Employment-Visa Program and Fraud Attract Concern
By Marjorie Valbrun
The Wall Street Journal, July 12, 1999

WASHINGTON -- The proposed employee from Casablanca was no Ingrid Bergman,
but she did turn out to be playing a role.

Using a law designed to bring skilled, foreign workers to the U.S., a local
business filed a petition to hire the worker from Morocco as "comptroller"
to "direct the financial activities of the company." The Immigration and
Naturalization Service dutifully approved the request for a H-1B temporary
work visa for foreigners with knowledge in specialty occupations.

But when the visa application was forwarded to the U.S. consulate office in
Casablanca, the office made a discovery: The company that referred to
itself as the "corporate body" is a doughnut shop in Maryland, owned by the
prospective worker's sister and brother-in-law. What's more, the
23-year-old worker speaks no English and has no prior work experience
relevant to U.S. accounting standards.

Skirting the Law

What seemed like a routine visa request turned out to be another
increasingly common attempt to skirt the law. Critics say such cases also
help explain why a newly increased cap on the annual number of H-1B visas
was reached in record time -- just six and a half months after Congress
nearly doubled the yearly ceiling to 115,000 from 65,000.

Last month, the INS announced it would stop accepting applications for this
fiscal year, shutting out employers who had hoped to bring in new
employees. GOP Rep. Elton Gallegly of California, a member of the House
immigration subcommittee, says the H-1B visa program should no longer be
supported by the government "until we get a handle on identifying and
aggressively mitigating the fraud and abuse."

Such efforts are politically sensitive, however. The program's corporate
advocates, including high-technology companies in Silicon Valley, say the
abuses are exaggerated. What's more, the deep-pocketed executives of these
companies are being heavily courted by presidential hopefuls Vice President
Al Gore and GOP front-runner Texas Gov. George W. Bush, both of whom
support the visa program. Recently, while wooing high-tech executives in
Palo Alto, Calif., Mr. Bush called for raising the visa cap, saying that
companies facing worker shortages would otherwise be hurt.

While the cases of abuse sometimes involve small businesses such as
family-owned dry cleaners and mom-and-pop grocery stores, more often,
officials say, the violators are larger, more-sophisticated front
companies. These concerns, acting as foreign subsidiaries here but with
little more than a U.S. post-office box, apply for visas for bogus
employees who are unqualified workers desperate to live and work in America.

Acting as Employment Agencies

In other cases, companies secretly act as employment agencies, advertising
their services abroad while petitioning for visas here on behalf of
foreigners who have paid the concerns exorbitant fees. Once the visas are
issued, the agencies then either attempt to find real jobs for the
"workers" in the U.S. or let them fend for themselves once they arrive.
Sometimes potential employees commit the fraud -- without a company's
knowledge -- by applying for jobs even though they lack the requisite
experience or education.

"Every fraudulent H-1B visa has real impact on U.S. companies filing
legitimate applications," says GOP Rep. Lamar Smith of Texas, chairman of
the House subcommittee on immigration. The phony applicants prevent
legitimate foreign specialty workers -- mostly computer programmers and
engineers -- from being employed here. The abuses also further aggravate a
shortage of workers in the high-tech industry, which is highly dependent on
H-1B visas.

As proof of their contentions of widespread fraud, critics point to India,
where more H-1B visas are issued than anywhere in the world. Indian
nationals account for more than 40% of all H-1B visa recipients. The U.S.
consulate in Chennai (formerly Madras), India, issued more than 20,000 H-1B
visas last fiscal year, more than any other post in India, according to
Bill Yates, acting deputy executive associate commissioner of immigration
services at the INS.

In May, Mr. Yates testified at a congressional hearing that as early as
1996 the State Department consulate in India determined that among visas
issued there, a "significant percentage of H-1B petitioners, almost all of
whom were computer programmers, were misrepresenting their academic or
professional credentials."

Investigation of Petitioners

As a result, the consulate and INS service centers last year began jointly
investigating the education and work-experience claims on suspect
applications submitted to the INS before the INS ruled on the petitions. By
March 31 of this year, Mr. Yates said, the agencies determined that of
3,247 cases from India referred to the consulate's antifraud unit, 21% of
the work-experience claims made to the INS were definitely not true and
another 29% "were either probably or possibly fraudulent." In addition, the
agencies couldn't verify the authenticity of close to 45% of the claims
made on the H-1B petitions, he said.

Visa fraud isn't limited to H-1B visas. There are 10 different types of
temporary work visas, and more than 400,000 of them were issued in 1996
alone. What makes H-1B visa fraud different is the volume of applications
for such visas and the pressure it puts on thousands of U.S. employers who
can't fill job openings. The fraud also forces legitimate H-1B visa
applicants to wait months before they are approved, or until a fraudulent
applicant is discovered and a slot made available.

But trade groups representing high-tech companies and other businesses that
aggressively lobbied Congress for the increase in the H-1B visa cap
question the scope of the alleged fraud. Lynn Frendt Shotwell, legal
counsel of the American Council on International Personnel Inc., says the
45% of claims that couldn't be verified in India was an inaccurate
measurement since the claims were part of a group singled out precisely
because they seemed suspicious.

"I don't think it's reflective of the program at large. I think the fraud
numbers are overstated," she says, adding that she believes the level of
fraud is under 5% overall.

Rep. Smith begs to differ. "The fraud number from the State Department
speaks for itself," he replies.

Legitimate Applicants Hurt

Critics also argue that the lengthy and cumbersome application process
hurts legitimate applicants and companies more than fraud. State Department
administrators say they do try to avoid delaying legitimate businesses
while they weed out suspect ones.

Sandy Boyd, assistant vice president for policy at the National Association
of Manufacturers, an industry trade group, says there is no way to
accurately determine the level of fraud because the INS doesn't keep
detailed data on all H1-B visas issued. Knowing which companies are heavy
users of the program, and may be more prone to abuse it, would better
identify where to look for the fraud, she says.

"We'd like to know how the 115,000 visas are used," says Ms. Boyd, who also
helps lead the American Business for Legal Immigration. "Who used them?
What are the occupations? Where have those visas gone? Just basic data."

As required by law, the INS plans to begin compiling complete information
on the occupations of H-1B beneficiaries, as well as their education and
compensation, in the next fiscal year that begins in October.

Meantime, business groups say that companies with clean records should be
given fast-track approval, bypassing the long delays and paperwork. "It
seems to me it would help focus enforcement priorities where they ought to
be focused," Ms. Boyd says.