SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOCVISA FRAUD AND IMMIGRATION BENEFITS APPLICATION FRAUD
TUESDAY, MAY 20, 1997
House of Representatives,
Subcommittee on Immigration and Claims,
Committee on the Judiciary,
The subcommittee met, pursuant to notice, at 9:45 a.m., in room 2237, Rayburn House Office Building, Hon. Lamar Smith (chairman of the subcommittee) presiding.
Present: Representatives Lamar Smith, William L. Jenkins, Edward A. Pease, and Melvin L. Watt.
Also present: Cordia A. Strom, chief counsel; Edward R. Grant, counsel; Judy Knott, staff assistant; Martina Hone, minority counsel.
OPENING STATEMENT OF CHAIRMAN SMITH
Mr. SMITH. The Subcommittee on Immigration and Claims will come to order.
We welcome you all to talk about the subject of visa fraud and immigration benefits application fraud. I have an opening statement, I am sure the ranking member has an opening statement, and then we look forward to hearing from our four witnesses today.
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This is a bit of an unusual hearing, as you know. One reason is because we just have one panel. The other is we have never had so many people at this table before, but we look forward to hearing from all of you during the course of this hearing today.
Visa fraud and benefits application fraud pose severe and increasing risk to the integrity of our immigration system and national security. Fraud such as sham marriages, failure to disclose criminal history in a visa or naturalization application, and using false or counterfeit documents to support an application are all on the rise. The incentive is obvious: An undeserving alien who fraudulently navigates the application process and obtains a visa, green card, or certificate of naturalization is in a very real sense home free.
Unlike one who has entered the country illegally, this alien need not rely on fraudulent or counterfeit documents to work or remain in the United States. The risk of detection or losing the document benefit is very low, even if the fraudulent scheme through which the alien got the benefit is investigated and prosecuted. So it is not surprising that aliens are willing to pay tens of thousands of dollars to smuggling rings for assistance in obtaining legitimate documents or that organized criminal entities use such fraud to support their operations.
Such fraud directly threatens our safety and national security. Hundreds of criminals as well as terrorists like the CIA shooting suspect Mir Aimal Kansi have exploited the weaknesses in our visa and benefit adjudication systems. It is the duty of government to lock the door against international criminals.
Page 3 PREV PAGE TOP OF DOC But reports by two Inspectors General show that administration couldn't lock the door because it doesn't have the key. The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 enacted tough new measures against this problem. Fraud penalties are now much more severe. Document fraud and smuggling can be prosecuted as racketeering offenses. INS agents have wiretap and undercover authority against the organized criminal enterprises that perpetuate visa and benefit fraud. The 1996 act thus sends a clear message to the State and Justice Departments that antifraud efforts must be given new and higher priority.
The message could not be better timed. The audit of Citizenship USA found thousands of potentially fraudulent cases stemming from misrepresentations regarding past criminal activity. Yet naturalization fraud is just the tip of the iceberg. When one looks more deeply into INS application and adjudication procedures, widespread fraud taints all kind of immigration benefits, including obtaining the green card, the first step towards citizenship.
As was the case in Citizenship USA, the greatest wrong was the failure to identify those aliens whose criminal records should disqualify them from receiving benefits. A potentially worse case arises in a case of aliens who, under the auspices of 245(i) of the Immigration Nationality Act, petition to adjust their status and receive a green card without going back home to apply for a visa. In such cases, the INS does not require that the applicants present criminal history records from their home country and has no system to independently check those records. Thus, in section 245(i) cases, the INS has no way of ensuring that applicants should not be excluded from addressing their status due to a disqualifying criminal or even national security violation.
What we know of the extent of fraud should cause great concern over what we do not know. For example, one ongoing INS investigation is focusing on more than 15,000 potential cases of marriage fraud. Other investigations have found that Russian organized crime entities are fraudulently obtaining scores of nonimmigrant L1 visas, which were designed to facilitate the transfer of executives in legitimate multinational companies. These work in front businesses for the Russian mob, and similar schemes are used by Caribbean drug smugglers and Asian alien smugglers.
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At some overseas posts, consular officers believe that 50 percent of all visa applications are fraudulent. In other regions, the suspected rate of fraud for specific types of applications is closer to 90 percent. Meanwhile, audits by the Inspectors General at State and Justice demonstrate the inadequacies of antifraud efforts both in consulates overseas and at INS processing centers inside the United States.
What was true in Citizenship USA also is true of visa and other benefits processing. Overwhelming demand and the desire to meet production goals compromise the integrity of the system. In one telling comment, the State Inspector General said when staffing is cut at a consulate, ''visa fraud prevention is usually the first function reduced.''
The most serious lapses in antifraud detection include the following: When the INS prosecutes a fraud ring, there is no strategy to go after the aliens who have benefited from the fraud. The Justice Inspector General even found the INS lacks the ability to flag the computer records of such aliens so at a minimum they do not receive further benefits.
The INS adjudicates many benefit applications on the basis of temporary or newly created files. The decision is made to grant benefits in many cases without relevant information from the alien's original and permanent file. Also, existing computer records are not always checked to see if the alien is deportable or otherwise ineligible for a benefit.
At many consular posts, information regarding most visa refusals is not entered into data bases. This means when applicants show up for a second or third interview, the officer may not know that the alien was previously refused a visa. In 50 countries, including Mexico, Pakistan, Afghanistan, Iraq, and Iran, the State Department waives the requirements that the aliens provide a copy of their police report as evidence of their lack of criminal history. The reason: the high incidence of fraudulent and counterfeit police reports. The result: aliens with criminal records are being granted visas.
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The INS and State Department do not share information that may help consular officers to refuse visas and INS inspectors to refuse admission to people who have attempted to gain admission to the United States through fraud. For example, information regarding visa issuances and visa denials is not transmitted from the State Department to the computer systems available to INS inspectors. Likewise, INS information regarding exclusions, apprehensions, and deportations is not available to consular officers.
Lack of resources contributes to these problems, but it cannot be a universal excuse. Equally to blame is a lack of commitment to antifraud efforts as a primary mission of INS adjudications and the State Department visa issuance process.
Congress has provided the enforcement tools and the clear directive that agencies' priorities must be redirected. We look forward to helping the INS and the State Department to making these new priorities a reality.
The gentleman from North Carolina, Mr. Watt, is recognized for an opening statement.
Mr. WATT. Thank you, Mr. Chairman. I will be brief. I think I am going to adopt a new definition of bipartisanship for these hearings. Whenever the chairman reads a statement, an opening statement that I could just take from him and read the bulk of it, then we must be about to have a bipartisan hearing on an issue.
I was listening very carefully to what he said, and the bulk of what he said could have been written by either side of this committee, and that is constructive and lets you know that we are all here trying to get a better definition of the extent of the problem and, more importantly, to try to figure out what things can be done to try to address the problem.
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What we all universally are in agreement on is that there are serious problems and there are serious consequences that result from the problems in the system, and I hope we can spend the time this morning getting your ideas, some of you, helping us understand more thoroughly the extent of the problem, and hopefully others of you giving us some good constructive suggestions about how we might be able to solve these problems.
I presume there is nobody on the panel who does not think we have a problem, so we won't have to spend much time debating that issue this morning. And maybe that is a good definition of a bipartisan hearing.
I thank you, thank the witnesses for being here, and I thank the chairman for convening the hearing on this important issue.
Mr. SMITH. Thank you, Mr. Watt. I appreciate those comments. The gentleman from Indiana, Mr. Pease, is recognized.
Mr. PEASE. Thank you, Mr. Chairman.
The ranking member has observed at least two possible tests for bipartisanship in this hearing, or lack of confrontation. I would observe a third which obtains today, and that is that the chairman's children are not here. He usually brings them when he needs some reinforcement in a confrontational hearing and, therefore, I am looking forward to a very productive, bipartisan hearing.
Page 7 PREV PAGE TOP OF DOC Mr. SMITH. Thank you, Mr. Pease. I have to add a comment here. I did bring my son to the last hearing which was not particularly confrontational or controversial. Mr. Watt said he would give me a pass for my son or daughter, and I said I would wait until we have a confrontational issue and I would bring my son or daughter at that time. He said it only counts one time.
But I should also say to Mr. Pease and Mr. Watt that in point of fact, I have three interns in my office this week, one of them is, in fact, my son, who will be here shortly, so that should be fair warning. And another intern is already here. So certainly you wouldn't want to embarrass me in front of the office interns. But I appreciate the comments.
We will now welcome our first panel, and our first panel consists of Mary Ryan, Assistant Secretary of the Bureau of Consular Affairs, U.S. Department of State. She is accompanied by Ed Vasquez, Consular Affairs, Fraud Prevention Program and Thomas McKeever, Diplomatic Security, Criminal Investigations Division.
Also, Paul W. Virtue, Acting Executive Associate Commissioner for Programs, U.S. Immigration and Naturalization Service, who is accompanied by William Yates, Director, Eastern Service Center in Vermont; Gideon Epstein, Chief Forensic Document Analyst, Forensic Documents Laboratory; William West, Chief Investigative Division Special Operations Unit in the Miami District; and Michael Cutler, Senior Special Agent, New York District;.
Also, Michael R. Bromwich, Inspector General, U.S. Department of Justice, and Benjamin F. Nelson, Director, International Relations and Trade Issues, National Security and International Affairs Division, U.S. General Accounting Office.
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Now, we thank you all for being here
Mr. WATT. There is somebody down here.
Mr. SMITH. Did I not recognize somebody? I am told you are an add-on. Don't take that in a pejorative sense, only that I didn't have your name on the list of witnesses. You are?
Mr. BLUME. Jim Blume, Mr. Chairman.
Mr. SMITH. We have met before. We will start with Mary Ryan.
STATEMENT OF MARY A. RYAN, ASSISTANT SECRETARY, BUREAU OF CONSULAR AFFAIRS, DEPARTMENT OF STATE, ACCOMPANIED BY ED VASQUEZ, DIRECTOR OF CONSULAR AFFAIRS, FRAUD PREVENTION PROGRAM AND THOMAS MCKEEVER, DIPLOMATIC SECURITY, CRIMINAL INVESTIGATIONS DIVISION
Ms. RYAN. Mr. Chairman, members of the committee, thank you for inviting me to testify on the Department of State's efforts to combat fraud in visa and passport services. I am joined today by Mr. Ed Vazquez, who is the Director of the Consular Affairs, and Mr. McKeever, who is from the Bureau of Diplomatic Security, which has primary responsibility for investigating passport fraud. These gentlemen, who are experts on the technical and practical aspects of our antifraud programs, will assist me in responding to your questions.
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The Department of State takes very seriously its role as the first line of defense in the U.S. border security program. We work particularly closely with the Immigration and Naturalization Service, but also with the range of U.S. law enforcement and intelligence agencies to ensure that in providing prompt and efficient service to the travelling public, American and foreign national alike, we are also safeguarding our country's borders from those who have no legal right to cross them.
The Congress has greatly assisted us in keeping pace with the vast technology and tools perpetrators use through the resources made available to us from retention of fees generated by our machine-readable visa issuance program. These fees have made a crucial difference. As you know, the President has proposed in the fiscal year 1998 budget that the Department of State be authorized to retain all of its consular and passport fees. I would hope that our effective management of the MRV fee program and the contributions those fees have made to improve border security would persuade you to support the President's proposal.
Fraud directed against official documents focuses either on the document itself through counterfeiting or altering it or on the issuance process through trickery or bribery. Defeating these efforts requires secure documents that are tough to fake and easy to detect when altered, and competent and honest officers issuing the documents who are well-informed about the tricks being used to try to fool them. In addition, any sensible fraud prevention scheme will count on well-trained law enforcement personnel, backed up by tough penalties for violators. Changing technologies will ensure that our adversaries will constantly improve their ability to fabricate and alter our documents, while human ingenuity guarantees we will face newer and more clever scams aimed at defeating our consular officers and passport examiners.
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While it is obvious that no document is immune to forgery or alteration, I want to stress the fact that the Department of State has made and will continue to make improvements to our travel documents. Through the introduction of photo-digitization and other security features, we are ensuring that our passports and visas are technically challenging to would-be document fakers.
We have developed new and more sophisticated databases to assist our officers in the field in detecting potentially ineligible applicants. In addition, our issuance process is making the best use of modern computer technology to produce clear and unambiguous accounting trails that defeat malfeasance. Our outreach programs, together with those of INS and other government agencies, acquaint foreign officials and airlines acceptance agents with fraud indicators. This ensures that false visas and passports face multiple scrutiny en route to the United States.
We are also pioneering data sharing technology with the Immigration and Naturalization Service. When fully deployed, this technology will allow a seamless web of data transfer among consular officers who issue the visas and Immigration inspectors who examine the document prior to admitting the holder into the United States. An inspector at a port of entry would be able in the future to compare the photograph and the application presented to the consular officer who issued the visa with the applicant who is standing before him seeking admission.
Over 500 employees of the Department of State, most of whom are working only part-time on fraud, are investigating passport and visa fraud domestically and overseas. Obviously, adequate staffing levels, whether overseas or in our passport agencies and DS offices, are vital to effective fraud prevention.
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Our passport directorate will issue more than 6 million passports this fiscal year with approximately the same size staff it did to issue half that number only 5 years ago. We are working smarter, we are using advanced technology to best effect, and we are trying hard to put customer service at the head of our list of goals. Likewise overseas, our consular officers, whose numbers have declined due to hiring below attrition in the past several years, are struggling to keep up with a burgeoning workload in the toughest places for consular fraud.
We are immensely grateful for the visa waiver pilot program and we hope the Congress will make it permanent, but it must be emphasized that while overall visa work load was brought down by the adoption of this program, the decline came in countries where the level of visa abuse was generally low. The visa waiver pilot program allows us to focus our resources where visa adjudication is most difficult, the immigration-push countries with the heaviest fraud.
Let me close by saying that nowhere in U.S. foreign policy have the changes in the 1990's hit us harder than in transnational issues affecting consular fraud: demographic movement of unprecedented levels, political instability, and vastly uneven economic development, the growth of international organized crime and drug trafficking, and the growing attractiveness of the United States as a destination, all combine to place an enormous burden on our consular officers and passport examiners. They have done a superb job under very difficult services. You in the Congress have given them many of the tools they need to do the job better, and I trust that, as you deliberate on the budget, you will remember that the security of our borders does indeed start with them. Thank you.
Mr. SMITH. Thank you.
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[The prepared statement of Ms. Ryan follows:]
PREPARED STATEMENT OF MARY A. RYAN, ASSISTANT SECRETARY, BUREAU OF CONSULAR AFFAIRS, U.S. DEPARTMENT OF STATE
Mr. Chairman and Members of the Committee, thank you for inviting me here today to testify on behalf of the Bureau of Consular Affairs about the efforts of the Department of State to combat fraud in visa and passport services. I am joined today by Ed Vazquez, the Director of the Bureau's Office of Fraud Prevention Programs, and Tom McKeever of the Bureau of Diplomatic Security. These gentlemen, who are experts on the technical and practical aspects of our anti-fraud programs, will assist me in responding to your questions.
Attempts to falsify, alter, counterfeit and/or obtain genuine U.S. visas and passports by fraud are a constant problem within the United States and around the world. Just as is the case with our currency, these documents confer highly sought-after benefits for which many people are prepared to pay a high price and sustain great risks. While the majority of consular fraud is committed to further illegal immigration, there are significant and rising threats against the integrity of our travel documents from organized criminals, drug traffickers and terrorists. In addition, the revolutionary political changes that have swept the former Soviet Union, combined with the liberalization of travel in the People's Republic of China, challenge consular officers to develop and use increasingly sophisticated tools to cope with potentially fraudulent travel to the U.S.
The Department of State takes seriously its role as the first line of defense in the United States' border security program. We work particularly closely with the Immigration and Naturalization Servicebut also with the range of U.S. law enforcement and intelligence agenciesto ensure that in providing prompt and efficient service to the traveling public, American and foreign national, we are safeguarding our country's borders from those with no legal right to cross them.
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The Congress has greatly assisted us in keeping pace with the advanced techniques and tools of fraud perpetrators through the resources made available to us from retention of fees generated by our machine readable visa (MRV) issuance program. These fees have made the crucial difference between sinking under a tidal wave of work during a period of acute personnel shortfalls, and copingalbeit imperfectlyin a manner that satisfies our service demand while safeguarding the integrity of our products. We want to thank you once again for giving us the authority to retain MRV fees. As you know, the President has proposed in the fiscal year 1998 budget that the Department be authorized to retain all of its consular and passport fees. I would hope that our effective management of the MRV fees and their contribution to improved U.S. border security would persuade you to support the President's proposal.
I will first describe the nature of the problems we confront in passport and visa fraud, and then outline some of the steps we are currently taking and planning to take to meet these challenges.
Fraud directed against official documents focuses either on the document itself through counterfeiting or altering it or on the issuance process through trickery or bribery. Defeating these efforts requires secure documents that are tough to fake and easy to detect when altered, and competent and honest officers issuing the documents who are well informed about the tricks that are being used to try and fool them. In addition, any sensible fraud prevention scheme will count upon well-trained law enforcement personnel backed up by tough penalties for violators. Changing technology assures that our adversaries will constantly improve their ability to fabricate and alter our documents, while human ingenuity guarantees that we will face newer and more clever scams aimed at defeating our consular officers and passport examiners.
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An additional factoraddressed in part by the recent Immigration Reform Actcomplicating passport issuance is the need to judge properly the thousands of state documents upon which we base a determination of citizenship and identity. These so-called ''breeder documents'' exhibit such variations in format, data and security features that they constitute a significant fraud vulnerability against which our examiners must guard.
Though it is obvious that no document is immune to forgery or alteration, I want to stress the fact that the Department has made, and will continue to make, improvements to our travel documents. Just a few years ago, we routinely issued U.S. non-immigrant visas with a simple ink and ribbon stamping press. While these ''Burroughs'' visas had extensive security features, they could also be counterfeited and altered with relative ease by someone with a printing press or even decent artistic skills. Our switch to the machine readable visathough it is far more labor intensive to issuerepresented a huge step forward in security, both in terms of the physical product, the visa, and in the integrity of the issuance process. While recognizing that there are few products of human ingenuity invulnerable to tampering, we continually raise the ''bar'' that a forger or alterer must hurdleat an increased cost, both in talent and moneyto obtain or create our documents fraudulently.
Our passports and visas are technically challenging to fake. Printed on products that are kept under lock and key, controlled by officers charged with their issuance, they contain security features that include: intaglio printing to give the document a texture, ultra-violet inks, watermarks, coded algorithms and fine line micro-printing for mathematical and visual verification. It is extremely rare to find either a forgery or alteration that has not run afoul of one or more of these features. In addition, our issuance process is malting the best use of modern technology to produce clear and unambiguous accounting trails that deter malfeasance. Our outreach programs, together with those of the INS and other U.S. government agencies, acquaint foreign officials and airline acceptance agents with fraud indicators so that false U.S. visas and passports face multiple scrutiny en route to the U.S. port of entry.
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The State Department's Bureau of Consular Affairs employs sixteen people in our Office of Fraud Prevention Programs (CA/FPP) to track fraud worldwide, to analyze the schemes used to defeat us and quickly inform our officers of them, to advise on secure document materials and features, to train our offices to detect and counter consular fraud and to provide specific support to those overseas posts and passport agencies that are particularly hard hit. CA/FPP publishes a monthly ''Fraud Digest'' of information on fraud trends gleaned from all sources that informs our passport field agencies and foreign service posts about what may be coming across their counters soon. Our officers provide training in fraudulent document detection and anti-fraud procedures to State Department employees, INS offices, foreign immigration officials and airline acceptance agents. In addition, CA/FPP is available as a resource for fraud prevention to our operating Directorates that issue the passports and visas targeted for fraud.
In addition to those sixteen full-time anti-fraud employees in CA/FPP, there is a fraud program manager in each of our fourteen passport agencies. Five of those have full-time assistants. At our overseas posts there are 95 individuals working full-time on anti-fraud work and an additional 200 working on it part-time. I think that you will agree that, as evidenced by those numbers, combatting fraud is a priority for the Department.
The State Department's Bureau of Diplomatic Security (DS) is the primary investigative agency in cases of passport and visa fraud. Passport investigations are conducted by some 150 special agents located in 17 cities around the United States. Following are some statistics about the DS passport fraud program:
On average, DS investigates approximately 3,500 new cases a year of suspect passport applications. About 65 per cent of these referrals come from the Bureau of Consular Affairs, with the remainder coming from other law enforcement agencies or the general public.
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DS document fraud arrest figures have steadily increased in the 1990's. DS arrested 565 people on document fraud charges last year, more than double the number arrested in 1992 (256).
Approximately 50 per cent of passport fraud cases involve aliens with no prior criminal records.
20 per cent involve criminal aliens.
30 per cent involve U.S. citizens.
75 per-cent of detected fraud cases involve impostors assuming the identity of living U.S. citizens.
20 per cent of fraud cases use counterfeit documents to support applications.
About 5 per cent of detected cases are infant death identity cases, that is, the identity of a dead irritant is stolen to create a totally new identity.
In order to maximize its use of resources, DS has in place an effective screening system for prioritizing passport and visa fraud cases. Investigations are prioritized for acceptance based on: the severity of the suspected criminal act; whether the suspected perpetrator is wanted for other crimes or has a record of prior criminal activity, is a government employee, a U.S. citizen or is a document vendor; and the likelihood of prosecution.
Statistically, fraud investigations represent a very small percentage of overall passport and visa issuance. On the passport side fraudulent applications detected have held steady worldwide for nearly the past decade at 3,500 per year. Overseas we perform about 125,000 anti-fraud investigations annually relating to immigrant and non-immigrant visas applications. Statistics on any clandestine activity are tough to interpret: we know what we catch, but we don't know the more important figure of what we miss. Detection trends, however, will tell us important facts about the nature of fraud.
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Photo-substitution is the fraud of choice for U.S. passports. This makes sense intuitively: the U.S. passport, confirming both citizenship and identity, is our most important document and our most secure technically. It is issued overwhelmingly inside of the United States (95% of all passports), and fraud committed to obtain a U.S. passport is a federal crime carrying a heavy penalty enforced by competent federal law enforcement authorities and backed up by the full power of the U.S. court system. It is also much tougher to pretend to be an American when you are notboth to obtain the passport and to use it once issuedthan to assume a foreign identity before U.S. officials. Recognizing that the line of attack against our passport is technical, we are in the process of switching to the newest photo-digitizing technology, the toughest to photo-switch. We are also now testing a very sophisticated database system for our passport fraud files, based on the highly successful ''tip-off'' we currently use to identify terrorists who try to obtain visas. In six months we will have much more rapid and sure access to our passport fraud files than we have now, and in two years time this data will be at file fingertips of our fraud program managers at each passport agency in the U.S. When technical improvements allow, we hope to take the system overseas.
The U.S. non-immigrant and immigrant visa is also susceptible to photo substitution using more advanced technology. We have seen well-done photo-subs coming from most parts of the world using a combination of chemical process and computer technology to mimic the processes we use to create the visa in the first place. A variety of techniques enable us to detect these alterations prior to airline boarding and at our ports of entry, but the real solution to this problem lies in data sharing technology that we are now pioneering with the INS. When fully deployed and effectively utilized, this technology will allow a seamless web of data transfer among consular officers the visas and immigration inspectors who examine the document prior to admitting the holder into the U.S. An inspector at a port of entry would be able to compare the photograph and the application presented to the consular officer who issued the visa with the applicant before him seeking admission.
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Another often effective fraud technique involves the creation of false companies or fake jobs for which petitions are filed on behalf of aliens seeking to enter the U.S. fraudulently. Organized criminals make use of this scam, especially OC groups from the former Soviet Union. We have set up a sophisticated database, backed up by DS field investigations, to deal specifically with this threat. We are also working closely with INS to improve our coordination on temporary worker visa petitions and approvals, seeking to close this particular route to fraudulent entry. INS's stationing of additional officers overseas under the ''Global Reach'' program has the potential to provide major assistance to the government's visa fraud prevention efforts.
I would be remiss in my testimony if I did not stress the importance of adequate staffing levels, whether overseas or in our domestic passport agencies, to effective fraud prevention.. Our passport directorate will issue over six million passports this fiscal year using approximately the same size staff it did to issue half that number only five years ago. We are working smarter, we are using advanced technology to best effect, and we are trying hard to put customer service at the head of our list of goals. Likewise overseas, our consular of ricers, whose numbers have declined due to hiring below attrition in the past several years, are struggling to keep up with a burgeoning workload in the toughest places for consular fraud. We are immensely grateful for the visa waiver pilot program (VWPP)we very much hope the Congress will make it permanentbut it must be emphasized that, while overall visa workload was brought down by adoption of this program, the decline came in countries where the level of visa abuse was generally low. It allowed us to focus our resources where visa adjudication is most difficult: the immigration-push countries with the heaviest fraud.
Page 19 PREV PAGE TOP OF DOC Let me say in closing that nowhere in U.S. foreign policy have the changes of the nineties hit us harder than in transnational issues affecting consular fraud: demographic movement of unprecedented levels, political instability and vastly uneven economic development, the growth of international organized crime and drug trafficking and the growing attractiveness of the United States as a destination all combine to place an enormous burden on our consular officers and passport examiners. They've done a superb job under very tough circumstances: you in the Congress have given them many of the tools they need to do better, and I trust that, as you deliberate on the budget, you will recall that the security of our borders does indeed start with them.
Mr. SMITH. Mr. Virtue.
STATEMENT OF PAUL W. VIRTUE, ACTING EXECUTIVE ASSOCIATE COMMISSIONER, OFFICE OF PROGRAMS, IMMIGRATION AND NATURALIZATION SERVICE, ACCOMPANIED BY GIDEON EPSTEIN, CHIEF FORENSIC DOCUMENT ANALYST, FORENSIC LABORATORY, WILLIAM WEST, CHIEF, INVESTIGATIVE DIVISION SPECIAL OPERATIONS UNIT, MIAMI DISTRICT, AND MICHAEL CUTLER, SENIOR SPECIAL AGENT, NEW YORK DISTRICT
Mr. VIRTUE. Mr. Chairman, members of the subcommittee, on behalf of the Immigration and Naturalization Service, thank you for this opportunity to testify on the increasing problem of document fraud and benefit application fraud.
In the past several years, the INS has been faced with a rising number of cases involving individuals and groups who use phony documents or some other fraud to enter, remain, and gain legitimate immigration benefits in the United States.
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This fraud falls into two basic categories: document fraud and benefit fraud. Document fraud is normally used by aliens to enter illegally or overstay. They use the phony document to dupe employers or to gain greater documents like drivers licenses or social security cards. Illegals with fraudulent documents must still maintain low profiles since they will usually be detected if encountered by INS.
The second type, benefit fraud, is a more serious problem because it threatens the actual integrity of the INS procedures and the benefits programs themselves. Benefit fraud can happen in many different programs, many different ways. It could be, for example, a counterfeit or altered document supporting a visa request or a sham marriage or false statement or a false identity. Essentially, it is any misrepresentation of fact with the fraudulent intent to gain an INS benefit.
An alien who successfully dupes the process receives a valid INS document. That alien, if encountered by INS at a worksite or port-of-entry, is unlikely to be detected, and as we tighten our documents and improve our ability to detect document fraud, benefit fraud will become increasingly attractive to those seeking illegal entry.
Ironically, the enforcement procedures established have prompted a growth in both of these types of fraud. INS' unprecedented border enforcement efforts are making it harder than ever to use the traditional routes of illegal entry. New laws and procedures have significantly reduced asylum fraud as a method for illegal entry, and enhanced intelligence and enforcement are forcing smuggling organizations to consider different methods to continue their traffic in human lives.
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Increasingly, alien criminals and organized crime groups are using the benefit application fraud process to gain entry into the United States or receive benefits here. We have seen cases of suspected Russian organized crime figures using the L1 intracompany transfer visas filed by dummy corporations. The same is true of Asian organizations who use the L1 as a ticket for aliens who pay up to $50,000 for this form of smuggling. The net effect of all this is an increase in fraud.
Unfortunately, as you know, the landmark number of new resources that have been allocated to the agency in the last 4 years have been primarily used to support the administration's and Congress' first priorities of cracking down on the border and removing criminal aliens. Nonetheless, I can assure you that the agency is working to make the most effective use of the personnel it has, in increasing coordination both internally and with other law enforcement agencies.
Let me give you my assessment of where we have been able to make progress and where our challenges lie. On document fraud, our forensic document laboratory, already recognized as among the best in the world, has received increased funding in the last few years. We are developing a new set of documents that use state-of-the-art technology. They are the most counterfeit-resistant documents ever developed in this country and among the most counterfeit resistant in the world. The new employment authorization document is now being produced, and later this year a new border crossing card and a new alien registration receipt card will be introduced. In fiscal year 1996, more than 8,000 cases directly linked to the production, sale, or use of fraudulent documents were presented to U.S. attorneys offices for prosecution.
Page 22 PREV PAGE TOP OF DOC On benefit application fraud, our task is more challenging, for several reasons. It covers a wide range of INS programs, fighting it is time consuming and labor intensive, and the volume of fraudulent applications in a benefit fraud scheme can be enormous.
In recent years, despite limited resources, we have taken action to combat benefit fraud as well. Those actions include presenting prosecution in fiscal year 1996 alone almost 15,500 cases involving criminal violations directly relating to fraud. Those include using forged or altered passports, making, using or selling false INS documents and false claims to U.S. citizenship.
Our four INS service centers, which handle some 57 percent of the applications adjudicated by INS, have established units focused on detecting document and benefit fraud. INS has established a fraud initiative that links our benefits and investigations offices. Using streamlined procedures, those teams of adjudication officers and special agents will work together to identify and investigate benefit fraud. The administration, Congress, and the INS have worked together to meet the challenge of regaining control of our borders.
In response to the clear wishes of the American people, we have established border patrol and criminal aliens as the most urgent priorities. Within those priorities, we have made significant progress. And while our buildup on the Southwest border is continuing, the record is clear that the new initiatives of INS and the resources provide by Congress are making it tougher than ever for undocumented aliens to illegally cross our border.
This progress is creating new challenges, among them the increased fraud that we are talking about today. And with the landmark number of new resources focused on critical and urgent functions of border and criminal control of criminal aliens, some components of the enforcement strategy, including benefit application fraud and to a lesser extent document fraud, have not received that increased attention.
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We deeply appreciate Congress' support of our priorities and initiatives at the border and the removal of criminal and other aliens. As new trends and priorities emerge, we will maximize the use of our existing resources and continue to look to sources of funding and work with Congress and the administration to strengthen the integrity of our immigration process.
Mr. SMITH. Thank you.
[The prepared statement of Mr. Virtue follows:]
PREPARED STATEMENT OF PAUL W. VIRTUE, ACTING EXECUTIVE ASSOCIATE COMMISSIONER, OFFICE OF PROGRAMS, IMMIGRATION AND NATURALIZATION SERVICE, DEPARTMENT OF JUSTICE
Mr. Chairman and members of the Subcommittee, on behalf of the Immigration and Naturalization Service (INS), I am pleased to have this opportunity to testify on document fraud and benefit application fraud.
Immigration fraud has increased dramatically in recent years and currently affects all aspects of INS responsibility. As the INS has bolstered and expanded its border control, worksite enforcement, and criminal alien programs, there has been a corresponding increase in the number of aliens resorting to fraudulent means to enter and remain in the United States.
Page 24 PREV PAGE TOP OF DOC In general, immigration fraud falls into two broad categories: document fraud and benefit application fraud.
(1) Document fraud encompasses the counterfeiting, sale, and/or use of identity documents or breeder documents such as birth certificates and Social Security cards, alien registration documents and stamps, passports and visas, and other fraudulent documents and paperwork to circumvent the immigration laws of the Nation. These fraudulent documents are often relied upon either to enter the United States or function within American society (e.g., worksites), or to support the acquisition of lawful immigration benefits.
(2) Benefit application fraud involves the willful misrepresentation of a material fact to gain an immigration benefit in the absence of lawful entitlement. In point of fact, document fraud and benefit application fraud are often part of a continuum.
SCOPE OF THE PROBLEM
Of the two categories, benefit application fraud poses the greater threat to the integrity of INS approval procedures for granting legal status. With benefit application fraud, an ineligible alien who successfully passes through the INS adjudicatory process receives a valid, Service-issued alien registration card and is unlikely to be detected thereafter. The alien, in effect, is ''home free.'' In contrast, a smuggled or otherwise illegal alien who does not choose this path must constantly keep a ''low profile'' or use fraudulent documents to avoid detection. Then too, the continued reliance on fraudulent identity documents subjects the alien to greater risk of detection.
Page 25 PREV PAGE TOP OF DOC As INS capability to uncover document fraud advances, ineligible aliens will resort increasingly to benefit application fraud to obtain the highly valued authentic immigration documents.
Benefit application fraud encompasses naturalization, political asylum, permanent residence based on marriage and other family relationships, legalization, Temporary Protected Status (TPS), and employment-based immigrant and non-immigrant categories. Accompanying this testimony is an addendum containing summaries of fraud investigations that reflect the broad spectrum of immigration fraud.
In addition to the wide range of INS programs affected, the sheer volume of fraudulent applications relating to a single benefit fraud scheme can be enormous, and the structure of the criminal conspiracy complex. Operation Desert Deception is a case in point. The investigation targeted several immigration consulting businesses that filed applications to qualify illegal aliens under the extended legalization and Special Agricultural Worker (SAW) programs. Of the 22,000 applications filed by the targeted arrangers, nearly 5,500 were admittedly fraudulent, and 4,400 were suspected of being fraudulent. As a result of the investigations, 54 individuals were successfully prosecuted. The Government estimates that these individuals received in excess of $4,000,000 in fees for filing the fraudulent ''late amnesty'' applications.
Of special note is the fact that Operation Desert Deception was the first time INS used extensive computer support and rudimentary data mining techniques to identify fraud trends among potentially fraudulent cases. Large scale conspiracies can no longer be investigated solely with traditional investigative techniques. Like a single money laundering transaction, an individual fraudulent application can often easily pass scrutiny. Only through computer analysis was it determined that hundreds of individuals were simultaneously claiming to be living in the same one bedroom apartment; or that hundreds of others claimed to be living simultaneously at the same, nonexistent addresses.
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Moreover, alien criminals and terrorists manipulate the benefit application process to facilitate expansion of their illegal activities, such as crimes of violence, narcotics trafficking, terrorism, and entitlement fraud. For example, Mir Aimal Kansi, the Pakistani terrorist wanted in connection with the Central Intelligence Agency Headquarters shootings, had been issued two employment authorization documents: one after having applied for political asylum; and, one after having applied for legalization. The nexus between criminal activity and benefit fraud is also evident in the cases of suspected Russian organized crime figures who are the beneficiaries of L1 (Intra-company transferee) petitions filed by non-existent or non-operating businesses.
PAST INS ANTI-FRAUD EFFORTS
The investigation of immigration fraud has long been an enforcement mandate of the Investigations Division of the INS. Under the Investigations Case Management System, inaugurated in 1983, emphasis was placed on identifying, developing, and prosecuting cases against fraud facilitators involved domestically or on foreign soil in the sale, distribution, manufacture, or alteration of fraudulent documents, and those who broker illicit services to aliens, such as sham marriages, fictitious job offers, and bogus investment schemes.
The passage of the Immigration Reform and Control Act of 1986 (IRCA) and the Immigration Marriage Fraud Amendments Act greatly expanded the INS' obligations to detect and deter fraud during the legalization process, the employment eligibility verification process, and the acquisition of legal benefits through spousal and fiance(e) relationships. To counter the escalating incidence of IRCA-related fraud, the INS in 1988 included the detection and deterrence of fraud among its top priorities. Exclusive of the traditional types of immigration fraud such as marriage and other relationship fraud and occupational preference fraud, Investigations' responsibilities with regard to IRCA fraud alone were extensive. Yet, because of additional responsibilities mandated under the new immigration laws and the Anti-Drug Abuse Acts of 1986 and 1988, the dedication of resources to traditional fraud investigations was severely curtailed.
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A review of statistical data between 1985 and 1996 points out the impact of other Service priorities on the INS fraud program. In 1985, the productive workyears (FTEs) devoted to fraud investigations equated to 256 special agents. With implementation of the Employer Sanctions provisions of IRCA, the special agent equivalent dropped to 201 in 1987 and to 139 in 1988. Between 1989 and 1991 resources devoted to fraud investigations increased. However, in 1992 with the reassignment of 150 special agents to the Violent Gang Task Force (VGTF) initiative of a former Attorney General, the special agent equivalent dropped significantly again from 231 to 210. With the redirection of manpower to the incarcerated criminal alien removal program and insufficient base funding, these numbers dropped to 181 in 1995 and to 139 in 1996.
In 1985, INS Investigations received 15,171 fraud cases and completed 11,316. In 1987, receipts dropped to 6,880 cases and completions fell to 6,536. In 1988, receipts stood at 6,266 with completions at 5,741 cases. The decline in receipts was attributable to the fact that a field office would not receive and open cases that the office did not have the resources to work and to the fact that other INS components were reluctant to refer suspected fraud cases to field Investigations offices that did not have sufficient resources to conduct the necessary investigations.
In 1995, servicewide, Investigations received 13,524 cases and completed 6,455. Investigations completed this task with 181 investigators, fewer than the number available in 1985. Considering only active cases received, investigators completed 47 percent of their work, which left 53 percent not completed. In 1996, receipts amounted to 8,514 fraud cases, but inadequate resources resulted in the completion of only about 50 percent (4,366) of such cases. Other investigative activities such as Anti-smuggling, Organized Crime Drug Enforcement Task Force, and Violent Gang Task Force do a significant amount of fraud work. However, this fraud work is tracked as other than fraud and, therefore, is not included in INS fraud statistics.
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The Immigration Examinations Fee Account (EFA), which authorizes the Attorney General to use examinations fees collected by the INS to pay for processing applications and petitions under the INA, was established by the Department of Justice Appropriations Act of 1989. In March 1992, Congress approved the reprogramming of 100 permanent INS Investigations positions to be funded by the EFA. The 100 positions were dedicated to the conduct of fraud investigations in support of the Adjudications and Naturalization programs. These benefit fraud investigations target single issue fraud schemes, as well as major fraud facilitator conspiracies and large-scale fraud organizations, such as marriage fraud rings.
In 1993, as part of a comprehensive political asylum reform initiative, the INS established a fraud task force aimed at curbing abuse of the Asylum program. The task force mounted a two-pronged crackdown on fraudulent asylum applications, designed to locate unscrupulous preparers of abusive asylum applications, pursue possible criminal prosecutions and impose fines under the Civil Document Fraud provisions of the Immigration and Nationality Act (INA). Asylum fraud cases targeted aliens and United States citizens engaged in individual or group schemes to obtain work permits for aliens by filing fraudulent asylum applications. Together with the legislative changes and the successful fraud conspiracy prosecutions of facilitators, a notable decrease in the number of filings of fraudulent asylum applications occurred.
During FY 1996, the INS presented for prosecution an impressive number of cases involving federal criminal violations directly related to fraud investigations. These cases included individual violations of Title 18 USC §1001, making a false statement or writing (1429); Title 18 USC §1028, possessing identity documents to use falsely (4563); Title 18 USC §1543, using a forged or altered passport (267); Title 18 USC §1544, misusing a passport (441); Title 18 USC §1546, making, altering, or selling false INS documents (116); Title 18 USC §1546, using or possessing false INS documents (1031); Title 18 USC §371, conspiring to commit an offense or defraud (504); and Title 18 USC §911, making false claims to United States citizenship (7130).
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CURRENT INS ANTI-FRAUD EFFORTS
Although not currently a stand-alone priority of the INS, fraud detection and deterrence is an important component of a Fiscal Year 1997 (FY) priority called ''Improve Adjudicative Services''. In accordance with this priority, the INS implemented a joint application fraud initiative coordinating the INS Offices of Investigations and Benefits. The INS dedicated its enforcement efforts to improving its focus on application fraud by using cross- discipline fraud teams, streamlined fraud indicators, and standardized referral procedures. The initiative further calls for the initiation of three pilots, one per region, in cooperation with the respective INS service center, to conduct one large-scale application fraud case by each pilot. Implementation of the initiative is currently under way. The Service Centers now handle 57 percent of the applications adjudicated by the INS. Additionally, each service center has an operations unit that focuses on detecting document and benefit fraud.
Each service center will continue to develop new and/or update existing fraud indicators for use in identifying major application fraud conspiracies. The service centers will refer relating suspect applications and petitions to the appropriate district office for analysis and consideration of investigation.
Following the investigation, the pilot district shall refer the investigative findings and the relating applications back to the requesting service center, which will then complete the adjudication of the suspect applications/petitions and place in removal proceedings beneficiaries/applicants of fraudulent petitions/applications.
Page 30 PREV PAGE TOP OF DOC Each pilot office will establish a local fraud team consisting of district adjudications officers, Examinations Fee Account special agents and/or special agents. Fraud team members shall be drawn from the existing workforce, as no additional appropriation has been provided.
The INS shall monitor productivity of the fraud teams and analyze data on fraud trends. The effectiveness of the initiative will be instrumental in determining whether or not fraud deterrence should become a stand-alone priority of the INS in fiscal year 1998.
Additionally, the INS has developed a flagging project that, when implemented, will alert INS personnel to possible fraudulent applications and fraud schemes. The flagging project relies upon the interface between two INS databases, the Central Index System (CIS) and the National Automated Immigration Lookout System (NAILS) to update the CIS records with a corresponding NAILS flag that alerts users that there is additional information in the NAILS record. NAILS contains information of persons of interest to INS and other federal agencies for law enforcement purposes. At present, the database contains thousands of records that are identified as persons inadmissible to the United States or ineligible to receive immigration benefits because they are criminals, deported aliens, terrorists, or illegally in the United States. CIS contains current status and historical information on persons of interest to the INS and acts as an index system. When fully implemented the flagging project will encompass those fraudulent records in CIS that involve the illegal purchase of genuine INS documents from INS employees, and those involving the payment or bribe to an INS employee in return for favorable action.
CURRENT RESOURCES TO COMBAT FRAUD
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Currently, the Examinations Fee Account (EFA) authorizes funding for 100 special agents. This funding, however, is not adequate to fully cover the cost of conducting benefit fraud investigations. The annual modular cost to the Investigations Program for one special agent is $142,105. Thus while 100 special agents are authorized to be funded from the EFA, the $9,633,488 available from the EFA for 1997 provides funding for only 84 special agents, 6 supervisory special agents, and no clerks. The Office of investigations has recommended a restructuring of the EFA so that funding coincides with workload and case cost, and a yearly review of the EFA to ensure that funding, once adjusted, continues to match case cost and workload. Projections for fiscal year 1997 indicate that investigative time devoted to fraud investigations will be very close to the fiscal year 1996 level of 165 workyears.
IMPACT OF ILLEGAL IMMIGRATION REFORM AND IMMIGRANT RESPONSIBILITY ACT OF 1996 (IIRIRA) ON FRAUD
The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (IIRIRA) carries enhancements which will be helpful in combating fraud as it relates to immigration. Several sections increase criminal penalties; thereby enhancing deterrence as well as increasing the likelihood of prosecution of crimes relating to fraud activities.
IIRIRA has increased criminal penalties for fraudulent use of government-issued documents; knowingly presenting a document which fails to contain a reasonable basis in law or fact; and for voting by aliens in a Federal election. IIRIRA has also created new document fraud offenses and added civil penalties for document fraud. Under IIRIRA, fraudulent activities punishable under specific sections of Title 18 United States Code, in relation to the issuance or use of a passport or visa, can result in a criminal forfeiture order for a conveyance or property, either real or personal, which was derived from proceeds or used to facilitate the fraud. These penalties will allow the Service to enhance its ability to bring criminal cases while providing a mechanism for punishing those who might not ever be brought to criminal trial, through civil penalties.
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As well as the increased penalties and punishments noted above for document fraud, IIRIRA will allow the Service to more effectively combat benefit fraud. The addition of a criminal penalty for ''failure to disclose role as preparer of false application for immigration benefits'' acknowledges the role of those unscrupulous individuals who would flaunt our laws for personal gain. The criminal penalties put in place by IIRIRA for false claims to United States citizenship in procurement of employment or governmental benefits is a powerful means to combating benefit fraud as well and where cases can be proven the Service will prosecute.
IIRIRA also authorizes the Service to utilize the investigative and prosecutorial strengths of the RICO statutes and the investigative technique of ''wire taps'' in pursuing fraud crime. These two major investigative tools added to the authority to subpoena records and persons in fraud cases as an investigative tool will greatly enhance the Service's arsenal in deterring and prosecuting fraud violations.
The nation's right to determine who may cross its borders, and preserving the integrity of that process, is defended by fraud investigations. INS controls the admission of aliens to the United States. The pervasive fraud which exists reflects the continuing desire of foreign nationals to emigrate to the United States by any means possible. Discouraging immigration fraud and protecting the integrity of INS benefits and documents legitimately provided to authorized aliens continues to be an INS priority. Special Agents continue to vigorously pursue counterfeit document manufacturers, vendors, and INS benefit fraud facilitators.
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The following cases represent the range of INS fraud investigations conducted at a single INS district office during the past eighteen months. They indicate the broad spectrum of fraud being perpetrated on INS, as well as the ingenuity and flexibility of aliens and those facilitators and attorneys providing fraudulent services to aliens.
An upstate New York bodega owner, who was to become a U.S. citizen only one day after his arrest, was charged with visa fraud and conspiracy. NY investigators acted on a tip from the U.S. Postal Service that packages containing spurious sheets of green cards, Social Security cards and laminates were being delivered to the store via a Los Angeles connection. A controlled delivery was made, and subsequent search and arrest warrants were executed. During the search, dozens of fraudulent cards and laminates were discovered. The owner's naturalization application was pulled immediately after his arrest, and pending the outcome of the government's case against him, deportation proceedings will be initiated. The owner's brother was also arrested in the operation. In December 1996, NY INS agents flew to California to arrest the lawful permanent resident who had sent the fraudulent cards to the New York vendor, for visa fraud, conspiracy and mail fraud. A consent to search was authorized, and agents recovered phone records documenting ties to the New York owner.
Page 34 PREV PAGE TOP OF DOC This operation involved a document vendor whose modus operandi was to establish a business, and then send out scouts to recruit illegal aliens who wanted to purchase fraudulent documents or to file fraudulent paperwork with INS. The vendor charged $250 for a bogus green card/Social Security Card package; $6,000 for fraudulent filing Adjustment of Status packages; and $500 for filing false political asylum applications. The sole reason for filing false paperwork with INS was to obtain legitimate employment authorization while the application was pending. The arranger would periodically shut the business down and open up elsewhere under a new name. This vendor had been in operation for over three years, and had established at least four businesses in 1996 alone. Three persons were arrested in this operation, and all have plead guilty.
A Queens-based counterfeit document ring, whose members used bicycles to hand off orders in an attempt to avoid pursuit by federal investigators, was recently broken up by New York agents. The ring supplied counterfeit sets of green cards and Social Security Cards to unauthorized aliens who used the documents to work illegally. The customers paid $100 per set of cards, after providing a photo and the biographical data to be printed on the cards. New York investigators utilized bicycles to follow the couriers of the fraudulent cards to detect the actual location where the cards were being manufactured. A search warrant was executed and the subsequent arrests of two co-conspirators followed. Over 100 sheets of documents were recovered, along with the seizure of a camera, typewriter, and two laminating machines used to create the cardsas well as a bicycle used by one of the couriers. Two arrest warrants remain outstanding, and agents believe that two subjects have fled the United States.
Page 35 PREV PAGE TOP OF DOCWEST AFRICAN TASK FORCE
Based on analytical comparisons through the INS Forensic Document Laboratory's Document Link Identification System, a new type of fraudulent document-producing machine was discovered which manufactured spurious I551s (green cards) which were then distributed in the New York area for $500. Working with the U.S. Secret Service's West African Task Force, NY Investigations located, arrested, and indicted the distributor of the documents.
A Brooklyn-based fingerprint/immigration assistance agency has served as a sophisticated front for an illicit operation which deliberately filed I485 Adjustment of Status Applications without any of the required supporting documentation necessary for applicants to legitimately apply for a government issued work card. The New York District's employment authorization unit alerted Investigations after noting that numerous individuals were filing for work authorization without the required documents substantiating a legitimately pending I485 application. The owner of the business was recently arrested on fraud charges.
OPERATION VULTURE NEST
A Manhattan-based attorney was arrested and charged with conspiracy to defraud INS after a 15-month investigation based on the attorney's alleged scheme to file fraudulent employment-based green card applications with inflated company figures. The reason for inflating the figures (which included the number of employees, the year in which each company was established, as well as the gross and net annual company income) was to make INS believe the companies were more lucrative than they actually were. The attorney included fraudulent documentation with the applications, including fraudulent tax returns and company stock certificates. He was arraigned and released on bond. The case was opened after a referral from the Vermont Service Center (VSC).
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An upstate-New York agency legitimately operated as a money order/phone center/fingerprint/immigration assistance business. But, behind the scene, they provided fraudulent supporting documentation for non-existent I485s (Adjustment of Status applications) in support of I765s (Applications for Work Authorization). The district's employment authorization unit alerted Investigations after numerous applicants submitted identical photocopies of a single INS cash register receipt. The receipt serves as proof that an alien has filed a legitimate adjustment of status application. Enough information was gleaned by NY investigators to justify a search and arrest warrant against the owner and her company. She was subsequently arrested and is currently awaiting trial.
In a case so prominent that it was featured in The Washington Post last November, a Manhattan-based attorney and three of his clients were targeted in an international plot to fly United States citizen women to Bangladesh to engage in sham marriages to Bangladeshi men willing to pay $30,000. This arrangement ultimately enables the groom to obtain permanent residence in the United States. For two years, the NY INS office has been working closely with the U.S. Department of State in this investigation. Three of the four subjects have already been arrested (including the attorney). The primary subject, however, absconded when he became aware that INS had arrested his three coconspirators.
OPERATION GOLF CLUB
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A fraud ring consisting of marriage arrangers has orchestrated approximately 300 suspected fraudulent marriages to secure permanent residence for men from Egypt, Morocco, Lebanon, Algeria, Jordan, and China. NY investigators, working with Boston, Newark, and Providence agents, arrested nine individuals, including a United States citizen attorney. All five defendants arrested in New England have pled guilty, while the trial for the remaining four defendants arrested in New York and New Jersey has been set for June 10, 1997.
Political asylum cases are sensitive in nature, as applicants are seeking refuge in the United States for fear of persecution in their homelands. Those who commit asylum fraud take away from legitimate asylum seekers in that they serve to clog the system and create tremendous backlogs on the interview calendar. NY Investigations takes asylum fraud very seriously, and Operation Cypher is turning out to be a major victory in combating such fraud. Five arrest warrants have been issued, and four individuals have been taken into custody, with the last subject remaining a fugitive. In September 1996, three of the subjects were indicted, including a Manhattan-based attorney, who filed hundreds of bogus, boiler-plate asylum applications for profits ranging from $300 to $800 per application.
This operation saw the arrest of an immigration attorney, and three of his associates on charges that they prepared and filed thousands of fraudulent political asylum applications, labor certifications, nonimmigrant visa applications, and suspension of deportation cases. Expelled from practicing law in New York, the attorney had continued to practice law under the auspices of another attorney to whom he sold his law firm.
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Three prominent New York attorneys and two of their secretaries were arrested for participating in the prolific scheme of filing over 1,500 fraudulent asylum applications. One attorney has pled guilty to conspiracy to file fraudulent INS applications, and the two other attorneys have pled guilty to conspiracy to defraud the United States, conspiracy to file fraudulent INS applications, and to knowingly and willfully concealing a material fact/false statements.
OPERATION INDIAN TRAIL
Nine individuals have been arrested in this H1B (temporary work visa) fraud/smuggling operation involving hundreds of aliens smuggled into the United States. Fronting as a legitimate investment firm from the former Soviet Union, the proprietors of the operation filtered H1B applications through the Vermont Service Center, ultimately obtaining temporary work permits for illicit applicants. With work permits, beneficiaries could then seek employment anywhere without suspicion from employers. The last of the nine subjects was arrested in April 1996. Eight of the nine have already pled guilty to charges ranging from fraudulent statements; conspiracy; visa fraud; establishing a commercial enterprise evading immigration laws; and smuggling. One subject remains a fugitive from justice.
NY investigators focused on this group of individuals who smuggled females out of the former Soviet Union and into the United States, where they were put to work as domestics for U.S. families. The women entered the United States with B2 visas obtained by fraudulent statements, but surrendered their passports to the smugglers upon entry into the country. The smugglers held the women's passports for ransom until each woman paid a smuggling fee of between $2,000 to $2,500. Three principals have been arrested, and two have already pled guilty to alien smuggling charges. Charges are still pending against the third.
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New York INS agents, in conjunction with the U.S. Department of State, have uncovered an operation which has been exploiting the State Department's DV1 Diversity Visa Lottery Program. Under the program, natives of certain countries are allowed to file for permanent residence, but each applicant may only file one application. Three subjects of this investigation have filed over one hundred applications for the program by utilizing different names. To date, two of the subjects have been arrested.
This large-scale investigation broke up a network which was involved in passport, marriage, and legalization fraud. Thus far, six co-conspirators have been arrested, and execution of a search warrant has resulted in the seizure of thousands of fraudulently-prepared immigration documents. This ring had fraudulently obtained lawful permanent resident status for two aliens recently convicted on charges of terrorism.
INSERT OFFSET RING FOLIOS 1 TO 3 HERE
Mr. SMITH. Mr. Yates, I understand you have a short statement as well.
STATEMENT OF WILLIAM A. YATES, DIRECTOR, VERMONT SERVICE CENTER, IMMIGRATION AND NATURALIZATION SERVICE
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Mr. YATES. Yes, Mr. Chairman.
Thank you, Mr. Chairman, and members of the subcommittee, for the opportunity to appear before you today to discuss this important issue.
Immigration benefit fraud has increased dramatically both in scope and complexity in recent years. As INS has increased enforcement pressure at borders, at ports of entry, and at worksites, aliens have resorted to benefit application fraud as an alternative means to enter and remain in the United States. Although immigration fraud is certainly not new, the large volume of fraud, the complexity of the fraud schemes, and the exploitation of the benefit application process by criminals and criminal organizations are reasons for serious concern. Benefit fraud is a particularly attractive approach for entry into the United States because it provides aliens with valid documents although illegally obtained.
The Vermont Service Center has uncovered several large-scale fraud conspiracies during the past few years involving employment authorization fraud, nonimmigrant worker fraud, and marriage fraud. In addition, we have seen growing requests for replacement of the I551 alien registration cards filed by impostors. These fraud schemes have involved from a handful to over 15,000 individual filings.
One such fraud pattern recently identified involves fraudulent marriages. Petitions to classify status of alien relatives are filed at the center, ostensibly by the U.S. citizen spouse. Generally, the documentation supporting the petition is valid, meaning that the U.S. birth certificates and the marriage certificates are valid documents. In fact, these petitions are usually well prepared and well documented.
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We were alerted to this scheme by one of our officers who recognized the same photograph appearing on two separate spouse petitions. To combat this fraud scheme, the Vermont Service Center has obtained headquarters support for a task force approach and agreed to provide investigative support and coordination to an interagency initiative.
In 1994, adjudications officers encountered a sudden increase in the L1 nonimmigrant worker petitions filed by Russians. Although the initial petitions were poorly prepared and resulted in denials and rejected submissions, the preparation of petitions quickly improved. Consultations with the Department of State, the Federal Bureau of Investigation, and the INS Organized Crime Drug Enforcement Task Force Office in Miami led to identification of suspected members of Russian organized crime. The L1 petitions were filed to establish a base for illicit operations in the United States. Because the L1 petition permits even a small entity to establish a new office within the United States, it is a common vehicle for members of organized crime to gain entry into the United States.
The Vermont Service Center officers are also witnessing a steady flow of I90 applications for replacement of alien registration cards where careful examination reveals the applicant to be an impostor. The impostor application will generally have all the correct biographical data to match the INS record, but the photograph belongs to a different individual.
At the present time we do not have a methodology to guarantee that impostors will be detected. Our systems are not available to match biometrics on each and every application and each and every applicant.
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The key to effective enforcement of the Immigration and Nationality Act is a comprehensive strategy which balances border enforcement and interior enforcement. We cannot effectively deter illegal immigration solely by strengthening the Border Patrol, although the properly equipped and staffed Border Patrol must be a critical element in this strategy. Nor can we expect to maintain integrity in our adjudicative processes without giving appropriate attention to the investigation of benefit application fraud.
Mr. Chairman, this concludes my formal statement. I will be happy to take questions.
Mr. SMITH. Thank you.
[The prepared statement of Mr. Yates follows:]
PREPARED STATEMENT OF WILLIAM R. YATES, DIRECTOR, VERMONT SERVICE CENTER, IMMIGRATION AND NATURALIZATION SERVICE
Thank you Mr. Chairman, and Members of the Subcommittee, for the opportunity to appear before you today to discuss this important issue. Immigration benefit fraud has increased dramatically both in scope and complexity in recent years.
I have been with the INS for over 23 years and have served the INS in a number of law enforcement positions during that time. As INS has increased enforcement pressure at the borders at ports of entry and at work sites, aliens have resorted to benefit application fraud as an alternative means to enter and remain in the United States. Although immigration fraud is certainly not new, the large volume of fraud, the complexity of the fraud schemes, and the exploitation of the benefit application process by criminals and criminal organizations are reasons for serious concern. Benefit fraud is a particularly attractive approach for entry into the United States because it provides aliens with valid documents although illegally obtained.
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My remarks today will focus on two areas of immigration fraud encountered by officers at the Vermont Service Center (VSC): benefit application fraud, and document fraud. The VSC has uncovered several large-scale fraud conspiracies during the past few years, involving employment authorization fraud, non-immigrant worker fraud, and marriage fraud. In addition, we have seen a growing trend of requests for replacement of I551 alien registration cards filed by impostors. These fraud schemes have involved from a handful to over 15,000 individual filings.
One such fraud pattern recently identified involves fraudulent marriages. Petitions to classify status of alien relatives are filed at the Center, ostensibly by the United States citizen spouse. Generally, the documentation supporting the petition is valid, meaning that the U.S. birth certificate is valid as is the marriage certificate. In fact, these petitions are usually well-prepared, and well-documented. We were alerted to the scheme by one of our officers who recognized the same photograph appearing on two separate spouse petitions. After the identification of our original bigamist, we initiated a search of our records for evidence of other bigamists. Additional discoveries occurred including examples where the U.S. citizen petitioner on one spouse petition became the alien beneficiary on another petition. Our examination of pending petitions led to discoveries of situations where individuals married and filed petitions on behalf of numerous spouses, each time assuming a different identity. One petitioner has been identified as having filed twenty-five petitions for twenty-five different spouses. The scheme does not end with the filing of the petition because the alien must obtain conditional residence, then two years later must file for removal of those conditions. Evidence has been uncovered of petitioners and beneficiaries developing credit and document histories to establish the longevity and validity of relationships with multiple partners. To combat this fraud scheme, the VSC obtained Headquarters support for a task force approach and agreed to provide investigative support and coordination to an intra-agency initiative. The VSC developed an action plan which clearly stated agency goals to identify, investigate, and prosecute the principals, to seize assets where appropriate, and to deny benefits to those who defrauded or sought to defraud the United States. This is an ongoing criminal investigation supported by seven INS district offices.
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In 1994, adjudications officers encountered a sudden increase in L1 non-immigrant worker petitions filed by Russians. Although the initial petitions were poorly prepared and resulted in denials and rejected submissions, the preparation of petitions quickly improved. Consultations with the Department of State, the Federal Bureau of Investigation, and the INS Organized Crime Drug Enforcement Task Force of lice at Miami led to identification of suspected members of Russian organized crime. The L1 petitions were filed to establish a base for illicit operations in the United States. Because the L1 petition permits even a small entity to establish a new office within the United States, it is a common vehicle for members of organized crime to gain entry into the United States. The approach used by the Russians was to create shell corporations then sell the use of the company, enabling individuals to petition for themselves as L1 intra-company transferees. We identified over 200 shell companies and 350 individuals who were the petitioned to work in these non-existent entities.
Immigration fraud was merely a vehicle for criminal enterprises to gain a foothold in the United States, as their primary purposes were illegal firearms sales, operation of chop shops, counterfeit document sales, drug sales, and extortion. The impunity with which this group operated is illustrated by one member's filing of a I129 extension request as an intracompany transferee while incarcerated following a felony conviction.
Operation Foxhunt was an investigation into large-scale employment authorization and political asylum fraud. The VSC identified, through computer-assisted link analysis, approximately 2500 boilerplate asylum applications prepared at one location in New York. The VSC ultimately denied all 2500 fraudulent requests. Agents from INS' NYC district of lice successfully prosecuted the preparer for visa fraud.
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VSC officers are also witnessing a steady flow of I90 applications for replacement of alien registration cards (green cards) where careful examination reveals the applicant to be an impostor. The impostor application will generally have all the correct biographical data to match the INS record, but the photograph belongs to a different individual. At the present time we do not have a methodology to guarantee that impostors will be detected. Our systems are not able to match biometrics at this time, and even comparing an application to existing electronic and paper files often provides inconclusive results.
The key to effective enforcement of the Immigration and Nationality Act is a comprehensive strategy which balances border enforcement and interior enforcement. We cannot effectively deter illegal immigration solely by strengthening the Border Patrol, although a properly equipped and staffed Patrol must be a critical element in our strategy. Nor can we expect to maintain integrity in our adjudicative processes without giving appropriate attention to the investigation of benefit application fraud.
Effective deterrence of benefit application fraud requires continual advancements in systems technology, sufficient resources at service centers and district offices, and clear articulation of agency objectives in the conduct of fraud conspiracy investigations.
Mr. Chairman, this concludes my formal statement on benefit application fraud. I would be happy to answer any questions, which you and Members of the Subcommittee may have.
Mr. SMITH. Mr. Bromwich.
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STATEMENT OF MICHAEL R. BROMWICH, INSPECTOR GENERAL, DEPARTMENT OF JUSTICE
Mr. BROMWICH. Mr. Chairman and members of the subcommittee, I appreciate this opportunity to appear before the subcommittee to discuss fraud associated with immigration documents and benefits. In 1996, my office issued a report detailing our findings that INS did not take action against aliens who were involved in fraudulent document schemes. I have been asked by you to summarize that report, and I would also like to briefly describe the Office of Inspector General's role in detecting and investigating immigration document fraud.
Document fraud involves many different types of illegal conduct and participants. It involves aliens who provide false information to obtain a genuine INS document or who use counterfeit INS documents knowing them to be counterfeit. It involves vendors who sell counterfeit documents or facilitate the theft and transmission of documents to aliens, and it involves corrupt INS employees who sell genuine documents or take bribes to make fraudulent entries in INS electronic record systems.
As a general rule, most document fraud that is uncovered is investigated by INS. However, those cases that involve INS employee corruption are the primary responsibility of the OIG, although INS and the FBI participate in such investigations from time to time.
The OIG has successfully investigated document fraud schemes involving high-level INS officials and schemes involving thousands of dollars in bribes. For example, in 1996, the INS Assistant District Director for Examinations in the New Jersey district was convicted on numerous charges arising out of a document fraud scheme following a joint OIGFBI investigation. He was sentenced to 41 months' incarceration, 3 years' probation, and a fine.
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In 1994, the Deputy Assistant Director for Examinations in the San Francisco district office was convicted for selling green cards for thousands of dollars. He was sentenced to 30 months' incarceration, probation, and a fine. The cases in which such high-ranking INS officials are involved in such corruption are relatively rare.
We also encounter such fraud at lower levels in INS. For example, in another OIG case, an INS supervisory mail clerk was convicted, also in 1996, for accepting thousands of dollars in return for entering fraudulent information on over 300 aliens into INS' central computer system to make it appear that the aliens were lawful permanent residents. Some of these aliens were known Asian organized crime figures.
Criminal investigations, prosecutions and substantial prison sentences are essential to deter other INS employees who might be tempted by the lure of corruption. The experience and expertise of OIG investigators make my office uniquely suited to conduct these complex and important investigations.
When document fraud investigations prove successful, the Government establishes prosecutive priorities. The Government prosecutes the vendors of the documents, the middlemen who pay the bribes, and any corrupt INS employees who accepted bribes. If the vendors and middlemen are illegal aliens, deportation proceedings are usually initiated against them.
We agree these are the correct and prosecutive priorities. Corrupt INS employees must be rooted out as swiftly and punished as severely as possible and that is properly given the highest priority. The same is true for the vendors and middlemen who profit from the understandable appetite of aliens for the social and economic benefits of legal immigration status. Based on work we have done over the years, however, we were uncertain what, if anything, INS did with the aliens who benefited from these illegal document schemes. Not the INS employee, not the middlemen or vendor, but the aliens who enjoy directly the fruits of the fraudulent schemes. Consequently, in 1995, the OIG's inspections division examined INS' handling of aliens who obtain immigration documents by fraudulent means.
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We found in that inspection that INS took no action whatsoever against these aliens. Not only did INS not seek to prosecute or deport them, but it had no method of even flagging the names or A-numbers of the aliens in the INS' record systems. Consequently, these aliens were free to continue to obtain the benefits of the illegal schemes and even use one illegally obtained benefit to obtain additional benefits.
To conduct our review, we collected a sample of 36 cases involving document fraud to analyze carefully. These cases revealed specific information on over 2,400 aliens who had benefited from document fraud schemes, including several individual cases that each had hundreds of aliens identified by name or A-number. We found no evidence that INS had attempted to pursue any of the aliens who benefited from the document fraud. More disturbingly, we found INS made no effort to deprive these aliens of their ill-gotten benefits.
In addition, we also held discussions with many INS officials. Our discussions and inquiries with INS officials and employees both in headquarters and the field confirmed that INS investigators usually do not attempt to locate aliens identified as participants and beneficiaries of fraud schemes. In addition, neither INS investigators nor other INS officers initiate deportation proceedings against these aliens.
INS officers cited a number of reasons to us for not pursuing and deporting these aliens. These reasons included INS investigative priorities, lack of resources, lack of detention space, and an overloaded and underfunded deportation system.
In our judgment, the reasons INS officers gave for not pursuing aliens may have some force, but they do not justify INS' total lack of action in this area. In particular, efforts should be made to locate and apprehend aliens who pay a bribe or knowingly buy false or stolen documents using information developed in document fraud investigations. Once these aliens are found, efforts should be made to deport them. In the absence of this deterrent, these aliens are taking virtually no risk in seeking to obtain immigration benefits fraudulently.
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In our inspections report, we also recommended that INS correct fraudulent database entries and develop a flagging system that would alert personnel to aliens who had been identified as participants in fraud schemes. INS has had no systems for placing codes or flags into INS data bases to alert INS officers who subsequently come into contact with these aliens.
The consequences of INS' failure to develop such a system is significant. If the aliens are not removed from the United States, if fraudulent record system entries are not corrected and alerts posted to an INS database, and if fraudulently obtained genuine INS documents are not reclaimed, the aliens not only retain their fraudulently obtained immigration rights but also may be able to obtain additional benefits. These include the right to live in the United States as a permanent resident; to leave and reenter the United States; to work; to petition to bring in relatives as lawful permanent residents; and to become U.S. citizens.
In addition to the benefits obtained from INS, there are possible additional financial costs to the taxpayer. Federal, State, and local agencies use information obtained from INS data bases to determine an alien's eligibility to receive benefits from many Federal, State, and local programs. Although illegal aliens are not eligible for most Federal benefit programs, an alien could receive such benefits if the alien's status has been fraudulently entered in the INS database, as though he or she was a legal immigrant. So could the alien's spouse and children. Once the document fraud has been committed or the data entry made, the alien and alien's family members can obtain benefits for as long as they remain in the country. If the alien later petitions to bring a family member into the United States as a lawful permanent resident, the original fraud will be compounded.
Page 50 PREV PAGE TOP OF DOC INS employees have acknowledged the need to delete or correct fraudulent records, particularly in the Central Index System, which is the INS-wide electronic database which contains data on all aliens who have been assigned A-numbers since 1960. On several occasions, INS personnel have unsuccessfully sought to remedy the problems associated with the lack of an INS-wide alert system, and those are detailed in my prepared testimony.
Mr. SMITH. Thank you. Is that the end of your testimony?
Mr. BROMWICH. I have more, but I will be happy to cut it short.
Mr. SMITH. If you wouldn't mind. You hesitated and I wasn't sure if that was the end.
[The prepared statement of Mr. Bromwich follows:]
PREPARED STATEMENT OF MICHAEL R. BROMWICH, INSPECTOR GENERAL, DEPARTMENT OF JUSTICE
Mr. Chairman and Members of the Subcommittee, I appreciate the opportunity to appear before the Subcommittee to discuss fraud associated with immigration documents and benefits. In 1996, my office issued a report detailing our finding that INS did not take action against aliens who were involved in fraudulent document schemes. I have been asked by the Subcommittee to summarize that report, and I would also like to briefly describe the Office of the Inspector General's (OIG) role in detecting and investigating immigration document fraud.
Page 51 PREV PAGE TOP OF DOCOIG ROLE IN INVESTIGATING FRAUD
Document fraud involves many different types of illegal conduct and participants, from alienswho provide false information to obtain an INS document; to vendorswho sell counterfeit documents; to corrupt INS employeeswho sell genuine documents or take bribes to make fraudulent entries in INS electronic record systems.
As a general rule, most document fraud that is uncovered is investigated and combatted by INS. However, those cases that involve INS employee corruption are the primary responsibility of the OIG, although either INS or the Federal Bureau of Investigation may also participate in such investigations.
The OIG has successfully investigated document fraud schemes involving high-level INS officials and schemes involving thousands of dollars in bribes. For example, in 1996, the INS Assistant District Director for Examinations in the New Jersey District was convicted on numerous charges arising out of a document fraud scheme following a joint OIG/FBI investigation. He was sentenced to 41 months' incarceration, 3 years' probation, and a fine of $20,000. An INS supervisory mail clerk was convicted in 1996 for accepting thousands of dollars in return for entering fraudulent information on over 300 aliens, some of whom were known Asian organized crime figures, into INS' central computer system to make it appear that the aliens were lawful permanent residents. In 1994, the Deputy Assistant District Director for Examinations in the San Francisco District Office was convicted for selling green cards for thousands of dollars. He was sentenced to 30 months' incarceration, 3 years' probation, and a fine of $10,100.
These investigations, prosecutions, and substantial prison sentences are essential to deter other employees who might be tempted by the lure of corruption. The experience and expertise of OIG investigators make this office uniquely suited to conduct these complex and important investigations.
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INSPECTION OF DOCUMENT FRAUD RECORDS CORRECTIONS
When document fraud investigations are successful, the government usually prosecutes the vendors of the documents, the middlemen who paid bribes, and any corrupt INS employees who accepted bribes. If the vendors and middlemen are illegal aliens, deportation proceedings are usually initiated against them.
We agree that these are the correct investigative and prosecutive prioritiescorrupt INS employees must be rooted out as swiftly and punished as severely as possible. The same is true for the vendors and middlemen who profit from the hunger of aliens for the social and economic benefits of legal immigration status. Based on the work that we have done over the years, however, we were uncertain what, if anything, INS did with the aliens who benefitted from these illegal document schemes. Consequently, in 1995, the OIG's Inspections Division examined INS' treatment of aliens who obtained immigration documents by fraudulent means.
We found that INS took no action whatsoever against these aliens. Not only did INS not seek to prosecute or deport these aliens but it had no method of even flagging the names or A-numbers of the aliens in INS' record systems. Consequently, these aliens were free to continue to obtain the benefits of the illegal schemes and even to use one illegally obtained benefit to obtain additional benefits.
We conducted our review using cases involving corrupt INS officials because of the serious nature of these types of cases and because it allowed us to use our own OIG data base to obtain information about the aliens. Based on the case tracking records of the OIG Investigations Division and our examination of individual investigative files, we selected a sample of 36 cases involving document fraud to analyze carefully. These cases yielded specific identifying information on over 2,400 aliens who had benefitted from document fraud schemes, including several individual cases that each had hundreds of aliens identified by name or A-number. In INS' New York District Office, for example, we reviewed documentation for three of these cases, two of which involved nearly 600 aliens who had participated as customers and beneficiaries of fraud schemes. We found no evidence that INS had attempted to pursue any of the aliens who benefitted from the document fraud. More disturbingly, however, we found that INS made no effort to deprive these aliens of their ill-gotten benefits.
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In addition to reviewing actual cases, we also held discussions with many INS officials. Our discussions and inquiries with INS officials and employees in headquarters and in the field confirmed that INS investigators usually do not attempt to locate aliens identified as participants in fraud schemes, and neither INS investigators nor other INS officers initiate deportation proceedings against these aliens.
INS officers cited a number of reasons for not pursuing and deporting these aliens, including INS investigative priorities, resources, lack of detention space, and an overloaded and under-funded deportation system.
INS devotes most of its investigative resources and attention to criminal fraud schemes, and within that category vendors and middlemen are the highest priority. The aliens who pay the bribes or knowingly purchase a false or stolen document but who are not the promoters or facilitators of the scheme are relegated to a lower INS priority level, even though they may have substantially benefitted from the fraud scheme. INS managers cited numerous reasons for INS' failure to deport these aliens. First, the lack of detention space to hold the aliens is a severe impediment to successful deportation. INS managers stated that unless the aliens were detained they would probably not be deported. Our 1996 inspection report on deportation supported their contention. The report noted that unless aliens are detained, INS has little success in deporting them. In that inspection, we found that INS removed almost 94 percent of the detained aliens but was able to remove only about 11 percent of nondetained aliens.
In addition, a lack of clerical support to prepare the documentation necessary for deportation and INS-wide pressure to process alien benefit claims as quickly as possible were cited as factors contributing to the failure to deport the aliens.
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In our judgment, the reasons INS officers gave for not pursuing aliens may have some merit, but do not justify INS' total lack of action in this area. In particular, aliens who pay a bribe or knowingly buy false or stolen documents should be sought using identifying information developed in document fraud investigations and efforts should be made to deport them. In the absence of this deterrent, these aliens are taking virtually no risk in seeking to obtain immigration benefits fraudulently.
In the Document Fraud Records Corrections report, we also recommended that INS correct fraudulent data base entries and develop a flagging system that would alert INS personnel to aliens who participated in fraud schemes. INS had no system for placing codes or flags into INS data bases to alert INS officers who subsequently came into contact with these aliens.
The consequences of INS' failure to develop such a system are significant. If the aliens are not removed from the United States, if fraudulent records system entries are not corrected and alerts posted to an INS data base, and if fraudulently-obtained genuine INS documents are not reclaimed, the aliens not only retain their fraudulently-obtained immigration rights, but also may be able to obtain additional benefits. These benefits could include the right to live in the United States as a permanent resident; to leave and reenter the United States; to work; to petition to bring in relatives as lawful permanent residents; and to become United States citizens.
In addition to the benefits obtained from INS, there are possible financial costs to the taxpayer. Federal, state, and local agencies use information obtained from an INS data base to determine an alien's eligibility to receive payments from many federal, state, and local benefit programs. Although illegal aliens are not eligible for most federal benefit programs, an alien could receive such benefits if the alien's status has been fraudulently entered as though he or she were a legal immigrant in the INS data base, as could the alien's spouse and children. Once the document fraud has been committed or fraudulent data entry made, the alien and family members can obtain benefits for as long as they remain in the country. If the alien later petitions to bring a family member into the United States as a lawful permanent resident, the original fraud will be compounded.
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INS employees have noted the need to delete or correct fraudulent records, particularly in the Central Index System (CIS). The CIS is the INS-wide electronic data base that contains data on all aliens who have been assigned A-numbers since 1960. On several occasions, INS personnel have unsuccessfully sought to remedy the problems associated with the lack of an INS-wide alert system. For example, in 1994, INS New York District Office investigators sought permission from Headquarters to delete fraudulent entries from CIS, but their request was denied. Personnel in the INS Records Division, who are responsible for maintenance of the CIS, told us that they believed fraudulent entries should not be deleted because it was important to maintain a history of what had occurred.
The Records Division staff also had received requests from field officers, both investigators and examiners, to place alerts in CIS to indicate fraud. In several instances, field officers created and recorded their own entries into CIS. The entries were inappropriately placed in data fields that have specific alpha/numeric criteria and, as invalid entries, they created problems within the data base. Consequently, the records staff instructed field officers not to make these entries.
In 1992, OIG investigators developed and provided the INS Investigations Division with about 600 names and A-numbers of aliens implicated as customers in two high-profile document fraud investigations. In a memorandum dated December 14, 1992, the Associate Commissioner for Enforcement stated that the Investigations Division would take the lead in developing a coding strategy for these two cases and requested that the Office of Examinations develop procedures to be followed should these people seek additional benefits. However, at the time of our inspection, three years later, no coding strategy or procedures had been developed for these two cases.
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In 1994, another high-profile investigation resulted in the OIG's providing over 1,000 names and A-numbers of aliens to the INS Investigations Division. A special code (SDF for Suspected Document Fraud) was developed to be entered into the CIS identifying individuals involved in this fraud. Procedures for the use of the code were never developed and, therefore, no instructions were ever given to field offices. Ultimately, the SDF code was not used in the CIS.
In summary, although there was a recognition at INS Headquarters and in the field that some kind of flagging system was needed, no such system was ever developed.
Illegal immigration, with its attendant problems, has been a principal reason for the substantial increase in INS resources over the last several years. These increases should enable INS to locate and remove at least some of the aliens identified as participating in fraud schemes and to take actions that prevent others from receiving benefits.
However, as a first step, until they can be removed, the status of these aliens must be accurately reflected in INS' data bases. This action will at least deny the aliens some of the benefits of their document fraud. Last year, in the process of resolving the recommendations made in our documents fraud inspection, INS agreed to establish a flagging system to ensure that beneficiaries of document fraud did not continue to receive benefits as the fruits of their illegal activities. A working group was established within INS to develop operational policies and procedures for a fraud flagging system and INS began working on enhancements to its automated systems.
Page 57 PREV PAGE TOP OF DOC We understand that the working group has completed its draft of operational policies and procedures and they are being coordinated within INS Headquarters. INS is working on the automated systems enhancements and expects them to be completed by the end of July 1997. After the system has been introduced and implemented, we intend to review the actions taken by INS to determine whether the participants in document fraud schemes are in fact being prevented from receiving a continuing stream of immigration-related benefits.
This completes my statement. I would be happy to answer any questions you may have.
Mr. SMITH. Mr. Nelson.
STATEMENT OF BENJAMIN F. NELSON, DIRECTOR, INTERNATIONAL RELATIONS AND TRADE ISSUES, NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIVISION, GENERAL ACCOUNTING OFFICE, ACCOMPANIED BY JAMES M. BLUME, ASSISTANT DIRECTOR
Mr. NELSON. Mr. Chairman, and members of the subcommittee
Mr. SMITH. Just don't hesitate after that red light goes on.
Mr. BROMWICH. What red light?
Mr. NELSON. I am pleased to be here today to discuss our 1996 report on the Department of State's progress in making its visa issuance process more efficient and less vulnerable to fraud. I am joined today by Mr. Jim Blume, who is an expert in INS issues, and he will assist me in responding to your questions on INS issues.
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The State Department is responsible for the issuance and integrity of the world's most sought after identity documents, the U.S. passport and visa. State's visa issuance process is a front line of defense against the use of fraudulent documents to gain entry into the United States.
While not the primary source of illegal immigration, visa fraud is a major concern. In 1996, State processed nearly 8 million nonimmigrant visa applications at over 200 visa issuing posts, thus it is important that State's system work as effectively as possible.
At the time of our review, State's strategy for reducing the potential for visa fraud was to issue visas that are machine-readable, expand automated name check capability to all posts, form so-called lookout committees to identify suspected terrorists and other individuals ineligible for a visa, and to strengthen compliance with management controls.
In May 1996, we issued our report on State's progress on these key initiatives. This was based on work at the Department of State and visits to nine overseas posts. In summary, we found mixed results. While the automation initiatives had progressed, after some delay, operational problems at some locations diminished the effectiveness of these efforts. They included technical problems that limited the availability and usefulness of the automated database, inadequate cooperation by some key U.S. agencies in state's lookout committees, and lack of compliance with management control procedures.
While State has continued to move forward in automating its visa process, a recent report by State's Inspector General concluded that many problems still exist. Mr. Chairman, I would like to give a few examples of what we found during our visits to the visa issuing posts.
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State started the machine-readable visa program in 1989 as its primary initiative for eliminating the use of fraudulent, nonimmigrant visas. The machine-readable visa is considered a more secure document than its predecessor because it is printed on a synthetic material more secure than paper, attached to the passport, and has a machine-readable zone and an encryption code. At the port of entry, the INS and U.S. Customs Service can check names by scanning the machine-readable zone of the visa.
The visa also has a digitized photograph of the traveler. The machine-readable visa, in conjunction with access to State's automated lookout data base known as CLASS (Consular Lookout and Support System), can significantly reduce the vulnerability of the system to fraud. Although most posts had automatic name check capability and machine-readable systems at the time of our review, the technical problems limited their usefulness and availability.
Hosts often experience transmission problems with the telecommunications lines that support the system. This was the case at Mexico City, Sydney, Nairobi, and Seoul. These disruptions resulted in considerable delays in visa issuance and weakened visa control.
For example, during our visit to Mexico City, we noted that consular staff were using the old microfiche system to check names during telecommunications disruptions, rather than using the DNC that was designed as a backup. They used the microfiche system instead of the DNC because it was faster. By doing so, the post ran the risk of approving a visa for an applicant which had recently been added to the CLASS, but not the microfiche system.
Page 60 PREV PAGE TOP OF DOC Mr. Chairman, we also found a lack of full cooperation by some agencies that potentially limited the usefulness of State's lookout committees. In the aftermath of the World Trade Center bombing, State directed all diplomatic and consular posts to form committees with representatives from consular, political and other appropriate agencies to meet regularly to ensure that names of suspected terrorists and other individuals ineligible for a visa are identified and put into the lookout system. Embassy officials at two of the posts we visited questioned the value of the committees because of the lack of cooperation from some agencies.
A number of agency representatives were reluctant to provide the consular sections with the names of suspected terrorists or others the U.S. Government may want to keep out of the country. They attributed their reluctance to the sensitivity of the information and restrictions on information sharing.
Officials from one of the law enforcement agencies we contacted expressed concern that information entered into CLASS could be traced to the originating agency and its work would then be compromised. In addition, not all agencies were represented on the committees.
For example, the committee in Pretoria did not include representatives from the Federal Bureau of Investigation, the Customs Service, or the Drug Enforcement Agency. The committee in Tokyo also lacked key representatives.
In April of this year, State testified that every visa-issuing post now has the machine-readable visa system installed, as well as direct access to CLASS. State also said that it has developed and is now installing a new version of the machine-readable visa system called MRV 2. However, a recently released Inspector General report found that many of the problems remain.
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In May of this year, the Inspector General issued a report which concluded that significant problems still existed in many aspects of the visa issuance process. The report attributed some of the problems to severe staffing shortages and the Bureau of Consular Affairs' failure to address software and hardware problems early in the development of the machine-readable visa program. While recognizing that the new version of the machine-readable visa is designed to correct some of the shortcomings, the Inspector General made a number of recommendations to address other weaknesses in the process.
In closing, Mr. Chairman, the State Department has made progress in automating and modernizing its visa issuing process to reduce its vulnerability to fraud. However, improvements are still needed to better protect the integrity of U.S. entry documents. The IG report raises questions about the extent to which State can today assure itself and the Congress that it is granting visas only to those applicants who are eligible. This concludes my opening statement.
[The prepared statement of Mr. Nelson follows:]
PREPARED STATEMENT OF BENJAMIN F. NELSON, DIRECTOR, INTERNATIONAL RELATIONS AND TRADE ISSUE, NATIONAL SECURITY AND INTERNATIONAL AFFAIRS DIVISION, GENERAL ACCOUNTING OFFICE
Mr. Chairman and Members of the Subcommittee, I am pleased to be here today to discuss our 1996 report(see footnote 1) on the Department of State's progress in making its visa issuance process more efficient and less vulnerable to fraud. The State Department is responsible for the issuance and integrity of the U.S. passport and visa, the world's most sought-after identity documents. State's visa issuance process is the first line of defense against fraudulent entry into the United States.
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At the time of our review, State's strategy for reducing the potential for visa fraud was to (1) issue visas that are machine readable, (2) expand automated name-check capability to all posts, (3) form so-called ''lookout'' committees to identify suspected terrorists and others ineligible for visas, and (4) strengthen compliance with management controls. In May 1996, we issued a report assessing State's progress on these key initiatives based on our work at the State Department and nine overseas posts.(see footnote 2)
In summary, we found mixed results. While the automation initiative had progressed after some delay, operational problems at some locations diminished the effectiveness of these efforts. These include
technical problems that limited the availability and usefulness of the automated data base,
inadequate cooperation by some key U.S. agencies in State's lookout committees, and
lack of compliance with management control procedures.
While State has continued to move forward in automating its visa-issuance process, a recent report by State's Inspector General concluded that many problems still exist.
NATURE OF THE THREAT
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As this Subcommittee is well aware, illegal immigration is a growing and complex problem. The Immigration and Naturalization Service (INS) estimates that as of October 1996, 5 million illegal aliens were residing in the United States. INS estimates that this number is increasing by about 275,000 persons annually. While not the primary source of illegal immigration into the United States, visa fraud is a matter of concern. Illegal aliens are creative in their use of fraudulent documents to gain entry into the United States. A common practice is to paste the photo of an ineligible individual into a stolen passport with a valid visa or otherwise alter the data on the visa. Criminal passport and visa fraud arrests by State's Bureau of Diplomatic Security have more than doubled from 256 in 1992 to 567 in 1996.
Controlling immigration to the United States is primarily INS' responsibility. State helps INS by issuing visas to citizens of other countries who want to visit the United States and identifying persons who should be excluded. Issuance of a visa, however, does not guarantee that the holder will be permitted to enter the United States. Rather, it permits the holder to apply at a port of entry. Responsibility for granting entry rests with the INS officer who conducts the inspection at the port of entry. In fiscal year 1996, State processed nearly 8 million nonimmigrant visa applications at over 200 visa-issuing posts. Thus, it is important that State's system work as efficiently and effectively as possible.
WEAKNESSES IN STATE'S PROCESSES
Since 1987, State has recognized the lack of adequate controls over visa processing as a material weakness and an area of high risk.(see footnote 3) State's Office of Inspector General has also identified a number of problems with visa operations. In response to these weaknesses and concerns about the growing problem of illegal immigration, State, beginning in 1989, developed a strategy to reduce the vulnerability of its processes to fraud. This strategy included improving and expanding automated systems and establishing embassy committees to identify individuals ineligible for visas. Full implementation of the machine-readable program was the primary initiative for eliminating visa fraud. State's plan also called for providing all visa-issuing posts with automated access to its global data base containing names of individuals ineligible for a visa. Later, State established embassy lookout committees designed to promote closer cooperation with other agencies in identifying individuals ineligible for visas. These efforts were to be combined with a greater emphasis on enforcement of internal management controls.
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Technical Problems Reduce Effectiveness of Visa Automation
In 1989, State began the machine-readable visa program as its primary initiative for eliminating the use of fraudulent nonimmigrant visas. The machine-readable visa is considered a more secure document than its predecessor because the new visa is printed on synthetic material that is more secure than paper, is attached to the passport, and has a machine-readable zone with an encryption code. At the ports of entry, INS and the U.S. Customs Service can check names by scanning the machine-readable zone of the visa. The visas also include a photograph of the traveler.
The machine-readable visa, in conjunction with expanded access to the automated lookout system, can significantly reduce the vulnerability of the system to fraud. State originally intended to have the machine-readable visa system installed by 1991. However, the program suffered from delays and insufficient funds. In addition, automated access to the lookout system was not available at all posts. In 1994, after the World Trade Center bombing, the Congress directed State to install automated lookout systems at all visa-issuing posts by October 30, 1995. State also made a commitment to install the machine-readable visa system at all visa-issuing posts by the end of that fiscal year. The Congress authorized State to retain machine-readable visa processing fees to fund these and other improvements.
At the time of our review, State had installed the machine-readable visa system at 200 posts. In addition, all of the posts had automated access to the Consular Lookout and Support System (CLASS) either through direct telecommunications lines to the CLASS data base in Beltsville, Maryland, or via the distributed name check (DNC) system, a stand-alone personal computer system with the CLASS data base on tape or compact disk.
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In April 1997, State testified that (1) every visa-issuing post has the machine-readable visa system installed, and had direct access to CLASS; and (2) it had developed and is now installing a new version of the machine-readable system, called MRV2, at all visa-issuing posts. State spent about $12.9 million on installation of the MRV2 in fiscal year 1996, plans to spend $24 million in fiscal year 1997, and has requested $32 million for fiscal year 1998.
Although most posts had automated name-check capability and machine-readable visa systems at the time of our review, technical problems limited their usefulness and availability. Posts often experienced transmission problems with the telecommunications lines that support the system. U.S. missions in Mexico City, Guatemala City, Sydney, Nairobi, and Seoul experienced problems with the telecommunications lines and interruptions of CLASS. These disruptions resulted in considerable delays in visa issuance and weakened visa controls. For example, during our visit to Mexico City we noted that consular staff were using the old microfiche system to check names during telecommunications disruptions rather than the DNC that was designed as backup. They used the microfiche system because using the DNC to check names was often a slow process. By doing so, the post ran the risk of approving a visa for an applicant who had been recently added to CLASS but had not yet been added to the microfiche list.
State's Diplomatic Telecommunications Service Program Office works with international telecommunications carriers to find solutions where possible. However, if the problem is in the telecommunications lines of the host country, little can be done except to improve the post's backup system.
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Lack of Cooperation Limits Usefulness of Lookout Committees
Effective efforts to limit visa fraud call for the skills, resources, and coordination of many U.S. government agencies. In the aftermath of the World Trade Center bombing, State directed all diplomatic and consular posts to form committees with representatives from consular, political, and other appropriate agencies to meet regularly to ensure that the names of suspected terrorists and others ineligible for a visa are identified and put into the lookout system. Of the nine posts we visited, all but the consulates in Sydney and Johannesburg had lookout committees, and those two posts were represented by the lookout committees at their embassies in Canberra and Pretoria, respectively.
Embassy officials at two of the nine posts we visited questioned the value of the committees, mainly because of the lack of cooperation from some agencies. A number of agency representatives were reluctant to provide to the consular sections the names of suspected terrorists or others the U.S. government may want to keep out of the country. They attributed their reluctance to the sensitivity of the information and restrictions on sharing information. Officials from one of the law enforcement agencies contacted expressed concern that the information entered into CLASS could be traced to the originating agency and compromise its work. Only one of the agency officials we interviewed said that he had seen guidance from his agency on the extent to which this agency could share information. In addition, not all agencies were represented on these committees. For example, according to a consular official, the committee in Pretoria did not include representatives from the Federal Bureau of Investigations, the Customs Service, and the Drug Enforcement Agency. The committee in Tokyo also lacked key representatives.
Page 67 PREV PAGE TOP OF DOC Consular officials told us that the lookout committees are intended to augment rather than replace coordination activities at headquarters. Additionally, according to consular officials, they are (1) working closely with individual posts to resolve coordination problems, (2) maintaining close liaison with participating agencies at the headquarters level to ensure continued cooperation and commitment, and (3) soliciting increased participation from agencies whose contributions were limited in the past. State says that it has also taken steps to clarify terrorist reporting channels. We have not assessed the effectiveness or extent of these headquarters' initiatives.
Overseas Posts Do Not Always Adhere
to Internal Controls
Maintaining the integrity of the process requires that posts adhere to established controls. This was not always the case. One common shortcoming we observed was the use of foreign service nationals (FSN) to check names through CLASS without the direct supervision of a U.S. officer. FSNs were responsible for checking names at five of the posts we visited. The consular officers at these posts relied on FSNs to notify them when an applicant's name matched one in the CLASS data base. At the time of our review, three of the posts also were not equipped with the machine-readable visa system, which automatically provides the results of the name check for the U.S. officer's review. Officials of State's Bureau of Consular Affairs told us that the machine-readable system has since been installed at these locations and improved procedures and software enhancements now make unsupervised name checks impossible. Consular officers are now required to certify in writing that they have checked the automated lookout system and that there is no basis for excluding the applicant. We have not assessed the extent or the effectiveness of compliance with this new requirement.
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Other internal control shortcomings were the lack of security over controlled equipment and supplies and the failure to report and reconcile daily activities and follow cashiering procedures. Bureau of Consular Affairs officials attributed some of these problems to a lack of resources.
Inspector General Reports That Some Problems Remain
In May 1997, State's Office of Inspector General issued a report that concluded that some of the problems with the machine-readable visa program still exist. The Inspector General reported that some posts are still having difficulties accessing CLASS as a result of interruptions to telecommunications lines or the mainframe computer. Further, the Inspector General identified significant software limitations with the DNC that may prevent posts from having full information at the time of visa adjudication. The report stated that the Bureau of Consular Affairs has developed and distributed a newer version of the DNC that will address these limitations.
The Inspector General further reported that, although all posts now have the machine-readable visa system, the border security and inspection process remains vulnerable with respect to validating a visa. There is no automated mechanism for transmitting data about nonimmigrant visa issuance to ports of entry to determine whether the machine-readable visa being presented for entry into the United Sates is a valid visa issued by the Department. Moreover, INS is not reading the encryption code to authenticate the visa. According to State, the new machine-readable visa will have the capability to electronically transmit relevant nonimmigrant visa data to ports of entry. The Inspector General also reported that management and accountability over machine-readable visa supplies and equipment continues to be a problem.
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The report attributed some of the problems to severe staffing shortages and the Bureau of Consular Affairs' failure to address software and hardware problems early in the development of the machine-readable visa program. While recognizing that the new version of the machine-readable visa is designed to correct some of the shortcomings, the Inspector General made a number of recommendations to address other weaknesses in the process.
In closing, the State Department has made progress in automating and modernizing its visa-issuance process to reduce its vulnerability to fraud. However, improvements are still needed to better protect the integrity of U.S. entry documents.
This concludes my prepared remarks, Mr. Chairman and Members of the Subcommittee.
Mr. SMITH. Thank you. Let me say I am sure we will have a number of rounds of questions, since you are the only panel and since we have some time this morning. So with that in mind, let me first of all begin my questions with Ms. Ryan.
I appreciated in your testimony your very specific goals as to what you wanted to accomplish in the next 6 months or 2 years. You mentioned in 6 months we will have more rapid and sure success in our passport fraud files than we have now, and in 2 years' time this data will be at the fingertips of our fraud passport managers at each passport agency in the United States.
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But I notice in the two different types of fraud, you have both fraudulent documents and you have legitimate documents fraudulently obtained. You spent most of your testimony on the fraudulent documents.
How can we do more to prevent the latter? How can we do more to prevent legitimate documents from being fraudulently obtained?
Ms. RYAN. Well, one of the things I think that the Congress has foreseen, which would help us a great deal in the new immigration act, is to work with the States to try to narrow the number of documents that are available, legitimately available, that are used to prove citizenshipfor example, birth certificates. There must be 10,000 different kinds of birth certificates in this country. So it is very hard for passport examiners to be up to the minute on all of those.
Some of them are legitimate, some of them are not. Some of them can be obtained by people who are intent on confusing us or defrauding us on documents.
We need to narrow the number of, for example, birth certificates that are used as proof of birth in the United Statesthat would help us a great dealbecause the people who are intent on committing fraud know the number that are available, use different kinds, abstracts. In one recent case, a woman used her children's legitimately issued birth certificate that she then copied on her computer.
Mr. SMITH. I can see the extent of the problem. What do you think the solution is?
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Ms. RYAN. I think the solution is narrowing the number of documents that are presented to us, that the Congress has already put into the immigration act, better training for our examiners; and we have begun on that. We have begun additional fraud training for our examiners.
Mr. SMITH. Should any changes be made to the documents themselves?
Ms. RYAN. Well, if we had from each State a single birth certificate, that would help a great deal, obviously.
Mr. SMITH. As you pointed out in last year's bill, we are moving towards trying to encourage just that. But that is part of the solution.
Ms. RYAN. Perhaps Mr. Vazquez or Mr. Virtue could add to this.
Mr. SMITH. I will follow up on that in a minute.
Mr. Virtue, you mentioned that immigration fraud increased significantly in recent years. You said the increase in the number of aliens resorting to fraudulent means to enter and remain in the United States is also on the increase. You also heard Mr. Bromwich say that the INS does not prosecute individuals who use fraudulent documents. In fact, they give them all the benefits that those fraudulent documents appear to entitle them to.
Page 72 PREV PAGE TOP OF DOC What is the explanation for the low priority that the INS gives to individuals who use fraudulent documents in either way?
Mr. VIRTUE. Well, in response to the Office of Inspector General report last September, the INS has developed and will be putting in place by July, which is the time frame that we responded to the Inspector General's Office, a flagging system so that we will in fact have in our Central Index System a flagging of those people suspected of having benefited from fraud. So thatbecause the number of investigators is fairly small, given the other priorities of criminal alien removal and worksite enforcement, we are enlisting our examiners in combating fraud as well, so that the examiners will know when they are reviewing an application or if they even have someone sitting in front of them that had benefited from fraud in the past.
So I think the answer to that is
Mr. SMITH. Is the answer that you are going to give it a greater priority than you have in the past? Is that what you are saying?
Mr. VIRTUE. Yes. We have given priority to enforcing the border, to the removal of not only criminal aliens but other aliens as well. And some of these things have made it much more difficult for people in the traditional way to gain benefits or admission to the United States, so they are more and more resorting to fraud; and that is something that we feel we have to give a higher priority than we have in the past. It is part of our improving adjudication services priority for this fiscal year.
Page 73 PREV PAGE TOP OF DOC Mr. SMITH. You talk about giving it a higher priority. The last time I checked, Congress had funded 250 criminal investigators, and those positions had not yet been filled by the INS as of the end of March. If it is a priority, why have you not filled those 250 positions?
Mr. VIRTUE. I would have to get back to you on the answer to that.
Mr. SMITH. Two hundred fifty criminal investigator positions not filled as of the end of March is my best knowledge. We will wait for your answer on that.
[The information was not provided at time of printing.]
Mr. SMITH. If I could askwell, since there are going to be a number of rounds of questions, I will wait and ask my additional questions in a minute.
The gentleman from North Carolina, Mr. Watt.
Mr. WATT. Thank you, Mr. Chairman. I have a number of questions, and I think I will just maybe deal with one person at a time, assuming we are going around. Maybe I will take one of the panelists for each time we go around.
Let me start with the one that is freshest in my mind, Mr. Nelson.
One of the concerns I think I have is, we keep improving machine-readable visa forms and then we have gone to MRV 2, and it seems to me that every time we do something to upgrade our system, the counterfeiters get more sophisticated and they go to the next step, just like we go to the next step. I am looking at this document here, which you can probably see from your distance, which I understand is a fraudulent document, which is just about as goodit probably would go through the MRV, wouldn't it, and get read; and this person would go right on there, it was so sophisticated?
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Is there really any hope that we can make these documents so counterfeit-proof that they can be reliable in all instances?
Mr. NELSON. Mr. Watt, the criminals have available to them and access to the same technology that the Government has, so it makes it difficult to manufacture any type of document that cannot be fraudulently produced at some cost. However, the Inspector General pointed out that one way to reduce the vulnerability of the system to fraud is better utilization of the various components of the system to do a match.
The Inspector General recommended that when an individual presents a visa at a port of entry, the INS check the biographics against the description on the visa, and also that it has access to whatever information the State Department has. They also recommended that a check be made to see if the visa that the individual is presenting is actually one that was issued by the Department.
So there are a number of steps that can be taken to match various pieces of information at the point of entry.
Mr. WATT. Right now, we don't have that capacity, right? What would it cost to put a system in place that would give us the capacity you just described?
Mr. NELSON. At this time, I cannot give a figure. I think the Department has probably collected some information and done some analysis of what would be the cost. But I believe that capability is now included in their plan, and thatwith the upgrades that they have in mind, that we will have the capability to perform that type of check.
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Mr. WATT. But you are doing these things at the ports-of-entry like, what, every 45 seconds, right? Or less? When I come through, I want to get through quicker than that.
Mr. NELSON. It varies from post to post. Some of them are extremely busy. I believe that when we did our field work in 1995, posts were spending a very short amount of time with each applicant. That was when the equipment was working. When the equipment wasn't working, the time to process each application increased considerably.
Mr. WATT. Ms. Ryan, maybe you could address the cost issue and the timetable for putting this entire system in place that Mr. Nelson has described.
Ms. RYAN. We have begun this type of data exchange that you were describing, sir, with the INS on immigrant visas. Fully 55 percent of the immigrant visas that are issued now, we have exchanged the data with INS, so INS will have our information at the ports of entry when the immigrant presents himself or herself to the inspector.
We hope to have this same capability and this same exchange on nonimmigrant visas by the beginning of the next century.
I am not sure how much it costs. I will have to get back to you on what the cost is of this. But we are working toward that very goal that you described right now.
Mr. WATT. Thank you, Mr. Chairman. I will come back.
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Mr. SMITH. Thank you, Mr. Watt.
[The information follows:]
The DataShare project, which provides for the electronic exchange of information between the Department of State and the INS, is not a free-standing project to which it is possible to assign specific costs. Instead, DataShare is an ancillary benefit of other, major investments being made by both the Department of State and the INS in automated systems, software and telecommunications.
In the case of the State Department, expenditures for the infrastructure upon which DataShare operates will exceed $150 million during the FY199799 period. This includes the cost of the State Department's migration to a local area network environment at our overseas posts, the estimated requirements for automated systems in consular sections as well as consular-specific computer applications, planned expenditures for telecommunications connectivity between overseas posts and the Department, projected financial requirements for establishing a corporate database which stores the information provided by the State Department of the DataShare project and, finally, the cost of electronic connectivity between the State Department's corporate database and similar facilities at the INS.
Much of the infrastructure needed to support the State Department's portion of DataShare, and all of the requirements for equipment, software, training and communications connectivity in support of consular operations, is financed through fees generated by the Machine Readable Visa (MRV) program. This is another example of the contributions of MRV fees to improving U.S. border security.
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Mr. SMITH. The gentleman from Indiana, Mr. Pease.
Mr. PEASE. Mr. Chairman, I understand you are going to need to leave shortly. I will yield my time to you for your questions.
Mr. SMITH. Thank you. I appreciate that. I do need to leave for 5 or 10 minutes, as you just mentioned.
Mr. WATT. That means I get to preside?
Mr. SMITH. Well, if you can talk Mr. Pease into leaving, you can preside. I would be happy for you to.
Mr. Yates and Mr. Cutler, you both have firsthand experience and firsthand knowledge of one of the most blatant abuses, I guess, of fraudulent documents, and that is in regard to marriage fraud. Would you all tell me the extent of marriage fraud today; that is to say, how many thousands of people do you think illegally come into the United States on the basis of marriage fraud, and also what we ought to do about it.
Let's start with Mr. Yates and then go to Mr. Cutler.
Mr. YATES. Mr. Chairman, we are seeing literally tens of thousands of applications that we suspect are filed for spouse petitions where these marriages are not bona fide. As I mentioned earlier, they are using valid documentation. So an officer adjudicating a case, it looks like everything you could possibly ask for regarding that relationship is there, including a valid document.
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We were fortunate in identifying this fraud because we have an officer who has a photographic memory and saw a photograph on one petition and said, Wait a minute, I have already seen this. From there, we now have over 17,000 cases identified. But we are just one of four service centers.
Mr. SMITH. I was going to say 17,000 cases just in your one district?
Mr. YATES. Just in one service center. That is 17,000 out of approximately 200,000 cases that have been filed. But I don't know if that is just the tip of the iceberg.
The service centers do have the capability to do computer-assisted link analysis, and we are developing that capability so that as soon as we can detect any kind of fraud scheme, we can reach into our data base and identify any other case that would have similarities.
For example, if there are notaries and attorneys, we can pull those out. We have asked headquarters now as we further develop some of our systems to incorporate additional data elements, so that will help us to further be able to detect some of these fraud schemes.
In this particular case, though, what we did was, we actually laid out on the floor over 50,000 of these petitions and had them walk up and down aisleways looking at photographs. That is the way we got started in building 17,000 I130 petitions where we suspect fraud, because there isn't any way a computer can do that based on photographs.
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Mr. SMITH. Thank you, Mr. Yates.
Mr. Cutler, assuming that the problem is as bad as Mr. Yates just testified, and you have one service center out of four with 17,000 fraudulent applications because of marriage fraud, do you think the problem is that great?
And a second question at the same time, since not all agents are going to have photographic memories, what is the solution to try to stop the degree of marriage fraud that we are seeing today in the future?
Mr. CUTLER. Well, good morning, Mr. Chairman. I welcome this opportunity. I was an I130 examiner many years ago back in the 1970's. I am now with the Drug Task Force.
I can tell you many times when I review immigration files of targets of investigation, people we believe are involved in narcotics and other criminal activities, we find that these people have their residency in the United States and yet their spouses are nowhere to be found. It may well be that they had a marriage that was legitimate and it dissolved, as happens to many people; or it may well have been they entered into a marriage fraud in the first place.
It is very difficult when you get a file of somebody who became a resident alien based on a marriage to make a definitive decision as to whether or not there was a marriage fraud. There are so many different ways that it is done. You have people that get divorced on paper; they really aren't divorced, they still have their spouses back home waiting in the wings, waiting to come over as soon as the person finalizes their residency.
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Even in the area of imposterswe keep talking about name checks, we are going to check the name against the master list. I think what is even more important and perhaps more worthwhile would be for us to be more reliant upon biometrics.
The problem that we have is that people can be anybody they want to be. I had an instance recently where we had a Russian national, whom we arrested, and the guy was apparently deported from the United States, and came back to the United States with a brandnew identity. He paid a total of $140 for a new passport from Russia, and this passport was a legitimate document, improperly issued. This passport contained a nonimmigrant visa. The State Department couldn't be expected to figure it out.
Mr. SMITH. Let me squeeze in one more question. I want to go back to your point about biometrics.
As I understand it, that would include a photograph or fingerprinting. I would like to ask, and I seewhen you mentioned that, I saw several heads nod. I would like to ask all of our witnesses what they think about that and whether that would help reduce the widespread use of fraudulent documents.
Let me start with Mr. Nelson and then go to Mr. Bromwich.
Mr. NELSON. Mr. Chairman, I am certainly not as knowledgeable on this issue as some of my colleagues here who have been out there on the front line and really know and understand the day-to-day operations of those individuals who are trying to illegally enter the United States.
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With respect to the biometrics, I think it would be an improvement in that the current approach focuses on the quality of the document, trying to identify whether the document is fraudulent. And as Mr. Cutler said, it is very easy for people to duplicate or manufacture a document that looks fairly official.
The biometrics would provide an additional measure of protection or at least a more stringent type of critique of the individual presenting the document.
Mr. SMITH. Thank you.
Mr. BROMWICH. Yes, I am in favor of increased reliance on biometrics. I think that is the wave of the future. It is, however, very expensive, and we certainly need to monitor the costs.
Mr. SMITH. Mr. Virtue.
Mr. VIRTUE. I agree. We are looking at taking the IDENT System that has been used on the southwest border and at some of our ports of entry and looking at applying that, as well, to the application of benefit fraud. It is a way of doing a cross-check.
Mr. SMITH. Thank you.
Page 82 PREV PAGE TOP OF DOC And Ms. Ryan.
Ms. RYAN. I agree. We are beginning next year to reissue all the Mexican border crossing cards, and the Congress has mandated that they must have a biometric in them. We have good tests to see how many people match the cards. It really is the only way we are going to know if the person standing in front of us is the person who made the application.
Mr. SMITH. Is to test it.
Real quickly, let me ask Mr. Epstein and Mr. West what you all think?
Mr. EPSTEIN. From a forensic point of view, absolutely. It is really the only way that you can tie the document in. You have to have a way to tie the document to the individual. A document by itself, standing alone, there will never be one that will be so safe that we will be protected from counterfeiting or abuse. But we have gotten now to the point where the computers that are presently available and are not that expensivethe price of this type of computing system is going downso we are going to get to a point where we are going to rely on biometrics, without a doubt. The point is, how quickly are we going to get there?
Mr. SMITH. Mr. West.
Mr. WEST. Mr. Chairman, I clearly concur with the rest of the panelists on this issue. The scope of the problem relative to immigration fraud, especially in the benefit fraud arena, is so widespread that clearly until we are able to match specific paperwork documents, applications, with biometrics, we will never be able to get a solid, firm handle on this benefit fraud issue.
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Mr. SMITH. Thank you, Mr. West.
We seldom get a consensus on anything. This is probably the first time in the history of the subcommittee we have had a consensus.
I need to excuse myself for a few minutes. I am going to recognize Mr. Pease both for questions and to chair the subcommittee until I return.
Mr. PEASE [presiding]. Mr. Bromwich, you showed the poor judgment to pause for breath before you finished your presentation.
Mr. BROMWICH. I won't make that mistake again.
Mr. PEASE. I am curious to know what you would have said if you hadn't needed to breathe?
Mr. BROMWICH. I was going to describe the steps INS agreed to take in response to our 1996 inspections report, and in brief, it was to put together a task force that would figure out a way to in fact flag the individuals in the INS databases who had been the recipients of fraudulently obtained benefits.
As Mr. Virtue indicated a few moments ago, there is a task force that is now working. I believe that INS has committed itself to finishing the work on that by the end of July 1997, and that shortly after its implementation, we hope to take another look at it to make sure that it in fact is working properly.
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I think I have summarized all of the points I was going to make in the last couple of pages of my prepared testimony.
Mr. PEASE. Thank you very much, Mr. Bromwich.
Ms. Ryan, you, in your opening remarks, talked about the fees that you collect, that State collects, and being able to retain those fees for administering the program of visa and other document protection; and you anticipate that will continue into the foreseeable future, or the President has proposed it for 1998?
Ms. RYAN. The President has proposed substituting fees for appropriated funds. It would be 25 percent of the State Department's budget that are collected primarily by consular fees, passport application fees, things like that.
Right now, we have the authorization from the Congress to collect and to keep the machine-readable visa fee, which at this time is a $20 application fee, every one of the 8 million nonimmigrant applicant pays that $20. We are allowed to keep that money. That is what has enabled us to implement the kind of advances and improvements in our machine-readable visa technology that we have now, so that every post has that capability.
Every post is tied into our database here in Washington. Before, when we were doing it out of appropriated funds, implementation of technology improvements was much, much slower, obviously.
Page 85 PREV PAGE TOP OF DOC Mr. PEASE. Do you know if there has been any accounting or auditability to determine the costs of administering these programs to persons from other nations that wish to come here, and apportion that cost, either in part or directly, against those persons in the fees that they pay? In other words, do the fees that are paid, can we know if the fees that are paid now are actually covering the costs of administering the program?
Ms. RYAN. We have just completed a cost-for-service study. The goal of that is to be able to recover the costs that we expend on doing this kind of work, both for American citizens and for non-Americans. We are refining the data that we have gotten from this study, and I would hope we would be able to know some time within the next few months exactly what fees should be.
We haven't done such a study for some time, since 1991 or something like that, so I think that it will show that we are not covering all of our costs, and if we are able to institute the new fees, we probably would be able to.
Mr. PEASE. Will you need statutory authority to adopt new fees that reflect the cost of providing those services?
Ms. RYAN. I would defer to one of my experts.
Mr. MOSS. I am Frank Moss from Consular Affairs.
We will not need new legislation to continue to charge the MRV fee. We need permanent authority to retain it. What the President has proposed is additional authority which will allow us to retain other fees; i.e., the passport fee, our immigrant visa fees, application fees and things like that. That is what we are seeking new authority for in the 1998 budget.
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Mr. PEASE. And are wemy exchange here with Ms. Ryan, is that beyond what you are seeking at this moment in terms of being able to charge directly the costs for all of your services against the persons who use those services?
Mr. MOSS. That is correct, Mr. Pease. The cost-of-service study we are in the process of completing looks at all of our services, and identifies the appropriate charge, including both the direct cost to that service, plus the ancillary indirect costs that are incurred in any organization.
Mr. PEASE. Do you anticipate a request from the Congress soon for the authority to do this?
Mr. MOSS. It was included in the legislative package that accompanied the President's 1998 budget, and is in the House version of the State Department authorization bill for 1998.
Mr. PEASE. Thank you very much.
The gentleman from North Carolina, Mr. Watt.
Mr. WATT. Thank you, Mr. Chairman. You like the ring of that, don't you?
Let me go back to this biometrics issue again, because I heard a stunning amount of unanimity in opinions. Maybe I just don't understand what biometrics are.
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I am a little troubled about how this is going to solve the magnitude of the problem that we have unless you all are including fingerprinting in this. So you are not talking about this?
We have the capacity to do biometrics with a visa document now, don't we? There is a picture, these little things down here, I understand, give you the color of eyes and the color of hair and the height and that kind of stuff, so unless we are doing something beyond what we are doing now, somebody enlighten me.
Mr. WEST. Who do you want
Mr. WATT. You go first, Mr. Yates.
Mr. YATES. Mr. Watt, we are currently using a system on our I90's with aliens that apply for a replacement green card. We are able to obtain image, signature and fingerprint from the alien facility in Texas. By using that data and putting that up on a computer screen, that is how we have been able to identify we have a problem with imposters.
On our surveys, approximately 14 percent of those applications that are filed for replacement cards are filed by imposters. So we know that we can achieve success when we bring that image, that signature and that fingerprint up right on a commuter screen for the adjudicating officer.
Page 88 PREV PAGE TOP OF DOC Mr. WATT. Mr. Cutler.
Mr. CUTLER. The point I was going to make is that across-the-board spectrum of problems that we encounter, my perspective is going to be different, I believe, from the other folks on this panel, because I am a field agent. So my needs are day-to-day issues.
We often find that imposters are a big problem for us, criminals are a big problem for us. There are many times when I can pull up a rap sheet on an individual that we stop on a pretext car stop, we observe them on a surveillance, he is moving narcotics, is involved in the sale of narcotics, and the rap sheet goes on forever. It looks as though this man is attempting to violate every law in the criminal statutes, both at the State and Federal level.
I pull up the immigration file. There isn't anything in that file because we have never retained the fingerprints when the man or the woman became a resident alien. So then what happens is, we have a name of somebody and the name doesn't match the name on the rap sheet. We have no way of knowing.
We need to have fingerprints registered for each resident alien, perhaps in NCIC, so if that person ever gets arrested for any reason, we know that, because it would then be cross-referenced with the immigration file.
In fact, one of the problems we have, I will tell you briefly, we have people that give false names when they are arrested by police or DEA or FBI, they claim to be illegal aliens when they are in fact residents of the United States. They get deported from the United States under a different name. Because we don't have the fingerprints on the original immigration file, they go home, pick up their alien card, and walk right into Kennedy Airport or some other airport, and we readmit them as resident aliens.
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We have to be more careful to make certain we know who we are dealing with. This is the biggest issue we face.
Mr. WATT. I guess this is the difference between biometrics and advanced biometrics. You are taking biometrics to the next step when you are talking about the ability to pull up a fingerprint, signatures, all kinds of rap sheets, the whole thing.
Mr. WEST. That is not all that advanced. The police have been doing this for many years. When you arrest a suspect, you look at the rap sheet and see there are 10 aliases; you know that because of the fingerprints. We need to do the same thing here.
Mr. WATT. That is very helpful to me. That kind of got me off my individual-by-individual questioning, but let me go back and try to get back on my individual scheme here.
Mr. Bromwich, as I understand what you were saying in your testimony, most of the document fraud is investigated by the INS, except the Inspector General's Office investigates employees of INS when they engage in some kind of improper conduct; is that right?
Mr. BROMWICH. That is correct.
Mr. WATT. Now, with respect to people who have engaged, who have defrauded the system and they did it by virtue of going through an INS employee who was engaging in improper conduct, do youdoes the Inspector General's Office proceed beyond that point, or does it then go back to the INS to follow up and flag these things, flag the files and do everything else possible?
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Mr. BROMWICH. That is a good question. To the extent the scheme we are investigating involves not just the corruption of the INS employees, but obviously, the individual corruptors, the middlemen, the vendors and so forth, those will generally be pursued as an integrated case and generally will be referred for prosecution, both as to the INS employees and the civilian middlemen or vendors.
What my testimony is addressing is
Mr. WATT. What about the ultimate beneficiary?
Mr. BROMWICH. We do not, as a general matter, pursue the cases against the individual aliens who improperly received the benefits. We certainly share that information with the INS.
Were we to get different signals than what we have gotten from prosecutors over the years, we would certainly consider including those aliens. But this is ranked fairly low on the scale of prosecutorial priorities.
Mr. WATT. But you have the same set of problems that INS has? This is just down on the priority list of things to do?
Mr. BROMWICH. That is right. So we generally, as an investigative matter, do not pursue as separate matters the aliens who are the recipients and beneficiaries of these fraudulent schemes.
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Mr. WATT. Would there be any effective way for you to pursue them without the beneficiaries of the fraud, that is, the people benefiting from it as opposed to the INS employees, without going back into the files and pretty much engaging in a review of a bunch of files that were basically innocent bystanders?
Mr. BROMWICH. I don't think we are talking about innocent bystanders. We are talking about people who knowingly received illegal benefits because of a document fraud scheme.
Mr. WATT. How do you identify them without going through the files of a number of innocent bystanders?
Mr. BROMWICH. Well, if we, for example, have an undercover investigation going on and we are aware of the vendor, the middleman who is dealing with a corrupt INS official, through those dealings we would have the ability to know where the documents are that the vendor, the middleman has of his other clients, for example. Presumably they are involved in the same sort of scheme.
So there is a way to do it. It is just as you heard from the testimony of other witnesses, we are talking about thousands and thousands and thousands of aliens who are the beneficiaries of these fraudulent document schemes. As difficult as it is for INS to keep up with it because of the lack of resources, it is impossible for us to do it.
Mr. WATT. I think my time ran out, and he started me over. Have I still got time?
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Mr. SMITH. This is one of those rare instances where you haven't used up all of your time.
Mr. WATT. I was using somebody else's time, because I saw the red light go on and then he started it over again. I thought he was just being overly generous with me. That is fine.
Mr. Yates, you have one region. How many regions are there, 12?
Mr. YATES. No, there are three regions, but there are four regional centers, Mr. Watt, four regional processing centersCalifornia, Texas, Lincoln, and VermontLincoln, Nebraska.
Mr. WATT. So four regions. You just have 17,000 out of the 200,000?
Mr. YATES. I am sorry. That is just one case.
Mr. WATT. What kind of case?
Mr. YATES. That is just one particular scheme. That is not
Mr. WATT. That is the marriage scheme?
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Mr. YATES. Yes. That is interrelated.
Mr. WATT. So you think if you took that 17,000 and multiplied it timesyou think that is being replicated all across the system?
Mr. YATES. I can't
Mr. WATT. Most likely.
Mr. YATES. I certainly can't state that.
Mr. WATT. There isn't a reason why somebody is going to come only to Vermont and do that?
Mr. YATES. That is right. I suspect there are common scenarios in other areas.
Mr. WATT. Although it is a nice place to be married, I am told.
Mr. YATES. Most of these are being performed in the New York-New Jersey area and being filed in Vermont. We service the east coast.
Mr. Watt, with Mr. Bromwich you raised a very important issue.
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Mr. WATT. I don't always know when I am raising a very important issue. I appreciate you telling me that. Go ahead.
Mr. YATES. You asked about the investigations and how could the OIG followup on these cases. There is a disconnect between the investigative portion, and I am not talking about the OIG now, even within INS. The investigation has goals to prosecute the principals in those cases, but many times at the end of it, what I see at the service center when I am left with, for example, 17,000 I130s, is I do not have the evidence coming from that investigation which will allow me to deny all of those cases. That is one of the key things.
We need to develop a comprehensive strategy that the agency articulates, and whether the OIG initiates a case or INS initiates a case, in addition to the prosecution of principals and the cessation of whatever criminal activity is occurring, we need evidence on each and every petition, because every one of those cases has a legal right to a full and honest adjudication.
That is where we are lacking right now. We do not have that kind of overall strategy.
One of the ways we can achieve that is, we do not accept the plea agreement, and whether it is a corruption case or a case on an attorney or another fraud facilitator, we don't accept a plea agreement in a criminal prosecution unless we get statements from them regarding all of those cases that have been filed.
Page 95 PREV PAGE TOP OF DOC I think there are some other steps we can take. We are not doing it right now.
Mr. WATT. This sounds like it would require a lot of interagency coordination and cooperationIG, INS, Justice, FBI. This sounds like it might benefit from one of those, what is the thing that Mr. Colgate is doing where he isa task force, where he brings all of the leadership together to deal with alien issues. Maybe we need the same kind of thing to deal with these followup investigations of fraud issues.
Mr. YATES. Yes, sir, I agree.
Mr. WATT. Has anybody talked about that, Ms. Ryan? Would that be under your jurisdiction?
Ms. RYAN. No, it would not bewe participate in this though, because we see a lot of these petitions overseas when the applicant shows up. As we are able to, we do investigations, and we return the petition to INS. So we would play a role in this.
INS, thoughfrequently, as was just described, finds that these people are entitled to full and fair adjudication, and even though officers in the field, consular offices in the field believe they have proved that fraud was committed, frequently INS is not able to accept that.
Mr. WATT. But you have got a pretty good evidentiary file fromalready developed, if you could just access it and use it in the administrative end, in the INS process. You would have to readjudicate it?
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Ms. RYAN. INS would have to readjudicate it, yes.
Mr. WATT. You would start with pretty good evidence?
Ms. RYAN. We think so.
Mr. WATT. Mr. Virtue.
Mr. VIRTUE. I was going to mention probably the critical aspect of that which Mr. Yates described is the prosecution itself. So the coordination is really at the prosecution stage. It has to be with all the investigative agencies, but it is brought to bear at the point of the prosecution, if what we are talking about is getting the information before we will accept a plea bargain.
So that is something we need to consider within Justice.
Mr. WATT. I think we are talking about two different things here. I thought we were talking about going on and making that prosecutor's file available to INS in some coordination of efforts here so that you can get not only to the people who have been prosecutedthey have been prosecuted alreadybut to the beneficiaries of the fraud, the ones who have come into the United States as a result of the fraudulent activities of the INS employee or the middleman.
The question was, wouldn't it be INS's role to pull all of these things together and try to coordinate that?
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Mr. VIRTUE. It would be INS's role, yes. In the typical prosecution if we have 1,000 fraudulent applications, you may go to court using 10, 20, 30 examples. So on those 30 examples, the prosecutor's file would clearly establish that those petitions should be denied, and then INS could move against those beneficiaries.
But if you had 1,000 cases, that leaves 970 others that you have no information on, and that is where I am saying we need to have that kind of strategy that recognizes that we have to take action, as Mr. Bromwich indicated, on those 970; and the key spot to start dealing with that is right at the prosecution stage where you can get that information. Then you can flag.
But the flagging is not going to help you if you haven't taken the steps to make sure you get the evidence you need.
Mr. WATT. Thank you, Mr. Chairman.
Mr. SMITH. Thank you, Mr. Watt.
Mr. Bromwich, to me, one of the most jarring statements we heard this morning from any of the witnesses were your comments about the INS's treatment of aliens who obtained immigration documents by fraudulent means. You saidthis is from your testimony''We found that INS took no action whatsoever against these aliens. In our judgment, the reasons INS agents gave for not pursuing aliens may have some merit, but do not justify INS's total lack of action in this area.''
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That leads to all kinds of questions. What kind of message does that send? Two, why do you think that the INS actually took no action in any way to deter these aliens from using fraudulent documents?
Mr. BROMWICH. Well, the message that gets sent obviously is that this is a riskless action from the point of view of somebody attempting to obtain illegal benefits. If they are not going to be prosecuted and deported, nor stripped of their benefits, nor stopped from getting additional benefits in the future, the message is that this is a no-risk game to the beneficiary. So he and others who have knowledge of what he and others have done are going to continue to do it.
The answer to why nothing has been done is a complicated one. I think Mr. Virtue and others
Mr. SMITH. Let me give you three options, I think you know the answer. I think you have the option that INS doesn't care, and I hope and don't think that is the case. You have got the option that it is not a priority, and you have got the option that there are not enough resources.
Mr. BROMWICH. It is the latter two. It hasn't been a high enough priority, in part because it would have had to reallocate resources and INS hasn't had enough resources, in its judgment, to devote a substantial amount of them to these tasks. So I don't think that there is a problem with INS recognizing this is a problem and wishing that it could do something about it. It is a reflection of the primacy of other priorities and a lack of resources.
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As difficult and troubling as I find it and you find it, I think the INS agent in the field finds it equally troubling, because they are involved in investigating these schemes in which thousands of people are involved. And in a number of cases that we took a look at during our inspection, individual agents have actually sought to put flags in the system exactly so that these aliens would not continue to enjoy the benefits they had already received.
And other INS officials said, Don't do that. You are screwing up our records system; we can't have that.
Mr. SMITH. I know you said it hasn't been, at least up to this point, a priority of the INS; and then there is some problem with resources. I know Mr. Virtue is going to get back to me, but the absence of resources as an explanation would ring truer if they filled those 250 criminal investigative slots.
Mr. Cutler, I saw you nodding your head a minute ago. What are some of the frustrations you have experienced out in the field?
Mr. CUTLER. As I started to say before, you really feel as though you are banging your head against the wall. We try to do the best job we possibly can. We are not just agents; we are also taxpayers. We want to make sure we get maximum efforts from our own work in the field.
When you pull up a file and you review it and you find that the person was married to somebody and you are questioning him about a whole bunch of issues, whether it was the drug deal he was involved in or whatever, and you realize the guy more than likely never resided with his wife, the frustration that you wind up feeling is that here is somebody who has been beating the system since day one.
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And you know the old story about you only have one opportunity to make a first impression. When we don't aggressively pursue the obvious frauds, we begin to teach these folks, when they come into this country, from day one we are not going to do other things that perhaps we ought to be doing.
And I think we encourage other criminality, because the message has to be a clear one: If you come to this country and you begin to violate the law, there is going to be a consequence. If there is no consequence, then there is an encouragement.
What I think happens a lot of times is, they notify their friends back home and say, hey, you know what, this is what I did, and I got away with it. Come on down; the weather is fine. And as a result we are being inundated by all sorts of problems.
One fast point, when you talk about the Russian organized crime groups, these are people who for many years have had to exist under the scrutiny of a totalitarian state, and they have been able to do it, and they existed in a state where their police operation was brutal, they were everywhere, and yet, the criminals managed to get away with this stuff and operate right under the nose of the KGB.
When they come to a free society where things are much easier, it is kind of like school's out. They know how to manipulate bureaucracies, and there is a lot less concern about repercussions from their actions. So this is very frustrating for us.
Mr. SMITH. There is very little deterrence on the basis of our actions.
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Mr. West, can you briefly tell me what your experience has been out in the field?
Mr. WEST. Yes, Mr. Chairman. I currently supervise a unit responsible for the INS participation in the Organized Crime and Drug Enforcement Task Force and high intensity drug trafficking area and operations and organized crime cases. For a long time now, that is the environment I have been working in.
Immigration fraud, be it document fraud, benefit fraud, is a key element of criminal organizations and terrorist organizations that involve foreign nationals. The experience that I have seen in many years of doing these types of cases clearly indicates that sophisticated criminal organizations routinely violate immigration fraud statutes.
From the perspective of a qualitative orientation, when we have known criminal groups, criminal syndicates, terrorist organizations involved in this, that has to be a priority.
Mr. SMITH. I agree. But you probably can't prevent the crime syndicates from getting people into the United States unless you have the coordination, communication, technology and priority to prevent others from coming in fraudulently, as well; is that correct?
Mr. WEST. That is correct. One major problem that we have within the INS relative to these issues is our computer databases don't interface with each other. We have half a dozen different systems that must be manually queried for every process that is required.
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If an officer wants to do a full battery of checks, literally they have to sit there and do six queries.
Mr. SMITH. I want to explore that further in the next round of questions.
I wanted to ask Mr. Bromwich one last question. Since your IG report, have you seen, from your vantage point, concrete steps taken by the INS and the State Department to reduce the use of fraudulent documents and the use of legitimate documents, fraudulently obtained?
Mr. BROMWICH. I can't speak to the State Department issue. As to INS, we are waiting to see what they do by the end of July 1997 in terms of developing a system for flagging the recipients of these improper benefits.
So the jury is out as far as we are concerned for INS. I can't speak to the State Department.
Mr. SMITH. Thank you.
The gentleman from Indiana, Mr. Pease.
Mr. PEASE. Mr. West, I want to follow up on something you stated at the end, or you said: Many times there are a number of screens that have to be gone through as you review the computer information.
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I understand that the State Inspector General has found that security features in the machine-readable visas are not currently being used in many cases. INS inspectors are not decoding some of the security information that is already available. Do you know? Can you comment on that?
Mr. WEST. I am not an inspector, but I have some knowledge of the inspection process, and I can tell you, sir, that the average inspector, immigration inspector, has about 20 seconds to do a review of the documents presented to him or her and render a decision as to whether this person is admissible or not.
If there is some indicator that that individual is not presenting proper documents, then that subject can be referred to a more thorough inspection. But given the sheer volume of transactions, if you will, that an immigration inspector must deal with on a daily basis, every document is not going to be scrutinized perhaps the way that it should be, simply because of the volume.
Mr. PEASE. Well, I appreciate your candid response, but it is a bit troubling that if there is security information that is currently available and it is not being utilized, one begins to wonder why we are going to upgrade some of the equipment and capabilities that we have. I guess that is a question to be asked of us as well as you.
But do you think that is common?
Mr. WEST. I would refer that to Mr. Virtue.
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Mr. VIRTUE. The question about inspections is one that is of concern to us as well.
As increasing pressure comes on us to clear flights as quickly as possible, pursuant to the 45-minute standard that we currently have imposed on us, we are looking at other ways to gain that information actually in advance of that person's showing up at the booth, so that we are not faced with a 20-second time period within which to check the information.
So what we are doing is advance passenger information system, where the airlines are required to provide us the information on the person so we can query our systems perhaps hours before the person shows up at the airport. We are targeting people within that population, perhaps, where we have already gained the information.
So that is one way we are trying to address the short time period.
I think the answer to your last question is, yes, it is very important for us to build those systems, because we are trying innovative ways to make use of that information.
Mr. PEASE. I understand the example that you have given. I guess I am curiousand I don't mean any offense by this, to ask those out in the field to respond to that also. Mr. Epstein or Mr. Nelson, whoever would like to respond to that.
Mr. EPSTEIN. Well, I am not in the field, Mr. Pease. I am with the forensic document laboratory. But we are certainly involved in the areas you are speaking of right now.
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As far as the machine-readable visas are concerned and the problems associated with the inspection, there are some problems, and the primary problem is what we have done is gone from the Burroughs visa, which was a stamped impression that used to be placed in a passport, to a much more sophisticated and much more difficult to counterfeit visa, which is a machine-readable visa.
In past years, the inspectors were able to quite adequately determine or identify the counterfeit visas from the genuine visas because it was a stamped impression. There were security features in there that were fairly easy for them to identify and to find. At that time we had a great many poor counterfeits. We didn't have the high quality counterfeits that we have with the machine-readable visas now.
What has happened now is we have a much smaller amount of counterfeit visas. We have really cut down on the number of counterfeit visas that we have. But what we have done is improved the quality of the ones that are counterfeit.
I think what has happened is, in the past, where the inspector was able to quite easily identify the counterfeits from the genuines, even though he has fewer now to identify, he has much more complex counterfeits to identify, because the same process that we use to produce that visa, the counterfeiters are using.
One of the things we should always consider is that we should try to find software that is not on the shelf. In other words, if we are going to produce a visa where we are using off-the-shelf software to produce the photograph, to produce the information on there, we have to realize that others will be able to obtain the same software and be able to reproduce that.
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What we should do is find proprietary software not available to the general public, that is designed primarily for this purpose, that no one else can get their hands on. This would be a security feature and make it much more difficult for the counterfeiter to produce the high-quality counterfeits we are seeing today.
There is a great deal of money involved in this; people are paying $20,000 or $30,000 for a high-quality counterfeit visa. As long as there is that kind of money, there are going to be people with the talent and ability to do this. But the inspectors on the line, to go back to your original question, they are having more difficulty catching these, because the things that have to be looked for take longer than the 15 or 20 seconds that they have.
Mr. PEASE. Is that the kind of thing that can be remedied by better software, so that it is more rapidly available? If it is a function that we have staff that simply doesn't have time to read all the screens, that could be addressed, I suppose, in a number of ways, either with more staff or better software.
Mr. EPSTEIN. The reading of the machine-readable portion is not the answer. As was mentioned a number of times, the problem we have with imposters is a serious one and a growing concern and one being taken advantage of in all of the areas of document fraud.
What happens now is, they simply take the passport issued to a particular individual and they simply remove the photograph and they reproduce the photograph, their own photograph, onto that passport, which is not a difficult process by somebody who is familiar with computers.
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And they go through that line as that individual. They assume the identity of the passport holder.
And so the inspector, what he has to do is be able to determine very quickly whether he has a photo substitution or not, and that can be very difficult when you are dealing with computer-generated photographs. So this is what we are saying, we have created a new area here; it is very difficult to detect in the time they have. In the laboratory it is very easy to detect, but it is not on the line.
Mr. PEASE. And I guess that gets us into the whole biometrics discussion we were having earlier. But if I could, I would just like to ask Mr. Nelson if his read on this is that the technology that is currently available isn't being utilized on some occasions.
Mr. NELSON. Well, I have to preface my remarks by saying our work was completed a couple of years ago and I have supplemented my statement with work done by the State Department's Inspector General. What the State Inspector General found was that according to the INS agents, the technology is difficult. There were a number of false readings or false hits, and it requires a lot of time. I think it has been demonstrated here today that the agents or the inspectors do not have the amount of time that is required to follow up on suspected cases.
Mr. PEASE. If I could, Mr. Bromwich, I don't know if you have got any experience in this particular subject we are discussing now, but I would be curious, if you do, what your opinion is on it.
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Mr. BROMWICH. I think I am sympathetic to the point being made that there is a shortage of time for the individual checks to be made. I think there is also a problem with training, and that is making sure that the people who are going to be looking at the information produced by the biometric identifiers in fact are trained adequately so they know it is, in fact, a good tool that can be used to enhance their ability to enforce the immigration laws. So in addition to more resources that will give them more time, there has to be the investment in training so that the people on the line know what they are doing and recognize this to be the valuable tool it can be.
Mr. PEASE. Thank you. Thank you, Mr. Chairman.
Mr. SMITH. Thank you. The gentleman from North Carolina, Mr. Watt.
Mr. WATT. Thank you, Mr. Chairman. I was very careful in my opening statement to say I could almost take everything from your opening statement and adopt it. There was one, one kind of backhand swipe you took at the 245(i) program, and I wanted to give Ms. Ryan and Mr. Virtue an opportunity to tell us how that extension of the rules is working, and whether that is a valuable program or needs further revision, in your estimations.
Ms. RYAN. From our perspective, Mr. Chairman, the imposition of 245(i), which allows aliens who are here in the United States illegally to adjust their status without having to return to their home country for an immigrant visa interview, freed up our resources. We found we were doing pro forma immigrant visa interviews. The applicants only returned home when they had all their documents together. Barring some unforeseen medical problem, we were just issuing the visas. They came for their interview and the visas were issued. We thought it would be a better use of resources to put them into more interviewing officers for nonimmigrant visa applicants and into fraud detection, which is what we did. So from our perspective, we think it was a wise use of the law.
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We did not see any deterrence against illegal entries because of the requirement that people had to return home for immigrant visa interviews. Now they are allowed to stay in the United States and adjust status. They pay a very hefty fee for that privilege, and so I think, at least from our perspective, everybody gains. We gain in having additional resources to direct where we think we need to put our resources and the Immigration Service gets the fee for the adjustment of status.
Mr. WATT. Mr. Virtue, are there any downsides to this 245(i) process, or
Mr. VIRTUE. 245(i) creates an exception to what are otherwise restrictions on the ability of somebody who is otherwise eligible for a visa to adjust status in the United States. So the people we are dealing with do have the relationship upon which to either process for a visa overseas or to adjust status in the United States. We do have the criminal databases available to us in the United States to check and ensure the person's criminal background. We do think in terms of our information share with the State Department, it will be important for us to gather more information that the State Department can gain overseas in terms of perhaps past criminal records there, but it just depends on the population that we are dealing with. But that is the only area that we are addressing that might otherwise be of concern. Because the State Department is overseas, they can go and check on local criminal records. So the data share will help us.
Mr. WATT. So I take it the combination of what the two of you are saying is that you believe this program is a good program and ought to be extended when the time comes for it to be extended, and as it is currently written.
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Mr. VIRTUE. That is right, we do.
Mr. WATT. And that the chairman's backhanded swipe at it in his opening statement is not justified.
Mr. SMITH. It will be justified and shown to be justified momentarily, Mr. Watts.
Mr. WATT. See, I knew we were going to have a little fireworks. I think I will even yield back the balance of my time so he can show me.
Mr. SMITH. Thank you, Mr. Watts, and I hope when we finish we agree that there was good reason for my mentioning 245(i).
First, let me go to that question of adjustment of status under the provision of the INS. The State Department Inspector General has made these key findings in regard to both asylum and 245(i) status adjustments. First, it is likely that the INS was not able to determine if a criminal history existed in the United States. Second, INS' operating instructions do not require adjudicators to check the home country criminal records of those applying for green cards from within the United States. That is that 245(i) category. Thus, quote, the INS has no way of ensuring that applicants are eligible for adjusting their status under criminal and security grounds of exclusion.
Third, in approximately 50 countries the State Department has dropped the requirement that visa applicants submit criminal records. Fourth, when consular posts adjudicate applications from nationals of countries other than that in which the post is located, they do not require criminal records from the alien's home country.
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Now, let's make a couple of things straight. Ms. Ryan, I would like to address the first question to you. As things stand right now, the State Department is, in fact, isn't it, issuing visas, and the INS is granting resident status without adequate information on the applicant's criminal background?
Ms. RYAN. As far as I know, Mr. Chairman, we do require police checks on all immigrant visa applicants overseas, except in those countries where it is a meaningless check, where the police are going to say
Mr. SMITH. Something like 50 countries where you don't require. That is my point. You have no way of knowing whether individuals who are being approved have criminal background or not. Is that the case?
Ms. RYAN. In those cases where we don't require a police check because it is irrelevant, they can get a clear check
Mr. SMITH. Right, I understand.
Mr. WATT. Would the gentleman yield just a second?
Mr. SMITH. I will be happy to yield.
Mr. WATT. Isn't it true that if you were not going to require that kind of documentation under the existing system, you wouldn't require it under the system where you require it to go back home and process?
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Ms. RYAN. That is right, it is the same.
Mr. WATT. So the process would be exactly the same.
Ms. RYAN. And we do check them through our own system.
Mr. WATT. So you would have the same concern if you sent them back and made them process back. That is my point.
Mr. SMITH. If an individual goes back to their home country and then applies, there are additional checks that are made that are not made if they apply here in the United States.
Ms. RYAN. There are police checks in those countries where it is a meaningful check.
Mr. SMITH. Right, which means you are going to catch some individuals, whereas if they applied under 245(i) they would not be caught.
Ms. RYAN. The way it works now, that is my understanding.
Mr. SMITH. Right. Now, Mr. Virtue, I want you to verify that criminal aliens are able to obtain status if they apply from this country without going back home.
Page 113 PREV PAGE TOP OF DOC Mr. VIRTUE. We do require a fingerprint check for people applying in the United States that is checked with the FBI databases. But if we are talking about foreign criminal recordsis that the question?
Mr. SMITH. That is my next question. Has the INS audited the fingerprint process for applications under section 245(i) to ensure that no benefit is granted and the full fingerprint check has been completed?
Mr. VIRTUE. We audited the process to ensure on an individual case or across the board that those are done. I mean, we are in the process of doing a complete review of theand a reengineering of that process, the fingerprint check between the INS and the FBI. That applies not just to naturalization cases but adjustment of status cases as well. But all of those questions are as applicable to adjustment of status in the United States under section 245, the adjustment provision itself, as they are to the exception created under section 245(i).
Mr. SMITH. I guess my point is the point Ms. Ryan made a minute ago with which I agree. When you leave this country and apply from another country, there are additional checks, there are additional ways to prevent criminals from getting into the country and it is a lot easier to prevent them from getting in than it is to confirm they are criminals once they get in this country.
That brings up a couple of related questions: Why should we permit aliens from high fraud countries, and there is a number of high fraud countries, to apply for visas outside their home countries? I think that is another line that leads to a lot of abuses.
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Ms. RYAN. Well, we do that
Mr. SMITH. Why should we send them back to their home countries?
Ms. RYAN. Well, some cases they can't go back. They can't go back to Iraq and apply
Mr. SMITH. Are there instances where they could go back and apply from their home country and we would have a better chance to catch some of these criminal elements?
Ms. RYAN. Mr. Chairman, I am going to have to do some research on this because I don't know how many third country applications we accept for immigrant visas. I don't know what the volume is on that. People just can't show up at a post and decide maybe it is easier to get a visa here as opposed to there so they are going to apply here. They have to have residence in the country; they just can't do that for immigrant visas, as far as I know.
[The information follows:]
THIRD COUNTRY NATIONAL APPLICATIONS
Question: Why does the State Department permit third country nationals to apply for visas outside of their home countries?
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Answer: Third country nationals (TCNs) are permitted to apply for nonimmigrant visas outside their home countries to facilitate international travel and trade. Many third country nationals are permanent or long-term residents of the country where they apply and generally can be evaluated on a par with the nationals of that country. They are considered to be applying ''at home.'' Other TCN travelers have legitimate reasons for applying for visas in a third country. For example, international business travelers may have an unexpected change in itinerary, foreign students resident in the United States may tour abroad without going home and require a visa to re-nter the U.S., or a visiting scholar in the U.S. might need a visa to return from a seminar in a third country.
However, in practice most TCN applicants find it difficult to qualify for a nonimmigrant visa outside their country of residence. The burden of proof is on applicant to establish proof of strong ties to his/her country of residence, and if the interviewing consular officer is unable to evaluate such ties, the applicant is refused and advised to apply at home. The Visa Office recently sent detailed guidance to all posts which counseled careful scrutiny of TCN nonimmigrant visa applications.
Irrespective of place of application, all visa issuing posts worldwide check applicants' names against a common lookout data base and apply the same requirements for security advisory opinions or other special clearances.
Similar standardized clearance procedures are in place for immigrant visa applicants. All immigrant visa applicants must submit a police certificate from their country of nationality or country of current residence, if the residence was in excess of six months beyond the age of sixteen. Applicants are also required to obtain police certificates from any other country where they have resided for twelve months or more beyond the age of sixteen. For some countries, police certificates are not requested because they are either not issued by the authorities or we have no confidence in their accuracy or integrity.
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Question: How many TCNs apply for IVs, that is, non-nationals applying in a country not of their birth?
Answer: Ordinarily immigrant visa applicants must apply in the consular district in which they are a resident. (Residence and not country of birth is the determining factor of where an applicant may apply.) There are two general exceptions: ''homeless'' applicants and applicants resident in countries whose immigrant visa processing is consolidated at one post.
''Homeless'' applicants are those in whose countries of residence the United States either does not have a diplomatic presence or does not offer visa services, such as Libya, Iraq and Iran. In order to standardize processing of such cases, the Department has designated specific posts at which ''homeless'' cases are processed.
The second category includes those applicants for whom immigrant visa processing has been consolidated, on a regional basis. For example, Moscow processes immigrant visas for most residents of the former Soviet Union. Posts that process these two types of cases generally have the required language capabilities and the familiarity with the documents issued in the applicants' countries of residence that enable them to fairly and carefully adjudicate the visa applications.
Posts do not report the number of IV applications which are proceed for applicants who are non-residents of their consular district. However, the majority of such applications are from persons in these ''homeless'' and consolidated processing categories.
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Mr. SMITH. It is my understanding that a number of these individuals could in fact go back to their home country and apply from their home country. Not all of them are prevented. I understood that the State Department agreed that a ready source of a lot of fraudulent documents and visas were from individuals who were not applying from their home country.
Ms. RYAN. Yes, that is true, particularly if they are in another language than that of the country in which they are applying or not in English, it is difficult for us to recognize, in some cases, the fraud.
Mr. SMITH. Thank you. I am going to go on to Mr. Watt. I have one more set of questions. What I want to do before we end the day is to focus on solutions. We are all familiar with the problems. But I will get to that in just a minute. Meanwhile, Mr. Watt is recognized.
Mr. WATT. I just have one more question, maybe two more questions.
Ms. Ryan, you referred in your statement to immigration-push countries, those having the heaviest fraud. Can you identify which countries those are? I mean, do you have a list of the ones that you were making reference to?
Ms. RYAN. There are any number of them, Mr. Watt. We see a great deal of fraud in the People's Republic of China. We see a great deal in Nigeria. We see a great deal of fraud in the Dominican Republic. I can get you a list of where we think the highest fraud is.
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Mr. WATT. That might be helpful.
[The information follows:]
LIST OF IMMIGRATION-PUSH COUNTRIES
Question: Which are the countries where the Department of State encounters high fraud because of immigration-push?
Answer: Those countries experiencing the pressures to emigrate for economic reasons include: China, India, Pakistan, Bangladesh, Sri Lanka, Mexico, Brazil, the Dominican Republic, Haiti, Jamaica, Ghana, Nigeria, Russia, Poland, Viet Nam and the Philippines.
Nationals of such countries often turn to fraud to immigrate to the U.S. Though these alien flows are difficult to quantify, the U.S. Coast Guard recently estimated that 20,000 illegal Chinese enter the Western hemisphere each year by sea alone, contributing to the estimated 50,000 illegal Chinese who enter the U.S. annually.
Some countries, particularly those close to the U.S. encounter high fraud due to illegal aliens in transit. These include Mexico, Canada, the Bahamas, the other countries of the Caribbean and of Central America.
Mr. WATT. The other thing you suggested was narrowing the number of documents presented for review, such as the birth certificates. How could we do that at this level?
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Ms. RYAN. I was speaking there of passport applicants, American citizens who are applying for passports, because there are any number of municipalities and counties and cities, as well as the States, that issue documents.
Mr. WATT. That is always going to be the case. We are not going to nationalize
Ms. RYAN. That has always been the case. What would help us is if some security features would
Mr. WATT. Maybe the Republicans. They don't believe in States' rights.
Ms. RYAN. You know, more secure paper, where if you tried to alter a name or something it would be immediately obvious that an alteration had been tried. We would like to get away from the use of abstract birth certificates which some States still issue. Mr. Vazquez may have other ideas.
Mr. WATT. I mean, that might solve itself as a problem over time, but we still have got a bunch of people in this country who don't even have birth certificates. How are we dealing with those?
Ms. RYAN. Then they produce secondary evidence, an affidavit from somebody who knows them.
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Mr. WATT. The minute you start narrowing and narrowing, you are making it more and more difficult for people to access the system.
Ms. RYAN. Exactly. But that is the tradeoff.
We have also a requirement to provide customer service, and these people after all, most of them, are American citizens. So we don't want to make it impossible for them to get a passport. But we would like to reduce the level of fraud that we see.
Mr. WATT. All right. I didn't mean to cut Mr. McKeever offMr. Vazquez, I am sorry.
Mr. VAZQUEZ. I was going to say, as Assistant Secretary Ryan mentioned, there are two avenues to lessen fraud. One is to improve the technical quality of the so-called breeder documents, and this can be done in ways consistent with our decentralized system, using security paper, not using abstracts as often. You can put in line descriptors, other things that make it tougher to fake these documents and make it more obvious when you do, and the second part which deals with your observation, that we need to have access to the system for those who don't have these kinds of documents. As important as physical security is for documents, it is just as vital to provide better training for our examiners. We have a continuous program of training passport examiners and agents and recognizing patterns and techniques that are used to fool the system. I think you have to use those two things together realizing there is always a tension between rapid service and fraud detection.
Page 121 PREV PAGE TOP OF DOC Mr. WATT. Thank you, Mr. Chairman.
Mr. SMITH. Thank you, Mr. Watt.
I want to go back, Mr. Nelson, and go back to the GAO report, and then focus on solutions. But in your report you mentioned that you had found mixed results. And you mentioned three particular areas, technical problems, inadequate cooperation, and lack of compliance. It seems to me that those are three areas that should be able to be remedied fairly easily, fairly quickly with the right attitude and right priorities.
What I would like to ask you to do, if you would, is to respond to your statement where you said improvements are still needed. What specific improvements would you recommend, and then I am going to ask others that same question?
Mr. NELSON. The improvements that I would recommend are improvements in the technical quality of the documents and improvements in compliance with control procedures. Being from an accounting organization, we always place emphasis on accountability for documents and for use of equipment, and for reconciliation at the end of the day. What we have found is that in many places this was not occurring, and that exposes the process to fraud. So of course we would recommend that we have adequate resources in the consulate section to make sure that the safeguards are in place and that they are adhered to.
The State Department has a very aggressive plan for improving the quality of the documents and its technical capability and we think that should be pursued and it should be vigilant in doing so.
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The last thing I would like to mention is dealing with these types of problems require a great deal of cooperation among the various entities involved, and I think someone has to take a leadership role in ensuring that the activities of the State Department, INS, as well as the criminal agencies, are well coordinated and that they are working well together.
Mr. SMITH. Thank you, Mr. Nelson.
Mr. Virtue, let me jump to you. We have heard from the Inspector General today and others that a big part of the problem is basically the INS and State Department aren't sharing data. What is the INS going to do to make sure all of the relevant data is, in fact, shared and that we do reduce the amount of visa fraud and document fraud that we see?
Mr. VIRTUE. As Ms. Ryan suggested in her testimony, we have a project or ongoing program of sharing data called Data Share between the State Department and other enforcement agencies as well to take advantage of the information that the State Department has gained from overseas that we can use here, as well as providing our information, for example, on persons who have been deported from the United States would be available to the consular officers.
Mr. SMITH. Do you expect to see a tangible reduction in the use of fraudulent documents in the next 6 months as a result of these improvements?
Mr. VIRTUE. Well, as a result of these improvements, they will have more information available to the consular officers as well as the people in the United States dealing with benefit applications.
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In terms of document fraud itself, we believe that improvement to the documents and the ability to both capture and verify biometric information, we see as a very important aspect of the integrity of the system, and we could talk about this all day in terms of whether you even need documents in this whole process. The most important aspect of that is the database itself and the ability to verify that the person who we are dealing with is the person we have.
Mr. SMITH. I hear you saying that you are going to make it a higher level priority and you are going to dedicate more resources to that project; is that correct?
Mr. VIRTUE. That is correct, not only with respect to document fraud but benefit application fraud as well.
I just want to say in reaction to the statement that INS has done nothing in terms of flagging records and going after beneficiaries, that is not accurate. We, for example, in Operation Desert Deception, issued 4,000 notices of intent to deny and have another 4,000 prepared to be denied. Also, the four service centers have created data bases dealing with a large scheme fraud so they can check those applications against the database. So we think flagging is the ultimate answer, but I think until now we have paid more attention and have focused our resources necessarily on the supply side of this equation.
And so I think Mr. Bromwich's report and the suggestions we have heard here also suggest a need to address more the demand side and make it less beneficial for people.
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Mr. SMITH. I hear you.
Mr. Bromwich, do you want to respond to the contradiction of your statement that the INS has done nothing?
Mr. BROMWICH. Well, I suspect that Mr. Virtue is talking about things that have been done that postdate the work we have done, because I am not familiar with Operation Desert Deception, and he can correct me if I am wrong, but we did not find those steps to be taken during the time period we were examining. If INS is taking those steps now, we commend them for it.
Mr. SMITH. Thank you.
Let me go to Ms. Ryan, and I will pick up a couple other witnesses in a minute, but Ms. Ryan, what is the State Department going to do to better get data from the INS and better use data from the INS in the next few months?
Ms. RYAN. I would tell you we now have closer cooperation with the Immigration Service than ever before. We are getting real-time deportation information in our database from them; we are exchanging information on visa issuance and visa refusals; we use the same visa ineligibility codes; and we are working constantly to improve our coordination and our cooperation. So I can pledge to you that we will continue to do that and I think we have made advances, both of us, in the last year on this very issue.
Page 125 PREV PAGE TOP OF DOC Mr. SMITH. Thank you, Ms. Ryan, and I hope and expect that is going to be the case and we will have another hearing on this in a few months to see how the progress is going.
Let me go back to all individuals who haven't responded already during this period and ask them what the most important antifraud initiatives are that could be taken. And Mr. Blume, we have overlooked you but I want to start with you and hit everything along the way. What is the most important antifraud initiatives that we could take?
Mr. BLUME. Well, I think the first one is the feeder documents that are used. I think the more you can do to control those, the better off you are, and again I would emphasize that more than just a name-based information system is needed, like biometrics.
Mr. SMITH. Mr. Cutler.
Mr. CUTLER. Well, again, biometrics are essential. I think it is important that we always, if it is feasible, adjudicate applications with the physical file in front of the adjudicator. I know there are times when that is not done and it needs to be done, for people who file multiple I90 applications, sometimes you would find five or six in a file and wonder how you could lose, supposedly, six alien cards in a year.
Correct me if I am wrong, but it has been my experience that at the State Department, after a relatively short period of time, the many visa issuing posts would dispose of the applications for non-immigrant visas, and I think that would be a key piece of evidence if we are going to prosecute someone for visa fraud. I think that document ought to be maintained for the statute of limitations or 5 years, so that would go a long way. The penalties are there, but we need the evidence to build the case.
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Mr. SMITH. That is my impression as well. Thank you. Mr. West.
Mr. WEST. From the immigration law enforcement perspective, I think there needs to be recognition of the highest levels of INS management as well as field management that criminal fraud activities is indeed a priority that needs to be looked at and focused on in a more significant way. Given the scope and the nature of immigration fraud violations, ranging from a quantitative side, thousands of regular illegal aliens attempting to come here and gaining status here through fraud, to the qualitative side of international crime syndicates and terrorist organizations, all involved in immigration fraud.
And as you, Mr. Chairman, so correctly said in your opening statement, the Congress, through the latest statutory amendments, has given INS law enforcement the most powerful tools it could possibly hope to have relative to combatting immigration fraud in whatever form it may take, and there needs to be recognition by INS management and a focus to translate that into effective action in the field.
Mr. SMITH. Thank you, Mr. West. Mr. Epstein.
Mr. EPSTEIN. I wanted to bring up one area that we hadn't mentioned, and I think it is very important. And that is the documents that the INS is preparing to come out with, the new improved EAD documents, the 551s with the greater security features and so on, if we are looking at antifraud initiatives I think one of the areas we ought to consider and something we are doing in the INS and that is the education of the person who is going to be looking at these documents. The biggest problem we have done in the past is made secure documents, had very expensive security features, and haven't taught or made that information available to the employer. So the counterfeiter has not had to duplicate those features because the employer was not even looking for them. I think we have corrected that. We are coming out with a much more secure card, the best card we have ever had, and going into the employer and teaching them this is what you look for. There is no point in producing very secure documents with expensive security features if you are not going to educate the employer to look for these features.
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The poor quality counterfeits we see on the streets selling for $35 are going to be gone with the new cards, and what we are going to see is much fewer counterfeit documents. We are going to see some very high quality. But the point is we are going to cut a great many of them off the street.
Mr. SMITH. Thank you. Mr. Yates.
Mr. YATES. Mr. Chairman, I think the most important thing is the development of a comprehensive approach to an antifraud strategy, and in a broader sense a comprehensive approach born of interior enforcement for INS to make sure we are dealing with these issues. Within that, it includes working on our interface with the Department of State to ensure that we increase our level of information communication, and I would play a compliment to the Department of State because we are now seeing on the information coming back on petitions, we are able to deny the vast majority where the Department of State suspects fraud, and that was not the case 3 years ago. So Ms. Ryan, my compliments.
Mr. SMITH. She will take the compliment.
Let me go up, we have a vote coming up and we are out of time. Mr. McKeever.
Mr. MCKEEVER. Yes, sir, I certainly agree with the rest of the panel, that biometrics are the wave of the future, but I would also submit that resources are also an important part of this, human resources. After you get by the biometrics and the computer, somebody has to go out in the field and investigate, somebody has to be in the consulates and adjudicate visa applications. And I think we need to keep that in mind to make sure that we have enough people out there, both fraud coordinators and investigators.
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Mr. SMITH. Thank you. Mr. Vazquez.
Mr. VAZQUEZ. Yes, echoing Mr. McKeever, in my area, two things are crucial. One is good information rapidly transmitted to consular offices and passport adjudicators; and the second is good training before they get to their jobs and continuous training on the job.
Mr. SMITH. Thank you.
Mr. Virtue, last quick question for you, not to blind side you, but an article in The Washington Post yesterday, there was reference made to a recent INS intelligence report about thousands of Chinese are using the L1 visa as a means of legalized smuggling, and there was another reference to another internal report on the problems. Have we seen that or can we see that or not?
Mr. VIRTUE. Thecertainly I mentioned in my opening statement about the Asian
Mr. SMITH. Immigration fraud has increased dramatically in recent years and currently pervades all aspects of INS responsibility, a recent INS report said.
Mr. VIRTUE. We saw the article yesterday morning. We are not sure exactly what report the article is referring to. If there is such a report, we will make it available.
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Mr. SMITH. Thank you.
[The information was not provided at time of printing.]
Mr. SMITH. We thank you all, highly informative today, requires followup. We appreciate the bipartisanship as well as the consensus among you all as to what needs to be done. Thank you.
[Whereupon, at 12:02 p.m., the subcommittee adjourned.]
A P P E N D I X
Correction to Paul Virtue's Written Statement for ''Current Resources To Combat Fraud''
The Investigations program was originally funded for 100 positions; however, in FY 1996 the Examinations Fee Account was reduced by 81 positions as part of a National Performance Review initiative. Of the 81 positions, 6 were in the Investigations program. Therefore, in FY 1997 the Investigations program is only authorized 94 positions. The 94 positions are as follows: 90 criminal investigators, 3 supervisory criminal investigators, and 1 management assistant. All of the positions have been funded.
The reference to modular costs is incorrect. The reference that the modular cost for one special agent is $142,105 refers only to first year funding for a new position. The figure for FY 1997 is actually $147,281. Modular cost is a technique used to ensure that all costs associated with a new position are provided in the initial request for the position. In subsequent years, some of the overhead costs are not funded in the program that originally received the funds with the position in year one. Examples include vehicle replacements, training, relocations, etc.
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VISA FRAUD AND IMMIGRATION BENEFITS APPLICATION FRAUD
IMMIGRATION AND CLAIMS
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
May 20, 1997
Serial No. 42
Page 131 PREV PAGE TOP OF DOCPrinted for the use of the Committee on the Judiciary
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, Illinois, Chairman
F. JAMES SENSENBRENNER, Jr., Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR SMITH, Texas
STEVEN SCHIFF, New Mexico
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
BOB INGLIS, South Carolina
BOB GOODLATTE, Virginia
STEPHEN E. BUYER, Indiana
SONNY BONO, California
ED BRYANT, Tennessee
STEVE CHABOT, Ohio
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
ASA HUTCHINSON, Arkansas
EDWARD A. PEASE, Indiana
CHRISTOPHER B. CANNON, Utah
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JOHN CONYERS, Jr., Michigan
BARNEY FRANK, Massachusetts
CHARLES E. SCHUMER, New York
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
STEVEN R. ROTHMAN, New Jersey
THOMAS E. MOONEY, Chief of Staff-General Counsel
JULIAN EPSTEIN, Minority Staff Director
Subcommittee on Immigration and Claims
LAMAR SMITH, Texas, Chairman
ELTON GALLEGLY, California
SONNY BONO, California
WILLIAM L. JENKINS, Tennessee
Page 133 PREV PAGE TOP OF DOCEDWARD A. PEASE, Indiana
CHRISTOPHER B. CANNON, Utah
ED BRYANT, Tennessee
MELVIN L. WATT, North Carolina
CHARLES E. SCHUMER, New York
HOWARD L. BERMAN, California
ZOE LOFGREN, California
ROBERT WEXLER, Florida
CORDIA A. STROM, Chief Counsel
EDWARD R. GRANT, Counsel
GEORGE FISHMAN, Counsel
MARTINA HONE, Minority Counsel
C O N T E N T S
May 20, 1997
Smith, Hon. Lamar, a Representative in Congress from the State of Texas, and chairman, Subcommittee on Immigration and Claims
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Bromwich, Michael R., Inspector General, Department of Justice
Nelson Benjamin F., Director, International Relations and Trade Issues, National Security and International Affairs Division, General Accounting Office, Accompanied by James M. Blume, Assistant Director
Ryan, Mary A., Assistant Secretary, Bureau of Consular Affairs, Department of State, Accompanied by Ed Vasquez, Director of Consular Affairs, Fraud Prevention Program and Thomas McKeever, Diplomatic Security, Criminal Investigations Division
Virtue, Paul W., Acting Executive Associate Commissioner, Office of Programs, Immigration and Naturalization Service, Accompanied by Gideon Epstein, Chief Forensic Document Analyst, Forensic Laboratory, William West, Chief, Investigative Division Special Operations Unit, Miami District, and Michael Cutler, Senior Special Agent, New York District
Yates, William A., Director, Vermont Service Center, Immigration and Naturalization Service
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Bromwich, Michael R., Inspector General, Department of Justice: Prepared statement
Nelson Benjamin F., Director, International Relations and Trade Issues, National Security and International Affairs Division, General Accounting Office:
Page 135 PREV PAGE TOP OF DOCAdditional information L38, 56, 57
Ryan, Mary A., Assistant Secretary, Bureau of Consular Affairs, Department of State: Prepared statement
Virtue, Paul W., Acting Executive Associate Commissioner, Office of Programs, Immigration and Naturalization Service: Prepared statement
Yates, William A., Director, Vermont Service Center, Immigration and Naturalization Service: Prepared statement
Correction to Paul Virtue's written statement for ''Current Resources to Combat Fraud''
(Footnote 1 return)
Passports and Visas: Status of Efforts to Reduce Fraud (GAO/NSIAD9699, May 9, 1996).
(Footnote 2 return)
The nine posts are Canberra and Sydney, Australia; London, England; Guatemala City, Guatemala; Tokyo, Japan; Nairobi, Kenya; Seoul, Republic of Korea; Mexico City, Mexico; and Johannesburg, South Africa.
(Footnote 3 return)
Annual reports are required by the Federal Managers' Financial Integrity Act.