STATEMENT OF

WILLIAM R. YATES

ACTING DEPUTY EXECUTIVE ASSOCIATE COMMISSIONER

OF THE

IMMIGRATION SERVICES DIVISION

IMMIGRATION AND NATURALIZATION SERVICE (INS)

BEFORE THE

SUBCOMMITTEE ON IMMIGRATION AND CLAIMS

JUDICIARY COMMITTEE

UNITED STATES HOUSE OF REPRESENTATIVES

2237 RAYBURN HOUSE OFFICE BUILDING

MAY 5, 1999, 10:00 A.M.

Thank you, Mr. Chairman and Members of the Subcommittee, for the opportunity to appear before you today to discuss this important issue. I last spoke before you on immigration benefit fraud on May 20, 1997. Today, I will discuss the Immigration and Naturalization Services' (INS') investments and initiatives in fraud detection since that time and their current status.

INS' Commitment to Fraud Prevention and Detection

The INS encounters two types of immigration fraud: fraud relating to applications or petitions for immigration benefits and document fraud. Fraud relating to petitions for immigration benefits (or immigration benefit fraud) is any misrepresentation of fact with the fraudulent intent to gain an INS benefit. Document fraud consists of the creation and or utilization of fraudulent documents to enter and/or remain in the United States. The former is particularly problematic, if undetected, in that it may result in the issuance of valid documents.

Immigration benefit fraud has increased both in scope and complexity in recent years. As INS has increased enforcement pressure at borders and at ports of entry aliens have increasingly resorted to immigration benefit fraud as an alternative means to enter and remain in the United States. Although immigration fraud is certainly not new, the volume and complexity of the fraud schemes and the exploitation of the benefit petition process by criminals and criminal organizations generate serious concern.

During the first half of FY 1999, INS received approximately 158,000 I-129s (Petitions for Nonimmigrant Worker) and completed approximately 146,000. INS denied a total of approximately 7% of the 146,000 petitions completed (for all reasons combined). This denial rate is consistent with prior year reports. For all fraud cases, including benefit fraud, Servicewide reports during the first 5 months of Fiscal Year 1999 indicate that presentations for prosecution far exceeded anticipated midyear goals. The actual number of fraud conspiracy investigations presented for prosecution Servicewide was 164 cases. These cases accounted for the presentation of 247 principals for prosecution. For those fraud prosecutions involving immigration benefit fraud, the number of immigration benefit petitions related may be one or 10,000. INS has also increased Special Agent attention to fraud activities. Based on the hours reported during first 6 months of FY 1999, INS will devote the time of nearly 200 Special Agents to fraud.

The INS is committed to detecting fraud. The INS has increased programs to combat and prevent fraudulent visa petitions and student petitions that would result in the issuance of valid immigration documents if approved. INS has concentrated its efforts at detection of fraudulent visa petitions the Service Centers where the majority of nonimmigrant worker petitions are filed. The INS is also piloting a new database system for student petitions that may prove to be a powerful safeguard against student visa fraud. The INS also has several initiatives underway to combat and prevent the creation of fraudulent documents, including the Forensic Document Laboratory and the Integrated Card Production System.

Fraudulent Benefit Petition Detection and Prevention

Immigration Benefits Fraud in Nonimmigrant Petitions

While improvements in forensic document capability and improvements in the technology used to create permanent resident cards, and other INS documents, has combatted document fraud, these efforts have created potential for fraud in petitions for H1 (temporary skilled workers) and L1 (intracompany transferee, specifically designed for large, multinational companies) nonimmigrant visa programs. Prior to these anti-fraud document efforts, immigration documents used to be much more widely available in the counterfeit market.

INS' Service Centers receive approximately 98% of all nonimmigrant worker petitions filed with the Service. As a result, they have created anti-fraud operational units to detect and investigate fraudulent applications. The Service Centers have initiated several anti-fraud measures, including: a check by the Service Center of the requesting company and address in INFOTEK (a commercially available database of public source information that provides corporate record information, zoning for a provided address, etc.), site visits by either the Service Center or INS office closest to the petitioning company, and computer assisted link analysis. These measures are employed when the Service Center receives petitions from small or new companies with little or no prior petitioning record, and/or companies having problematic past records with the Service. During site visits INS verifies the legitimacy of the company and that the beneficiary is actually employed there and performing the duties specified in the petition. The Service Center's Special Agents conduct site visits in the local area for H1 and L1 petitions. For companies outside the Service Center commuting area, the Service Center transfers the case to a Special Agent assigned to the local office with jurisdiction. The Service Centers have substantially increased their ability to use automated systems to conduct immigration benefit fraud link analysis. Because the four Service Centers each cover large geographical areas, opportunities exist to uncover large scale regional fraud conspiracies. Intelligence research specialists assigned to the Service Centers use commercial database tools as well as data from INS systems to link individual fraud cases, then continue to provide support for field investigations and prosecutions.

H1-B Petitions

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, annecdotal 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.

L1 Petitions

The L1 category was designed to allow a foreign company to send executive or managerial personnel to a U.S. subsidiary. Some examples of fraud schemes found in this category include instances where the petitioning company is started in the U.S. with no parent company overseas, or where the petitioning company does not exist. In the first instance the parent company is either nonexistent, or has no relationship to the U.S. subsidiary. Often, multiple companies will use the same address, will lease store fronts, or will operate from post office box addresses, residences, or apartments.

INS often relies upon consular offices and embassies overseas to verify the foreign parent company information. Nationals most commonly encountered by the INS utilizing the above L1 schemes are from China, Russia, and Brazil. Of the site checks done by the Texas Service Center on 108 Chinese companies in the Houston, TX area that had submitted petitions for L1 employees, 37 were determined to be involved in fraudulent schemes similar to those listed above, and the case was referred to the adjudications section with a recommendation to issue an "intent to deny".

Coordinated Interagency Partnership Regulating International Students (CIPRIS)

The INS and the Department of State have encountered visa fraud in the current, paper-based process for establishing visa eligibility for F, M, and J student or exchange visitor and their dependents. Because there is no system against which the consular officer can check, and because verifying the authenticity of each individual form I-20 (Verification of Nonimmigrant Student Status Eligibility) or IAP-66 (Certificate of Exchange Status Eligibility) is impractical, some aliens may use forged forms and counterfeit supporting documents to obtain F, M, and J visas. In cases where the forged forms and/or counterfeit supporting documents are suspect or are submitted to posts with historically high fraud rates, then individual beneficiaries are interviewed. Consular officers will check the beneficiary's eligibility documents with the alleged school or exchange sponsor to verify the legitimacy of the I-20/IAP-66.

Once issued a visa, the alien travels to the United States and applies for admission through a Port of Entry (POE). The alien is admitted on the basis of a valid visa and the I-20/IAP-66 forms and supporting evidence. The POE transmits the master copy of the form I-20/IAP-66 for data entry into either the INS' Student Schools (STSC) data system or the United States Information Administration's Exchange Visitor Information System (EVIS). Once the master copy of the I-20/IAP-66 has been data-entered, the school or exchange program reconciles the list against their records. Some aliens, posing as F, M, or J students or exchange visitors are, therefore, able to enter the U.S. because these systems are not connected to consulate posts or POE's. INS is usually alerted to this fraud long after the malafide alien has been admitted to the U.S.

The Coordinated Interagency Partnership Regulating International Students (CIPRIS) system is an electronic interactive process that has the potential to reduce all F, M, or J visa fraud as described above. In CIPRIS, the school or sponsor creates the eligibility record and transmits it via the Internet to the INS' CIPRIS data system. The CIPRIS system verifies the legitimacy of the school/sponsor, and the Designated School Official/Exchange Program's Responsible Officer, as well as the program information listed on the alien's petition against this record, and sends a notice to the alien overseas. The alien brings the notice to the Consulate, along with evidence in support of their visa petition.

At the Consulate, the consular officer verifies the legitimacy of the alien's record in CIPRIS. If the school/sponsor record is not in CIPRIS at the time of visa petition, the alien's visa petition is denied. If a record exists in CIPRIS, the consular officer then interviews the petitioner and verifies the authenticity of supporting evidence and enters the decision in CIPRIS. If approved, the visa information, passport information, and photo/fingerprint of the alien are downloaded into CIPRIS, and the system notifies the school/sponsor of the alien's visa issuance. At the time the alien appears at the POE for admission, the inspector is able to verify the visa, passport, and appearance of the alien against the data in CIPRIS. The inspector updates the system to reflect whether the alien was admitted, deferred or denied admission. This action results in the notification of the school/sponsor from CIPRIS via the Internet. When the alien enrolls or registers at the school/exchange program, the school/exchange program, via the Internet, updates the alien's record in CIPRIS. If the alien fails to enroll, the school/exchange sponsor updates the alien's record in CIPRIS, and CIPRIS flags the record as a "no show" initiating look out procedures by the Service.

CIPRIS is a joint partnership effort of the INS, the Department of State, the United States Information Agency, and the Department of Education, working in close relationship to schools, universities and exchange programs. CIPRIS is currently being pilot tested at the INS Atlanta Port of Entry and district office, the Texas Service Center, Department of State and United States Information Agency headquarters, and 21 pilot institutions located in the states of Georgia, Alabama, North and South Carolina.

Fraudulent Document Detection and Prevention

Forensic Document Laboratory

The INS Forensic Document Laboratory (FDL) provides a wide variety of forensic document analysis and support services to all INS programs in the enforcement of the immigration laws. Support is also provided to other Federal, State, and local agencies in joint operational initiatives involving immigration fraud. FDL services include: the scientific examination of questioned document evidence; the provision of testimony as expert witnesses in judicial proceedings and hearings; technical advice and assistance in major criminal cases involving fraudulent documents; training programs in the detection of fraudulent documents; the identification of document evidence; the production and dissemination of "Document Intelligence Alert" bulletins; collection of document exemplars; real-time assistance via the Photophone network in resolving questions concerning suspect travel documents and identity documents; and guidance to INS Headquarters program managers and foreign immigration authorities on policies and procedures involving document fraud.

Visa fraud is one such area in which FDL staff support INS field personnel. The INS Field Offices request forensic examinations of suspect immigration and identity documents used in status claims. Field personnel also utilize the Photophone network to obtain immediate assistance from FDL Intelligence staff in determining the disposition of suspect documents. In addition, the FDL provides advice and assistance to the Department of State Office of Fraud Prevention Programs and the Bureau of Diplomatic Security in common efforts to enforce the immigration laws.

The INS Service Centers also have small forensic document labs on site because of the large number of petitions and documents received. These labs are able to focus on the less complex and more common detections and rely on the support and expertise of the FDL for the more complex cases.

Creation of New INS Documents with Heightened Security

Over the last several years, the INS has initiated processes to create new and more secure immigrant documents to both prevent the creation of counterfeit documents and to increase detectability of counterfeit documents. These initiatives include the creation of new permanent resident cards, employment authorization cards, and LaserVisas (in conjunction with the Department of State).

These documents take advantage of improvements in technology; making them more difficult and significantly more expensive to counterfeit.

Recent INS Fraud Prosecution Efforts

The following case scenarios illustrate the variety and extent of immigration fraud that the INS must combat.

In Los Angeles this past November, INS undercover agents executed a search warrant for two storage facilities and seized more than 2,000,000 counterfeit identification documents. These documents included resident alien cards, Social Security cards, and driver's licenses from 9 states. The INS Forensic Document Laboratory has linked counterfeit documents seized in more than 80 other INS cases from across the country as being manufactured by the same organized crime group that was responsible for producing the stockpile seized in the Los Angeles raid. Commissioner Meissner has said of the operation, "We put out of business what we believe to be the largest organized crime group responsible for manufacturing and distributing phone identification documents in the United States."

Also in Los Angeles, a college student from Taiwan was found to be arranging marriages for other F1 students in exchange for the student obtaining a reduction in tuition costs.

An undercover investigation conducted jointly by INS and the Office of the Inspector General led to a 19 count indictment against an Alcohol Tobacco and Firearms Agent, an attorney, and two immigration brokers in March 1998. Those indicted had attempted to bribe an INS officer with $82,100 to obtain resident alien cards for 35 Korean families. The aliens paid $350,000 to obtain the cards to the indicted.

INS is committed to improving our fraud detection and prosecution and is actively pursuing joint ventures with other agencies to better utilize resources and technology. I appreciate the opportunity to testify before you today. I will be happy to take any questions you may have at this time.