Jose Andres Monge Calderon, Fragomen’s associate general counsel for Latin America. (Courtesy photo)
Two employees of global immigration firm Fragomen, Del Rey, Bernsen & Loewy’s Costa Rica office—a father and son—stole what may be nearly half a million dollars over the course of four years by forging receipts for fee payments that the firm made on behalf of hundreds of clients seeking residency visas in Costa Rica.
Criminal and government administrative investigations are still underway in Costa Rica, a year and a half after the firm discovered the scheme and fired the father, a messenger and his son, an office worker. The government immigration agency has reassigned two of its own employees who should have noticed the shortfall that the fraud was creating.
Because the immigration agency didn’t notice the shortfall, none of the firm’s immigration cases were affected so the firm didn’t initially detect the fraud, said Jose Andres Monge Calderon, Fragomen’s associate general counsel for Latin America, who is based in Costa Rica. Once the firm understood what had happened, it alerted the immigration agency of the fraud and repaid the missing fees to ensure cases weren’t affected.
The fraud involved checks the firm regularly cut to cover client application fees to the Costa Rican immigration agency, Direccion General de Migracion y Extranjeria. In Costa Rica, in addition to documents, each client case application required three standard fee payments, including two that while paid in Costa Rican currency, are based on U.S. dollar amounts of $200 and $50. All three payments are required in cash at the government’s bank, and the deposit receipts accompany the documents and application at the immigration agency for proof of payment.
While Fragomen’s checks were always getting cashed, they weren’t always getting deposited in the immigration agency’s account. Date and deposit amounts paid were cut from receipts and the pieces were recombined to produce altered receipts for the $50 and $200 deposits. These were then attached to a piece of paper to make it difficult to notice. An employee who scanned the receipts into the computer for client files before forwarding the originals to the immigration agency became suspicious and took the issue to management.
Fragomen launched an internal investigation and audit. Using magnifying glasses on the document scans, the firm found 885 immigration cases from June of 2011 to November of 2015 where the fee deposit receipts had been altered, Monge said, and determined that Fragomen and the public coffers of Costa Rica’s immigration services agency had been defrauded of $218,998. The Costa Rican newspaper Diario Extra recently reported that more than $447,000 in fees had gone unpaid to the immigration agency. Monge said he is not sure where the higher number came from.
Within two weeks of the discovery, Fragomen fired the initially suspended employees, completed its internal investigation, filed a criminal complaint with local authorities, informed the immigration agency of the fraud and voluntarily reimbursed the agency so that the thefts would not be a cost to the public, Monge said.
Monge also said that because the immigration agency would have the originals, it may be able to locate more cases of altered receipts. Fragomen has absorbed the cost of paying the Direccion General de Migracion y Extranjeria the money it was shorted, Monge said, and has committed to paying whatever additional fees the agency finds were not paid on behalf of clients.
The names of the individuals involved in the scheme have not been released, as it is customary to withhold the names of individuals in ongoing investigations, Monge said.