State/OIG: Organized Fraud Rings “Have Taken Control” of the Green Card Lottery Program in Ukraine

– By Domani Spero

— and the Bureau of Consular Affairs needs a program “to address widespread diversity visa fraud!” If about 80% of the cases are questionable and that’s just from the western part of the country, we can’t imagine any kind of program short of shutting it down can cut the fraudsters out, can you?

One of the lengthier section of the State/OIG inspection report on US Embassy Ukraine pertains to the Diversity Visa program aka: the “green card visa lottery” program handled by Embassy Kyiv. Apparently, organized fraud rings “have taken control” of the diversity visa program in the country.  State/OIG made a recommendation that the “Bureau of Consular Affairs should implement a program to address widespread diversity visa fraud in Ukraine.” That seems lame — a program to correct another program?

As well, just as Embassy Kyiv started handling diversity visas in 2012, its FSO-03 fraud prevention manager position was downgraded to entry-level.  We would not be shocked if this position is also a 6-12 month rotational position, as is often the case with entry level positions.  The State Department’s own Crime and Safety Report in 20112012 and 2013 repeatedly noted that the U.S. Federal Bureau of Investigation (FBI) considers Ukraine a hotbed of cyber crime activity. And that “in recent years, U.S. law enforcement (the FBI, the U.S. Secret Service, and the Department of Homeland Security) pursued a number of important joint cyber crime/identify theft investigations with Ukrainian law enforcement authorities.”

And still, Embassy Kyiv got an entry level fraud prevention (FPU) manager supervising seven locally employed staff working with an Assistant Regional Security Officer for Investigations (RSO-I) to assist.  A nine-person fraud unit versus organized fraud rings operating in a country of 46 million. That must seem like a tsunami despite the dedicated efforts by the FPU staff to combat fraud. Prior to the downgrading of the FPU manager position and the use of the RSO-I  at the US Embassy in Kyiv,   the Government Accountability Office released a report on the State Department’s visa fraud prevention.  Take a look at Table 2 below from the GAO report and see if that 1:959 ratio of FPU staff to cases at US Embassy Ukraine doesn’t blow your mind.  This is our first line of defense, folks; and this does not make us sleep well at night.

Screen Shot 2013-10-26

Screen grab from GAO 12-888 report

Excerpt from the OIG report:

In March 2012, Embassy Kyiv began processing Ukrainian diversity visas previously handled by Embassy Warsaw. The program allows citizens of eligible countries to enter a lottery for a chance to apply for a U.S. immigrant visa. The consular section has scheduled approximately 2,000 diversity visas for interviews in 2013. Painstaking work by the fraud prevention unit and the assistant regional security officer for investigations has produced a detailed portrait of a pervasive and sophisticated fraud scheme affecting the Diversity Visa program in Ukraine.

Organized fraud rings masquerading as travel agencies have taken control of the Diversity Visa program in Ukraine. They buy, steal, or obtain from public sources personal information about Ukrainian citizens, especially those living in western Ukraine. They use this information to enter these citizens’ names in the online Diversity Visa program Web site, often without their permission or awareness. In addition, other Ukrainian citizens willingly provide personal information to the fraud rings for entry into the program but are usually unaware that the fraudulent “agencies” continue to enter them year after year.

Department practice is to provide applicants with a confirmation number once they complete the diversity visa entry form online on the Department-run electronic diversity visa Web site. The instructions state that the applicant should use this number to check on the status of the entry, typically after May 1 of the program year. In Ukraine, since the fraud ring makes the entry into the online system, only the fraud ring has the confirmation number and can check to see if the entry was selected to participate in the Diversity Visa program. The fraud ring then contacts hundreds of Ukrainian selectees and requires them to sign a contract promising to pay up to $15,000 to obtain the confirmation number and to pursue an immigrant visa application. If the selectee is interested but cannot pay, the fraud ring may insist that he or she enter into a sham marriage with a person who has expressed interest in immigrating to the United States. In such a case, the “spouse” pays the agency a substantial amount of money to be paired with a diversity visa selectee.

A fraud ring may also require legitimately married diversity visa winners to obtain divorce certificates, engage in a sham marriages, and leave minor children behind in order to emigrate to the United States. Eventually, the diversity visa winners may petition for the real spouse and children to join them. Kyiv’s immigrant visa unit sees many similar cases, indicating that this practice has been occurring for years. The fraud ring enters the names of a significant percentage of the population of western Ukraine (Embassy Kyiv estimates as much as 80 percent), effectively preventing interested individuals from filing their own applications, since the Diversity Visa program prohibits duplicate entries, a function partially performed by the Department’s computer system that can automatically search for and delete duplicate applications.

The fraud ring’s involvement continues after the selectee enters the United States. The fraud ring applies for the selectee’s social security card and retains both the card and the social security number for misuse. Selectees are required to sign a contract (legally binding in Ukraine) with the fraud ring, stipulating a continuing obligation to pay the fraud ring or to work essentially as an indentured servant to repay what is “owed.” Failure to pay has led to threats against family members in Ukraine.

The consular section, in coordination with the Bureau of Consular Affairs, has taken a number of steps to combat this fraud. The embassy’s fraud prevention unit investigates all diversity visa cases. The assistant regional security officer for investigations keeps a file of Internet protocol addresses associated with fraud rings, but the organizations continually change their Internet protocol addresses to foil these efforts. In order to provide less time for fraud rings to arrange sham marriages, the consular section no longer allows applicants for diversity visas to reschedule the appointment set for them by the Kentucky Consular Center.

Interviews of diversity visa applicants are detailed and lengthy and follow a frequently-varied script, in an effort to stay one step ahead of the fraud rings’ careful coaching of the applicants. Despite these efforts, which have had a significant deleterious effect on the efficiency of the section, fraud continues. The Diversity Visa program is reviewed yearly by the Bureau of Consular Affairs resulting in a number of changes to the program in an attempt to deter fraud.

Fraud rings have exploited the automated process used to notify applicants that they have been selected for the Diversity Visa program in the Ukraine. One possible solution would be for the Department to send confirmation numbers only to the consular section in Kyiv for Ukrainian selectees, with the consular section then notifying those selected for the program. This process would add work for the consular section but less than is now required to combat fraud. The consular section estimates that between 50 and 80 percent of applicants do not have their correct address listed on their application (because of the fraud rings’ actions), but the section can use existing online resources in Ukraine to locate and notify selectees.

Even if the Consular Section can use existing online resources to locate and notify selectees, that downplays the reality that majority of the program registrants in the country are tainted by fraud.  Or that many have provided their personal information to these fraud rings in the first place.

Shouldn’t the State Department be allowed to suspend the lottery program in any country if the level of fraud is deemed to be at a certain level?  All regs are odd in their own way; can’t say if suspension is allowed in the regs, but ought not the State Department request this authority from Congress when fraud is this massive?  Even if only 20% of all 2,000 diversity visas at post are tainted by fraud, that’s 400 cases too many.

Dear Congress, what do you think?

The Diversity Immigrant Visa Program makes 50,000 diversity visas available annually, drawn from random selection among entries of individuals who are from countries with low rates of immigration to the United States.  Before you get upset that the State Department is giving away visas, please note that this is a congressionally mandated program. Section 203(c) of the Immigration and Nationality Act (INA) provides for a class of immigrants known as “diversity immigrants,” from countries with historically low rates of immigration to the United States. For fiscal year 2015, 50,000 diversity visas (DVs) will be available.

Actually, according to DHS, the “United States Citizenship and Immigration Services (USCIS) determines the regional DV limits for each year according to a formula specified in Section 203(c) of the INA. USCIS will announce these numbers once these calculations are completed. The number of visas that will eventually be issued to natives of each country will depend on the regional limits established, how many entrants come from each country, and how many of the selected entrants are found eligible for the visa.  No more than seven percent of the total visas available can go to natives of any one country.”

So there, does that make you feel good?  The list here shows the countries whose natives are eligible for DV-2015, grouped by geographic region. Online registration will conclude on Saturday, November 2, 2013 at 12:00 noon, Eastern Daylight Time (EDT) (GMT-4).

This latest report on widespread fraud in one country alone can potentially add fuel to the repeal of the diversity visa program.  Section 2303 of S.744  which passed the Senate in June this year does just that.  The Senate bill which passed with 68 – 32 votes was sponsored by Sen Schumer, Charles E. [NY] and co-sponsored by the likes of Sen Durbin, Richard [IL], Sen Menendez, Robert [NJ] and Sen Graham, Lindsey [SC] and Sen McCain, John [AZ].  If the House agrees, and it becomes law, this will take effect on October 1, 2014 and no alien may be allocated such a diversity immigrant visa for a fiscal year after fiscal year 2015.

To read more, see CRS: Diversity Immigrant Visa Lottery Issues (2011) via fas.org. See the State/OIG  Memorandum Report: Review of the FY2012 Diversity Visa Program Selection process, ISP-I-12-01 after the FY2012 lottery errors. To read the 2012 GAO report, click State Could Enhance Visa Fraud Prevention by Strategically Using Resources and Training.

* * *

Advertisements

US Embassy Ukraine Gets High Marks and Yay! State/OIG Now Discloses Names of Inspectors

— By Domani Spero

Back in September, we blog-hoped that the arrival of the new Senate-confirmed Inspector General at the State Department would also bring some changes on how the office does its business.  One of the items in our wish list has to do with the redaction of the inspectors’ names from the publicly available reports.

We are pleased to note that the first embassy inspection report released publicly since new OIG Steve Linick took office no longer redacts the names of the inspectors.  State/OIG spokesman Douglas Welty confirmed that this is, in fact, a decision made by Mr. Linick.

So to State/OIG leaning on the side of disclosure —

bravissimo!

If you want to know why we have been bugging about this subject forever, read our post here.  Now about the OIG report on US Embassy Ukraine:

Brief background: The US Embassy in Kyiv is the largest embassy in eastern Europe, after Moscow. It has 672 employees, including 165 U.S. direct hires, representing nine U.S. Government agencies. In 2012, all elements of the mission, with the exception of Peace Corps and the Office of Defense Cooperation, moved into a new embassy compound. The mission operating budget in FY 2012 was $160.6 million.

According to the IG report, this inspection took place in Washington, DC, between March 25 and April 12, 2013, and in Kyiv, Ukraine, between April 13 and May 7, 2013. Here are the names of the inspectors:  Ambassador Robert M. Beecroft (team leader), Lavon Sajona (deputy team leader), Richard Behrend, David Davison, Dolores Hylander, Patricia Murphy, Shawn O’Reilly, Donna Roginski, Paul Smith, Alexandra Vega, and Tim Wildy.

Screen Shot 2013-10-26

At the time of the inspection, the embassy was headed by Ambassador John Tefft and DCM Eric Schultz. Ambassador Tefft had since left and was succeeded by Ambassador Geoffrey Pyatt who was confirmed the new ambassador to the Ukraine in June this year.

The following are the report’s key judgments:

  • Embassy Kyiv has been processing Ukrainian diversity visas since March 2012. Indications of widespread fraud have emerged. The program requires urgent attention and corrective action from Washington.(see separate post)
  • The Bureau of Overseas Buildings Operations and Embassy Kyiv are considering reconverting the former Marine House into a new residence for the deputy chief of mission. The project will cost approximately $2.5 million, not counting the cost of reconversion of the current deputy chief of mission residence to separate quarters for several other families. A cost-benefit analysis is urgently needed to determine whether the former Marine House should be converted into multiple apartment units instead, a move that could yield cost savings of $200,000 to $300,000 annually.
  • Eighty percent of Embassy Kyiv’s grant recipients live outside the capital, making oversight difficult. A travel cap imposed by the Department of State in December 2012 does not include grants monitoring in the list of mission-essential travel. The guidelines defining travel to monitor grantee performance should be redefined as mission essential, and thus exempt from the travel cap.
  • The OIG team identified two innovative practices. First, Embassy Kyiv sponsored a contest among university students to promote intellectual property protection. Second, Embassy Kyiv management officers realized that newly-hired local staff members receive an orientation briefing but no further briefings as their careers progress. To address this gap, Embassy Kyiv conducts a regular weekly program designed to inform locally employed staff about policy changes

From the looks of it, the embassy appears well-functioning (with one program exception).  The inspectors have good things to say about Ambassador Tefft and his deputy, as well as the entire mission:

  • Under the leadership of a widely admired Ambassador, Embassy Kyiv has benefited from 4 years of clear policy objectives, effective diplomacy, active public outreach, and skilled management. The country team operates with transparency, confidence, and mutual respect. The recent move into a new embassy compound has reinforced teamwork and operational coordination.
  • The Ambassador is vigorous and articulate in his advocacy of U.S. policies and defense of U.S. interests. Embassy operations run smoothly, with a high level of policy and operational unity. The inspectors noted high morale across all agencies and sections. The deputy chief of mission’s (DCM) businesslike, no-nonsense approach effectively complements the Ambassador’s more informal style.
  • Morale among the American staff in Kyiv is good. The new embassy, and the colocation of personnel from six buildings around the city, enhances camaraderie. The post language program, the embassy employee association, schools, and the embassy dining area and snack bar scored high on the OIG quality of life questionnaires. The medical unit and the community liaison office received average scores.
Potential changes to come:

Local Staff Overtime: Excessive

The LE staff worked more than 23,000 hours of overtime between April 2012 and March 2013. ICASS overtime alone accounted for over 15,000 hours, or $162,000. The inspectors consider this amount excessive.

Tour of Duty: Moving Kyiv to a 3-year tour?

Department employees serving in Kyiv are assigned for a 2-year tour. Embassy Kyiv is a 20 percent hardship differential post. The Department and the embassy would be better served by 3-year assignments. Seven embassies with 20 percent hardship differential have 3-year tours, including Manila, New Delhi, Accra, Dakar, and Santo Domingo. The IG report points out that “cost savings would accrue to the Department if Embassy Kyiv moved to a 3-year tour.”  While it did not directly recommend recommend the move to a 3-year tour, it recommends that the embassy with DGHR and State/EUR “evaluate whether to assign Department of State employees to 3-year tours in Kyiv.”

American Spaces Network – the largest in the world is coming!

The Space represents a key public diplomacy platform in U.S. efforts to reach the more than 90 percent of Ukrainians who live outside the capital city. When PAS establishes its 30th American Space later this year in Zaporizhzhya, it will have the largest American Space network in the world.In FY 2012, PAS committed more than $286,000 to its Space operations. Its FY 2013 funding increased to nearly $500,000.

More nails and hammers!

There is a funded $3.4 million OBO project to convert the decommissioned old consular building into an American Center. There is also a $2.3 million OBO project to convert the former Marine House into a DCM residence. And there is the potential conversion of the current DCM residence into separate multiple apartment units for mission staffers. Construction has not started on the first two projects with estimated completion in  2014.

The report includes 19 recommendations, and  21 informal recommendations.  Ambassador Tefft,who had been appointed ambassador three times recently retired from the Foreign Service. In September this year, he  was awarded the 2012 Diplomacy in Human Rights Award for “For his sustained and effective leadership of the U.S. embassy in Kyiv in providing well-coordinated inter-agency support for the aspirations of the Ukrainian people to enjoy strengthened democratic institutions and practices, the fair administration of justice, and respect for the fundamental freedoms set forth in the Universal Declaration of Human Rights.”

We will have a separate post on the massive fraud on the “green card” lottery program in the Ukraine to follow.

xxx