above. As long as the legislation governing these visa categories remains so vague and open-ended as to encourage this type of abuse, I believe we will continue to receive petitions for applicants who do not have the highly desirable skills or managerial experience that Congress intended to bring into this country.
Excerpt from the Prepared Statement of William Yates of the INS Regarding H1B Visa Fraud
|The H1-B category requires a baccalaureate or higher degree in a specialized field.
Currently 115,000 persons are allowed to enter the United States (U.S.) annually under the
H1-B classification. The individual must work in the specific job and for the requesting
company. INS has received and processed these petitions for many years. Recently, however,
anecdotal reports by INS Service Centers indicate that INS has seen an increase in
fraudulent attempts to obtain benefits in this category. These fraud schemes appear to be
the result of those wishing to take advantage of the economic opportunities available in
the U.S. The INS encounters 2 primary types of H1-B fraud: either the fraud on the part of
the requesting employer and/or the beneficiary.
Examples of fraud associated with the requesting company include instances where: the company is non-existent and/or operating from a post office box, residence, apartment, or many companies are sharing one of the above. Often the requesting company acts as an employment agency, petitions for the foreign workers, but then attempts to find them other jobs, with associated additional fees, paid for by the intending company. In some cases, an existing company petitions for employees, but terminates them on arrival, enabling an otherwise ineligible person to enter into the U.S. These actions are accomplished both with and without the beneficiary's advance knowledge.
Beneficiary fraud involves the falsification of either the education or prior job experience of the petitioner. This information is difficult for INS to verify as it originates from foreign sources and the format or form for submission by foreign businesses and schools is not standardized. These documents are easily falsified and, currently, the INS must rely on the American Consulate personnel as the means of verification. The employer may not know that the information is false.
As an example, more H1-B visas are issued in India than anywhere else in the world. The American Consulate in Chennai, India (AmCon Chennai) processed 20,000 H1-Bs last fiscal year, more than any other post in India. As early as 1996, AmCon Chennai estimated that a significant percentage of their H1-B petitioners, almost all of whom were computer programmers, were misrepresenting their academic or professional credentials. The INS Service Centers worked with the AmCon Chennai in a joint effort aimed at verifying claimed education and work experience from the petition submitted to the INS. These joint efforts were initiated one year ago. Between the inception of the joint effort and March 31, 1999, of the 3,247 cases referred to AmCon Chennai's anti-fraud unit, they were unable to verify the authenticity of close to 45% of the claims made on the petitions. Twenty-one percent of the work experience claims made to the INS were confirmed to be fraudulent in this investigation. In the cases where we are unable to verify the authenticity of the claims, INS issued an "intent to deny" to the petitioner, providing the petitioner with the opportunity to refute or overcome the presumption through countervailing evidence. The investigation and joint effort continues.