USCIS Increases Scrutiny on Small Companies Filing H-1B Petitions

I previously reported on a September 2008 USCIS report, entitled H-1B Benefit Fraud & Compliance Assessment, finding that small companies are more likely to violate H-1B visa rules. USCIS apparently now has begun making procedural changes consistent with the report.

The American Immigration Lawyers Association believes that USCIS has in some cases made overly broad requests for evidence from H-1B petitioners, seeking for example: “extremely detailed employer financial information; requests for proof of existence of an employer’s place of business (copies of leases, verification of proper use by zoning or planning authorities, letters from landlords, etc.); comprehensive lists of all employees, or all nonimmigrant employees, along with supporting payroll and tax information; requests for job descriptions in extreme detail; an explanation of the specialty nature of the occupation for which the nonimmigrant worker’s services are sought (especially the obvious); requests for prospective itineraries; copies of contracts where the employee will be working on a project for a third party….”

Of course USCIS should crack down on fraud wherever it is found. However, it seems to me that it is wrongheaded to crack down on small businesses. For H-1B visas the main problem is that the rules are hyper technical. They consist of hundreds of pages of regulations from USCIS, the U.S. Department of Labor, and the U.S. Department of State. In my opinion, the best way to reduce technical violations is to simplify the bewildering maze of rules.

With our economy in a slump, H-1B visas are a good thing.  They’re good for companies, who can recruit the best talent wherever it can be found. They’re good for U.S. workers too because for each H-1B worker hired the employer pays a $750 or $1500 “ACWIA” fee to the federal government to be used for training U.S. workers so our country can compete better in the global economy.

Record Number of Chinese Students in U.S. Universities

In academic year 2007/08, there were 81,127 students from China studying in the United States, up 19.8% from the previous year. That makes China the second-leading place of origin for students coming to the United States, following India (94,563). These figures were released in a study called Open Doors: Report on International Educational Exchange, published annually by the Institute of International Education with support from the U.S. Department of State.

In my opinion, the record numbers are in part attributable to aggressive recruiting by U.S. schools in China as well as China’s booming economy. Also, the numbers mark a rebound in Chinese students confidence in the U.S. visa system. After 9/11, Chinese students were disappointed by a high rate of visa denials and long security checks that delayed visa issuance by months for some.

According to the report, the majority of Chinese students study at the graduate level: 20.3% undergraduate, 65.4% graduate students, 4.8% other, 9.5% optional practical training.

China sent no students to the U.S. from the 1950s until 1974/75. In the 1980s, numbers of Chinese students grew dramatically, and in 1988/89, China displaced Taiwan as the leading sender. China was the leading place of origin from 1988/89 until it was displaced by Japan in 1994/95. In 1998/99, China overtook Japan as the leading sender, and remained in the number one position until being overtaken by India in 2001/02, and has remained in second place since.

Year: # of Students From China (% of Total Foreign Students in U.S.):

2007/08: 81,127 (13%)
2006/07: 67,723 (11.6%)
2005/06: 62,582 (11.1%)
2004/05: 62,523 (11.1%)
2003/04: 61,765 (10.8%)
2002/03: 64,757 (11.0%)
2001/02: 63,211 (10.8%)
2000/01: 59,939 (10.9%)
1999/00: 54,466 (10.6%)
1998/99: 51,001 (10.4%)
1997/98: 46,958 (9.8%)
1996/97: 42,503 (7.8%)
1995/96: 39,613 (8.7%)

New U.S. Embassy Opens in Beijing

 

New U.S. Embassy in Beijing

It looks like the new U.S. Embassy in Beijing will open for consular services on Tuesday, October 28, 2008. The Embassy’s notice is here.

The new location is No. 55 An Jia Lou Road. The entrance for consular services, including American citizen services and the visa section, is located at the Embassy’s east gate at the intersection of Tian Ze Road and An Jia Lou Road, close to Ladies’ Street (Nüren Jie) and Laitai Flower Market. The nearest subway location is the Liangmaqiao stop on line #10.

USCIS Finds Small Companies More Likely to Violate H-1B Rules

H-1B Benefit Fraud & Compliance Assessment, a study published by U.S. Citizenship and Immigraton Services last month, finds that small companies are more likely to violate the rules related to H-1B temporary work visas. This finding is unsurprising because–as my clients constantly remind me–the rules are hyper technical. They consist of hundreds of pages of regulations from USCIS, the U.S. Department of Labor, and the U.S. Department of State. In my opinion, the best way to reduce technical violations is to simplify the bewildering maze of rules.

Each year, 65,000 H-1B visas are made available to professionals with at least a bachelor’s degree to work to work for employers paying at least the “prevailing wage” for the job in the geographic area. For background about H-1B visas, see here.

USCIS’ study found fraud or technical violations in 20% of the 246 cases investigated. Technical violations included violations such as:

  1. The employer required the H-1B worker to pay the $750 or $1500 “ACWIA” filing fee, which by law cannot be passed on to the worker.
  2. The employer failed to pay at least the prevailing wage under U.S. Department of Labor rules.
  3. The H-1B worker was working in a geographic location not specified in the paperwork filed with the U.S. Department of Labor.
  4. The employer put the H-1B worker on unpaid leave (“benching”).
Based on the study, USCIS found that being a small company (25 or fewer employees, or gross annual income under $10 million) or being a new company (in existence for fewer than 10 years) is an “indicator” that fraud or technical violations are more likely. USCIS promised to “make procedural changes” to go after such violators.
It seems to me that it’s wrongheaded to crack down on small businesses. Instead, USCIS should crack down on fraud, wherever it is found. And USCIS should simplify the maze of H-1B rules to make it easier for small businesses to comply with the law.
H-1B visas are a good deal for businesses because they allow companies to recruit the best talent wherever it can be found. H-1B visas are a good deal for U.S. workers too because for each H-1B worker hired the employer pays the above-mentioned $750 or $1500 “ACWIA” fee to the federal government to be used for training U.S. workers so our country can compete better in the global economy.
In this economic climate, where the government just bailed out big business on Wall Street to the tune of $700 biliion, we should be making it easier for small business to compete by simplifying regulations rather than punishing small business for hyper-technical violations of byzantine rules.

EB-5 Investor Visa Update from USCIS

On Sept. 22, 2008, U.S. Citizenship and Immigration Services released a powerpoint presentation with updates on the EB-5 investor visa program for Fiscal Year 2008. Here are the highlights:

  1. 12 new EB-5 regional centers were approved.
  2. 1017 Forms I-526, Immigrant Petitions for Alien Entrepreneurs, were filed.
  3. 350 Forms I-829, Petitions by Entrepreneurs to Remove Conditions, were filed.

What does this mean? First, with more approved EB-5 regional centers, investors now have more choices for passive investments, meaning more options for EB-5 investments that don’t require investors to establish and manage their own businesses. Second, while EB-5 filings are up, it’s still hard to call the EB-5 program popular–only a fraction of the total 10,000 visas per year are being used. You can see the powerpoint presentation here.

U.S. Visa Invitation Letters for Sale—$16,000 a Piece

 

The U.S. State Department has announced it is searching for Philip Ming Wong, a fugitive who has been indicted for his role in a visa fraud scheme.

“Operation Shell Games” Targeted Brokers Who Supplied Chinese Citizens with False Documents and Fraudulent Visa Applications 

United States Attorney Joseph P. Russoniello and Diplomatic Security Service (DSS) Special Agent In-Charge, Patrick Durkin announced that PHILIP MING WONG has been indicted for his role in a non-immigrant visa fraud scheme.

According to an indictment filed on September 9, 2008, PHILLIP MING WONG and his coconspirators are alleged to have operated three Bay Area companies, which existed mostly on paper and conducted no legitimate business from 1999 through 2001. PHILLIP MING WONG and his coconspirators are further alleged to have sold invitation letters from these three false or shell companies to 119 ordinary citizens of China for fees ranging up to $16,000 a piece. Lastly, it is alleged that these citizens then applied for non-immigrant visas at the American Embassy in China, using the false invitation letters and masquerading as Chinese business people doing commerce with the three false companies. In many of the 119 cases, the United States Embassy in China accepted the invitation letters sold by PHILLIP MING WONG and his co-conspirators, and issued non-immigrant visas to the Chinese citizens posing as business travelers.

PHILLIP MING WONG was indicted on one count of Conspiracy, in violation of 18 U.S.C. § 371, eight counts of Visa Fraud, in violation of 18 U.S.C. § 1546, six counts of Harboring Aliens for Financial Gain, in violation of 18 U.S.C. § 1324, and one count of Money Laundering, in violation of 18 U.S.C. § 1956. The maximum statutory penalty for these violations is five years imprisonment per count.

“Operation Shell Games” is yet another example of the Diplomatic Security Service’s vigilance in combating visa and passport fraud. We investigate multi-defendant criminal enterprises that broker in false visas, false immigration forms, and other false documents, to keep imposters and criminals out of the country,” Special Agent In-Charge Patrick Durkin of the Diplomatic Security Service, San Francisco Field Office stated.

PHILLIP MING WONG is considered a fugitive and is believed to be residing in Macao, the People’s Republic of China. Anyone with information about PHILLIP MING WONG’s whereabouts or any other false or fraudulent visa scheme is encouraged to contact DSS at (415) 705-1176.

Please note, an indictment contains only allegations against an individual and, as with all defendants, the defendants must be presumed innocent unless and until proven guilty.

Hat tip to the Experience Not Logic blog.

Gazing into the Crystal Ball: Possible Future Changes in U.S. Visa Processing

If you had just one chance to gaze into a crystal ball, you probably wouldn’t use the opportunity to learn about the future of U.S. visa processing in China. So you’ll have to settle with glimmers of the future from a recently published U.S. Government Accountability Office (GAO) report, Border Security: State Department Is Taking Steps to Meet Projected Surge in Demand for Visas and Passports in Mexico (July 2008).

As background, U.S. consular facilities in China are facing pressure to adjudicate a rapidly-increasing number of visa applications without expending significant additional resources. On top of that, believing that wait times for nonimmigrant visa (NIV) interviews were excessive, in February 2007, the State Department announced a worldwide goal of interviewing NIV applicants within 30 days.

Recent State Department initiatives in Mexico to meet this challenge may offer hints about changes that are coming in China:

  • Adding temporary interview windows: Consular officers in Mexico are expected to conduct 20 NIV interviews per hour. Assuming windows are open 200 days a year, 20 interviews per hour for 8 hours wouild result in 32,000 interviews per window, per year. To meet surging visa demand, consular posts are constructing additional temporary windows.
  • Hiring temporary adjudicating officers with renewable 1-year contracts: These officers will receive the same 6-week Basic Consular Course at the Foreign Service Institute in Arlington, Virginia, as permanent Foreign Service officers. Officials anticipate the same level of productivity and supervision requirements as they would expect from new career Foreign Service officers.
  • Outsourcing: A pilot program in Mexico outsources to private contractors a portion of the NIV application process. This includes electronically capturing applicants’ biometric data (photo and fingerprints) as well as scanning visa application forms at off-site facilities. This is part of an effort by the State Department to establish a new service delivery model for processing NIVs in response to long-term growth in demand worldwide. State envisions expanding this model to other high-demand posts worldwide to help expand the capacity of consular operations without incurring the costs of building additional facilities. (This topic was also addressed by the State Department in DOS Replies to AILA Liaison Questions: AILA-DOS Liaison Meeting Nov. 5, 2008 at 4, AILA Infonet Doc. # 09022660.)

Any guesses as to which of these strategies will be implemented in China?

Update: Consular Recommendations to Revoke Visa Petitions

Our law firm is often retained to represent clients where a U.S. Consulate has returned the visa petition to USCIS to consider revocation. This process is slower and less transparent than it should be. Still, this update explains that recently there have been some minor improvements in the process. These improvements were mentioned by Jonathan R. Scharfen, Acting Director of USCIS, in a recent response[1] to the USCIS Ombudsman’s recommendations for reform.[2]

Background

Generally, USCIS approval of a visa petition is a prerequisite for the issuance of a visa by a U.S. consulate abroad. For example, USCIS must approve an employer’s H-1B petition before the worker applies for a visa at a U.S. consulate. Similarly, USCIS must approve a U.S. husband’s immigrant visa petition before the wife can apply for an immigrant visa at a U.S. consulate.

Even after a petition has been approved, USCIS can revoke it for good cause.[3] And consular officers have instructions to return petitions to USCIS[4] for revocation where fraud, misrepresentation, or ineligibility is likely to lead to revocation.[5]

If USCIS concurs with the consular officer’s reasoning, USCIS issues a “Notice of Intent to Revoke” to give the petitioner an opportunity to respond.[6] Once the response from the petitioner is received, USCIS will either reaffirm the petition and send it back to the consulate for processing, or revoke the petition. A petitioner may appeal revocation to the Administrative Appeals Unit.

Ombudsman’s Recommendations Accepted by USCIS

* USCIS Receipt Notice: The Ombudsman recommended that USCIS issue a receipt notice to the petitioner upon receipt from the Consulate of a returned petition. Happily, USCIS has implemented this recommendation. It can take 6-12 months or more between from when a Consulate returns a petition to when USCIS to issue a Notice of Intent to Revoke a returned petition. Previously USCIS didn’t issue receipt notices to acknowledge they had received the returned petitions. Clients were left clueless about the status of their cases.

* USCIS Website Improvements: USCIS has agreed to improve its website’s information related to revocation of petitions, but it appears that the update has not yet been posted.

Ombudsman’s Recommendations Rejected by USCIS

* Uncertain Processing Times: The Ombudsman recommended that USCIS create standard processing times for consideration of revocation of returned petitions, and report current processing times online. USCIS responded that it would not be practical to establish standard processing times because some cases require lengthy fraud investigations, whereas others do not. USCIS’ response is, in my opinion, disappointing. Setting standard processing times are helpful for USCIS service centers to set work priorities and for stakeholders to set reasonable expectations as to how long their cases will take. Moreover, as for other types of cases that USCIS handles, if a fraud investigation is needed, then an exception can be made to the standard processing time.[7] Standard processing times would also, hopefully, reduce the current processing times for consular return cases. Currently, with consular return cases taking a year or more, clients must consider the faster option of filing a new petition. This creates extra work for USCIS, even though USCIS or the Consulate may refuse to act on the new case before USCIS completes decided whether or not to revoke the old petition.

Other Problems with the Consular Return Process

* Readjudication by Consulate: The State Department’s Visa Office has reminded Consulates that they “should not attempt to readjudicate petitions” already decided by USCIS. “Rather, a consular officer should only seek revocation of the petition if the officer knows, or has reason to believe, that the petition approval was obtained through fraud, misrepresentation or other unlawful means, or that the beneficiary is not entitled to the status conferred by the petition. Petitions generally should not be returned unless the post uncovers new information not known to [USCIS] at the time of petition approval.”[8] Despite this reminder, some consular officers seem to return petitions to USCIS when it is not warranted, thereby inconveniencing applicants and creating additional work for USCIS.

* Consular Notice of Intent to Return Petition to USCIS: Currently, a consular officer who decides to return a petition to USCIS needs only to provide notice of this fact to the visa applicant. The officer need not explain the reason why the petition is being returned.[9] Our recommendation is that the officer should provide notice to the visa applicant of the reason why and give the applicant a chance to provide additional evidence that the petition should not be revoked. In some cases, this will be more efficient than waiting a year or more for USCIS to decide whether to revoke the petition.

Conclusion

Despite recent improvements, this legal process remains slower and less transparent than it should be. Counsel should help the visa applicant to be prepared at the time of the consular interview to answer all relevant questions by the consular officer in order to minimize the risk that the officer will return the petition to USCIS with a recommendation for revocation. If there are problems at the interview, it may be wise to contact the Consulate to try to resolve the problems before the petition is returned to USCIS. If the petition is returned, it may be best to both respond to the Notice of Intent to Revoke and consider filing a new petition.


[1] Memo by Jonathan R. Scharfen, USCIS Acting Director, Response to Recommendation #33, Recommendation on the Processing of Petitions That Are Returned by the U.S. Department of State for Revocation/Revalidation (May 23, 2008).

[2] Memo by Prakash Khatri, USCIS Ombudsman, Recommendation on the Processing of Petitions That Are Returned by the U.S. Department of State for Revocation/Revalidation (Aug. 24, 2007).

[3] INA § 205; 8 C.F.R. § 214.2(l)(9).

[4] Consulates return immigrant petitions (including Ks and Vs) to the National Visa Center and nonimmigrant petitions to the Kentucky Consular Center. In either case, petitions are then routed to the appropriate USCIS offices. Forms I-130, Petitions for Alien Relatives, initially filed with an overseas USCIS office are returned directly to that office by the Consulate. Minutes of AILA-DOS Liaison Meeting (Oct. 2007).

[5] Cable, DOS, 01-State-121801 (July 13, 2001).

[6] 8 C.F.R. § 205.2(b); 8 CFR 214.2(l)(9)(iii).

[7] For example, according to USCIS regulations, L-1 petitions should be adjudicated within 30 days. However, where a fraud investigation is needed, USCIS makes an exception to this time limit. 8 C.F.R. § 214.2(l)(7).

[8] Cable, DOS, 01-State-121801 (July 13, 2001).

[9] Minutes of AILA-DOS Liaison Meeting (Oct. 2007).