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Letter to Jonathan Scharfen, Acting Director of the U.S. Citizenship and Immigration Services, Re: Fraud in H-1B Program


Location: Washington, DC

Letter to Jonathan Scharfen, Acting Director of the U.S. Citizenship and Immigration Services, Re: Fraud in H-1B Program

Grassley Questions Immigration Agency About Fraud in H-1B Program

Following release of an internal report by Citizenship and Immigration Services outlining serious fraud in the H-1B visa program, Senator Chuck Grassley today sent a letter to the Acting Director of Citizenship and Immigration Services asking for additional details about how the government is enforcing the H-1B visa laws.

"The results of this report validate exactly what I've been fearful of-some employers are bringing H-1B visa holders into our country with complete disregard for the law. More needs to be done to ensure the American worker is our first priority," Grassley said. "The system is obviously broken when an H-1B visa holder is working at a laundromat rather than in high-skilled industries. The fraud and abuse outlined in this report shows that it's time to put some needed reform in place."

Grassley has led the effort to reform the H-1B visa program. He introduced a comprehensive H-1B and L visa reform bill last year with Senator Dick Durbin that would give priority to American workers and crack down on unscrupulous employers who deprive qualified Americans of high-skill jobs. He has also asked questions of both American and foreign based companies about their use of the H-1B visa program.

Grassley said the report should serve as a wake-up call to the agency. He urged them to better detect serious violations by employers who abuse the system.

Here is a copy of the letter Grassley sent to Jonathan Scharfen, the Acting Director of U.S. Citizenship and Immigration Services. Click Here to see a copy of the Citizenship and Immigration Services report.

October 9, 2008

The Honorable Jonathan Scharfen
Acting Director
U.S. Citizenship and Immigration Services
Department of Homeland Security
20 Massachusetts Avenue, NW
Washington, D. C. 20529

Dear Director Scharfen:

As a senior member of the Senate Judiciary Subcommittee on Immigration, Border Security and Refugees, I have taken a keen interest in the H-1B visa program over the years and how it benefits the United States. However, I have found serious problems with this program, including loopholes that are disadvantageous to American workers and U.S. businesses. My concerns are further intensified after reading your agency's Benefit Fraud and Compliance Assessment that points to direct fraud and abuse by a number of employers and petitioners.

Before I begin to discuss the report, I want to express my immense frustration about the length of time it took for USCIS to provide the results to Congress. I first inquired about FDNS doing a benefit fraud assessment just after it finished the religious worker report in August 2005. Since then, I have asked for briefings and updates, only to be put off and told to wait. In response, I asked the appropriations committee to include language in the FY2008 Homeland Security spending bill to provide funding and require the agency to finish the assessment. In April 2008, you responded to me in writing by stating, "I anticipate that I will be able to share the report with you within the next few weeks." The H-1B benefit fraud assessment was completed several months ago, yet the results were apparently hidden from Congress at a time when legislation could have been enacted. The constant delay has been unacceptable, and likely problematic for USCIS adjudicators who may have continued to rubber stamp fraudulent applications for H-1B visas.

The H-1B benefit fraud and compliance assessment highlights the rampant fraud and abuse that is taking place in the program. Experts have acknowledged that many employers disregard the spirit of the law, and find ways to circumvent worker protections to hire cheaper foreign labor. With a violation rate of more than 20%, this assessment should serve as a wake-up call to your agency that the H-1B visa program is not working as it was intended.

It alarms me that USCIS had already approved 217 of the 246 cases in the sample. This means that 19% of the approved cases were associated with fraud or involved employers who broke the law. Only 2% of the sampled cases were denied, which suggest that not enough fraud prevention and detection efforts were incorporated in the adjudication process.

I also find it concerning that FDNS uses the phrase "technical violation" when it relates to employers or alien beneficiaries who failed to comply with the law. When an employer requires its workers to pay for the visa and application fees, or does not pay them the required prevailing wage, it is against the law. This blatant disregard for the law is not a "technical" violation.

While the H-1B benefit fraud and compliance assessment proves that wrongdoing truly does exist, it also brings up many unanswered questions that USCIS must address. Therefore, I would appreciate a response to the following questions:

1. What actions, if any, has USCIS taken since the assessment was completed earlier this Spring?

2. Since the assessment was finalized, has USCIS taken steps to review, evaluate and/or revoke petitions or applications approved, denied, or pending after March 31, 2006 (the date of the sample)?

3. More than 80% of the violations were detected because of site visits. It's evident that false job locations, shell business scams and inconsistent job duties could easily be prevented if more site visits were conducted by USCIS. What efforts will your agency take to increase the number of site visits to increase fraud detection in the program?

4. Given that Congress allows USCIS to collect a $500 fraud prevention and detection fee, please describe how you will use these funds to more effectively root out fraud and abuse in the H-1B visa program.

5. The assessment states that FDNS refers cases of fraud to Immigration and Customs Enforcement for consideration of formal criminal investigation and prosecution. "ICE then has 60 days to accept the case for investigation or decline it and return it to FDNS. If ICE declines to open a criminal investigation, FDNS forwards the case with its administrative findings to a USCIS adjudications component for denial or revocation of the petition or application, as appropriate."

· How many times has FDNS referred a case to ICE for investigation?
· Of those cases referred to ICE, how many, to your agency's knowledge, were investigated? How many were declined by ICE and returned to FDNS?
· Of those cases referred and then investigated by ICE, how many petitions or applications were denied or revoked? How many cases were approved, despite FDNS' findings that fraud was committed or a violation of law occurred?
6. Given that the assessment examined all levels of fraud, including the filing of the labor certification with the Department of Labor, did USCIS inform the Department of Labor as it worked to complete the assessment? What recommendations, if any, has USCIS relayed to the Department of Labor to improve the labor certification process? What response, as far as you know, did the Department of Labor have to the assessment and to your recommendations?

7. What steps does USCIS plan to take to improve communication and coordination with the Department of Labor with regard to the H-1B visa program?

8. Please describe in more detail the abuse by employers to put a beneficiary in a non-productive status (or "on the bench"). What steps has USCIS taken to ensure that visa holders are not imported only to be benched, unpaid, or inactive?

9. The assessment points out which occupational categories are more susceptible to fraud and abuse. Does USCIS plan to train adjudicators and institute detection strategies to more effectively determine when an employer misrepresents, underpays, or forges documents in order to obtain an H-1B visa holder in these (and all) categories?

10. What actions did USCIS take against companies that were found to violate the program? Will the employers (and their employees) be held accountable or referred to the Department of Justice for prosecution? Will the guilty employers be considered for debarment or suspension from being eligible for federal contracts, and will these employers be referred to the General Services Administration so that other agencies can be made aware of their misconduct? Will USCIS deny these employers further participation in the H-1B visa program?

I hope you share my frustration with the results of this benefit fraud and compliance assessment. I strongly urge you to do everything within your authority to make sure that the program is used as Congress intended, and that employers are held accountable for any wrongdoing. Fraud and abuse cannot be tolerated, especially as many legitimate businesses in the United States are willing to play by the rules to bring in needed temporary workers in high-skilled industries.

I look forward to hearing from you as soon as possible so that we can move forward and enact legislation that will reform the H-1B visa program. Changes must be made to put integrity back into our visa programs, and your input will help us tackle that endeavor.


Charles E. Grassley
United States Senator

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