January 2012 marked the one-year anniversary of President Barack Obama’s Startup America Initiative, designed to further stimulate economic recovery by, inter alia, encouraging foreign investment and tourism and attracting highly skilled foreign nationals to remain in the U.S. work force.1 Against this administrative agenda is the political backdrop of vocal congressional naysayers, who, for the third congressional session (going back to the presidency of George W. Bush), have failed to pass comprehensive immigration reform and continue to promote a regulatory climate that is antagonistic to foreign-born professionals and corporations. In particular, without any hard data, despite a number of programmatic reviews that began in 2000, Senator Charles Grassley and others continue to charge that the system by which immigration benefits are adjudicated is overwrought with fraudulent filings that present an imminent threat to our national security and to U.S. workers.

The call for stricter scrutiny of and tougher adjudication standards for employment-based visa petitions has practically paralyzed the allocation of work visas through the L-1 and H-1B visa programs, for example, as well as business visitor visas. This has, in turn, impeded the entry of foreign nationals who hold skills that are essential to our economy and it has deterred foreign investment in the United States. This article will review a number of reports produced by the Government Accountability Office (GAO), the Office of Inspector General (OIG), and the Fraud Detection and National Security division (FDNS) of the Department of Homeland Security (DHS) over the past decade, which have investigated immigration benefits fraud.

Benefits Fraud Investigations

In the immigration world of pre-9/11 (1999), the Immigration and Naturalization Service (INS) announced its “Interior Enforcement Strategy,” listing five priorities. Fourth among them was reducing immigration benefits fraud, and document fraud. Immigration benefits fraud is defined as “the willful misrepresentation [or omission] of a material fact to qualify for a status or benefit under immigration law in the absence of lawful eligibility for that benefit.”2 In January 2002, GAO reported, “INS does not know the extent of the immigration benefit fraud problem. However, reports and INS officials indicate that the problem is pervasive and significant and will increase.”3

Following closely behind 9/11, GAO urged that INS establish clear protocols by which to better coordinate fraud investigations. Citing a September 2000 review of the H-1B visa program, the first INS study of fraud in a major benefits program, the GAO report iterated a concern that has since been reiterated in nearly every report that has assessed the benefits adjudications process: “the goal of providing immigration benefits in a timely manner…conflict[s] with the goal of preserving the integrity of the legal immigration system.” This was 10 years ago.

The GAO report noted that “some” H-1B adjudicators felt their performance review metrics emphasized numeric quotas over quality, such that fraud investigations were not only avoided but discouraged by supervisors. Without offering specific data, GAO noted that follow-up investigations on approved petitions found examples of fraud. The report admitted that estimates of fraud were not based on scientific studies, yet GAO still recommended that INS implement performance measures that better balance anti-fraud activity (quality) against production (quantity). GAO also urged that INS develop new tools for identifying and communicating fraud across its operations, including integrated computer databases with validated fraud indicators for data mining purposes.

Following the 2003 reorganization of INS into DHS, U.S. Citizenship and Immigration Services (USCIS), the DHS component responsible for adjudications, established FDNS in 2004, deployed thousands of FDNS officers to the field in January 2005,4 and developed the Benefit Fraud and Compliance Assessment Program in February 2005. USCIS’s objective was to establish integrity reviews that captured all applications with articulable fraud indicators and refer them to U.S. Immigration and Customs Enforcement (ICE) for review.5 These indicators included “demeanor, contradictory statements on material facts, atypical or boilerplate applications.”6

In April 2008, OIG analyzed data from fiscal years 2004, 2006, and 2007 to determine the effectiveness of this referral policy, and found USCIS was referring less than 1 percent of the six million applications it typically receives each year to ICE. The data for FY2006 showed fraud in less than 1 percent of decisions overall, and less than 3 percent of all denials (27,377). Also, ICE referred only about one-third of the referrals it received to a local office for further investigation. Rather than acknowledge that fraud concerns might be overstated, OIG doubted whether adjudications officers (ISOs) were properly following the referral policy. Echoing the earlier GAO report, OIG concluded that production pressures interfered with USCIS’s ability to detect fraud, and it suggested that USCIS revise performance metrics to better track fraud referral rates, noting the deterrent effect that fraud investigations and denials could have in reducing ISO caseloads. This was four years ago.

In September 2008, FDNS issued a report following 246 randomly targeted, unannounced site visits of the 96,827 H-1B petitions filed between October 2005 and March 2006, during which it confirmed fraud and/or technical violations in 51 cases.7 Although FDNS reported an overall violation rate of 20.7 percent, the actual numbers showed fraud in only 33 (13.4 percent) cases. A close analysis of the data identified a discreet group of employers as the primary violators, yet FDNS has continued its Administrative Site Visit Verification Program (ASVVP) through random selection of H-1B filings. Of 14,433 site visits in FY2010, FDNS again verified 86 percent of approved H-1B petitions.8 Only 495 (3.4 percent) petitions faced ultimate revocation, and FDNS continues to report a negligible 1 percent referral rate of potential fraud leads.

Despite the clear lack of data showing pervasive fraud, in 2011, Senator Grassley again called on OIG to conduct another assessment of how production pressure may be responsible for the lack of fraud reported.9 OIG released its report in January 2012, after interviewing only 147 of more than 18,000 USCIS adjudicators and reviewing a mere 256 online surveys. Without a sound statistical base, OIG concluded the ability of ISOs to focus on USCIS’s strategic goals of national security and fraud identification continues to be hampered by production pressures. With 24.6 percent of survey respondents identified as ISOs with less than three years of experience, it is unsurprising that 24.8 percent of respondents noted direct supervisory involvement in their decision-making.

Acknowledging that not a single survey respondent reported pressure to approve a case where fraud was suspected or national security a concern, OIG suggested that supervisors encouraged approvals to ensure faster case completions and continued to apply performance metrics that emphasized quantity over quality. OIG seized upon a single example of intervention by a former USCIS chief counsel on behalf of a private attorney to recommend that USCIS limit supervisory review and discontinue direct interaction with the private bar beyond the formal appeals process. USCIS objected to this recommendation.

OIG also acknowledged that FY2011 marked a revision to USCIS’s performance metrics, where 50 percent of ISO ratings are now based on “quality and national security” and production is a noncritical factor. Although OIG did not specify what act(s) would lead to a favorable quality rating, it later noted that ISOs may, as an alternative to approving a case, request additional evidence, issue a Notice of Intent to Deny, write a fraud referral, or simply deny the application. Also, despite a majority (53.6 percent) of survey respondents noting the new performance metrics were applied appropriately or that any deviation had not adversely impacted their fraud detection efforts, OIG reported a consensus among ISOs that case completion remained as or more important than program integrity. It cautioned that the relatively quick act of approving cases may lead ISOs to approve “marginal” cases to maintain their caseloads, which presented a “threat to the integrity of the benefit issuance system.”

With conclusions that are contradicted by even its own limited data, OIG’s concerns appear as exaggerated extrapolations from “anecdotal statements” of “an unrepresentative sample of [volunteers],” as USCIS noted in its response. Ironically, OIG justified its flawed methodologies by reference to its own production pressures (time and money). A more thoughtful report compiled by the National Foundation for American Policy (NFAP) from Citizenship and Immigration Services Centralized Operational Repository (CISCOR) data, belies the OIG findings. It notes substantial increases between FY2007 and FY2011 in the issuance of requests for evidence (RFEs) and denial rates among ISOs across multiple work visa programs, including the H-1B, L-1, O-1 programs.10

In FY2011, NFAP reports, 63 percent of L-1B petitions and 26 percent of H-1B petitions resulted in RFEs. Nevertheless, OIG suggested its flawed study supports raising the standard of proof in benefit adjudications from “a preponderance of the evidence” to “clear and convincing evidence.” OIG posited that the higher standard would require that ISOs more carefully review the evidence and casually dismissed the potential burden on employers by noting the higher standard is already required for the conferral of certain benefits.

The OIG report has led to congressional hearings on “Safeguarding the Integrity of the Immigration Benefits Adjudication Process.”11 At the hearings, held Feb. 15, 2012, acting DHS Inspector General Charles K. Edwards, who authored the report, admitted that “no conspicuous fraud was found” during OIG’s review. Representative Zoe Lofgren (D-Calif.), ranking member of the subcommittee that held the hearings, alluded to the flaws highlighted above and characterized the report as “amateurish.” Mark Whetstone, president of the USCIS officers’ union, forcefully argued there is “no culture of getting to yes” in the agency and stated his conviction that informal contact from the immigration bar does not “get denials turned into approvals,” though it may lead to further review of a case. Mr. Whetstone did state his ongoing concern as to production pressures, and urged USCIS to apply quality-based productivity metrics appropriately.

USCIS Director Alejandro Mayorkas also testified in defense of USCIS that the OIG report was “based on limited testimonial information and not empirical data.” Nevertheless, he confirmed he has been working toward establishing a “culture of quality,” to address the organizational tension between quality and speed, “whether real or perceived.” To this end, he noted that he previously elevated FDNS to the directorate level and increased staffing. Moreover, Mr. Mayorkas highlighted the expansion of ASVVP, which has led to more than 17,000 site visits in FY2011. He also lauded the launch of USCIS’s Validation Instrument for Business Enterprises (VIBE), which uses commercially available data to verify information provided by an organization about its operations, and the roll-out of various secure documents that evidence lawful status and work authorization in the United States. Finally, he pointed to ongoing coordination, both internally and externally, through collaborative training programs and assignment rotations, and the improved integration of various national security databases.

Stakeholders have also suggested a cultural shift in the way USCIS approached its adjudications with a Trusted Employer Program, whereby employers with a clear history of compliance could petition for immigration benefits through a streamlined process. This would alleviate time pressures on ISOs, whose record numbers of RFEs waste limited USCIS resources and often cause unnecessary and dilatory burdens on employers. A Trusted Employer Program could also avoid the absurd progeny of VIBE, which includes a bevy of RFEs asking subsidiaries of large, multinational corporations, or campuses of state university systems, to prove their existence through the submission of recent bank statements and complete copies of their federal tax returns, with all schedules.

Conclusion

Reasonable measures are necessary to combat fraud in any benefits adjudication process. As shown above, however, there is a lack of any concrete evidence of a systemic failure in the current immigration benefits adjudications process to detect and deter fraud, despite multiple initiatives to produce same. USCIS should avoid the economically deleterious recommendations of the OIG in favor of a more considered view that continues to improve and apply the tools at hand to ensure that (1) immigration benefits are timely conferred, and (2) actual fraud is appropriately identified and that perpetrators are prosecuted or otherwise held accountable.

It is our considered view that USCIS should work in concert with employers to accomplish these ends, rather than continue to implement a haphazard response that penalizes all for the actions of few. Congress must share the responsibility of promoting employment opportunities through reasoned immigration reform, rather than a blanket vilification of employers who seek to attract and retain foreign talent.

Michael D. Patrick is a partner at Fragomen, Del Rey, Bernsen & Loewy. Adam Ketcher, an associate at the firm, and Nancy H. Morowitz, counsel, assisted with the preparation of this article.

Endnotes:

1. Available at http://www.whitehouse.gov/economy/business/startup-america. See also DHS Reforms to Attract and Retain Highly Skilled Immigrants, available at http://www.dhs.gov/ynews/fact-sheets/20120131-dhs-retain-highly-skilled-immigrants.shtm (Jan. 31, 2012); http://www.whitehouse.gov/the-press-office/2012/01/31/one-year-anniversary-startup-america-initiative-president-obama-sends-st.

2. CRS Report for Congress: Immigration Fraud: Policies, Investigations, and Issues, Order Code RL34007 (April 3, 2008); document fraud is defined separately at 8 C.F.R. §270.

3. U.S. General Accounting Office, Report to Congressional Requesters, Immigration Benefit Fraud: Focused Approach Is Needed to Address Problems, GAO-02-66 (Jan. 2002).

4. Supra note 3.

5. USCIS, H-1B Benefit Fraud & Compliance Assessment (Sept. 2008).

6. DHS OIG, Review of the USCIS Benefit Fraud Referral Process, OIG-08-09 (April 2008).

7. Supra note 7. Technical violations included salaries below the required wage, working in locations outside of a valid Labor Condition Application (LCA), charging H-1B fees to the beneficiary, or placing a beneficiary in non-productive status.

8. American Immigration Lawyers Association (AILA) Minutes from Liaison Meeting with FDNS on June 7, 2011, available at AILA Infonet (www.aila.org) Doc# 11080569 (posted Aug. 5, 2011).

9. DHS OIG, The Effects of USCIS Adjudication Procedures and Policies on Fraud Detection by Immigration Services Officers, OIG-12-24 (Jan. 2012).

10. Available at http://www.nfap.com/pdf/NFAP_Policy_Brief.USCIS_and_Denial_Rates_of_L1_and_H 1B_Petitions.February2012.pdf.

11. Available at http://judiciary.house.gov/hearings/Hearings 2012/hear_02152012_2.html.