Rep. Smith

Prepared Testimony of Witnesses
(Hypertext links are to HTML documents in the House Judiciary Committee web site.)

Opening Statement of Chairman Lamar Smith
Subcommittee on Immigration and Claims
Hearing on Nonimmigrant Visa Fraud
in the Petition-Based and Student Visa Categories
Wednesday, May 5, 1999

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

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

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.