Indictments For Alleged Large-Scale Visa Fraud Employment Scheme

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On April 20, USDOJ announced the indictment of two businesses and nine of their officers and managers for an alleged large-scale visa fraud employment scheme. Excerpt from the announcement:

An indictment returned by a federal grand jury in the Southern District of Georgia has been unsealed charging two businesses and nine of their officers and managers located across the country for their roles in an alleged conspiracy to defraud the U.S. government and commit various fraud and criminal immigration offenses for profit.

According to court documents, Regal Hospitality Solutions, LLC; Educational World, Inc.; Karen Makaryan, 42, Sargis Makaryan, 42, and Samvel Nikoghosyan, 40, of Destrehan, La.; Artur Grigoryan, 38, of Biloxi, Miss.; Armen Ayrapetyan, 37, of Duluth, Ga.; Jason Hill, 28, of Virginia Beach, Va.; Fremie Balbastro, 49, of Myrtle Beach, S.C.; and Larisa Khariton, 73, and Jon Clark, 71, of North Port, Fla., were charged in a 36-count indictment returned by a federal grand jury on April 8. Each defendant was charged with one count of conspiracy to defraud and commit offenses against the United States, including encouraging and inducing an alien to reside in the United States, alien harboring, transporting aliens, and visa fraud.  Each defendant also was charged with substantive counts of encouraging and inducing an alien to reside in the United States, alien harboring, and transportation of aliens. In addition, Regal Hospitality Solutions, LLC; Karen Makaryan; Sargis Makaryan; Samvel Nikoghosyan; Artur Grigoryan; Armen Ayrapetyan; Fremie Balbastro; and Jason Hill were also charged with one count of conspiracy to commit wire fraud and 10 counts of wire fraud.

“The defendants in this case allegedly engaged in an expansive conspiracy to enrich themselves by exploiting both the immigration system and noncitizen workers,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “Systemic fraud and abuse of U.S. visa programs and processes designed to protect American workers and businesses will not be tolerated, and offenders will be held accountable.”
[…]
“The Department’s Bureau of Educational and Cultural Affairs aims to increase mutual understanding between the people of the United States and the people of other countries by means of educational and cultural exchange,” said Acting Assistant Inspector General for Investigations Robert Smolich of the U.S. Department of State, Office of Inspector General, Office of Investigations. “When bad actors corrupt these programs for personal gain, it not only diminishes an important tool of diplomacy, it harms the thousands of individuals who participate in these programs hoping to gain skills and experience to make a better life. Today we took a step forward in restoring integrity back to those programs.”

“These defendants’ alleged scheme to game the immigration system and defraud the government has backfired and they will now be held accountable,” said Special Agent in Charge Katrina W. Berger of Homeland Security Investigations (HSI), Georgia and Alabama. “Schemes like this not only exploit the noncitizen workers involved, they also damage the other legitimate businesses in the community. Protecting the integrity of the visa program and immigration system is vital to the security of our nation.”
[…]
Individual defendants have made their initial court appearances and the arraignment of all defendants will be scheduled before U.S. Magistrate Judge Benjamin W. Cheesbro of the U.S. District Court for the Southern District of Georgia. If convicted, the individual defendants face maximum potential statutory penalties of five years in prison on the count of conspiracy to defraud and commit offenses against the United States; 10 years in prison on the counts of encouraging and inducing an alien to reside in the United States, alien harboring, and transportation of aliens; and 20 years in prison on the counts of wire fraud conspiracy and substantive wire fraud. The organizational defendants are subject to a maximum fine on each count of conviction of $500,000 or twice the gross amount of gain or loss resulting from the offense. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The U.S. Department of State Office of Inspector General is investigating the case with assistance provided by HSI and U.S. Citizenship and Immigration Services.

Trial Attorneys Frank Rangoussis and John-Alex Romano of the Criminal Division’s Human Rights and Special Prosecutions Section and Assistant U.S. Attorney Alejandro V. Pascual IV of the Southern District of Georgia are prosecuting the case.

An indictment is merely an allegation and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.

Read the full announcement here.

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Lee Satterfield to be Assistant Secretary for the Bureau of Educational and Cultural Affairs

The life of a blog has no certainty. In most cases, a blog has a lifespan better than that of a mayfly. A day. But most blogs do not make it longer than winter bees (six months). We have to-date survived through 26 winter bee seasons! So that’s amazing! Whatever is in the horizon, we are thankful to all of you who made these seasons possible. We are on the last few days of our eight-week annual fundraising. We are grateful to over 400 readers who pitched in since we launched a few weeks ago. If you care what we do here, and you are able to help, please see GFM: https://gofund.me/32671a27 We could use your support.  ❤️❤️❤️ D!

 

 

On April 27, President Biden announced his intent to nominate Lee Satterfield to be the next Assistant Secretary for the Bureau of Educational and Cultural Affairs (State/ECA) The WH release the following brief bio:

Lee Satterfield, Nominee for Assistant Secretary for the Bureau of Educational and Cultural Affairs, Department of State

Lee Satterfield is President and Chief Operating Officer at Meridian International Center, a non-profit center for diplomacy that strengthens engagement between the United States and the world.  At Meridian she directs daily operations and spearheads major strategic initiatives, including the launch of the Center for Diplomatic Engagement, the Center for Global Leadership, an organization-wide Diversity, Equity, and Inclusion Taskforce and the expansion of cultural diplomacy programs.  She previously served in the Obama Administration as Acting Assistant Secretary of State and Deputy Assistant Secretary of State in the Bureau of Educational and Cultural Affairs.  Prior to that, Satterfield was Deputy Chief of Protocol of the United States.  In the Clinton Administration, Satterfield held several senior positions including Chief of Staff to Secretary Alexis Herman at the Labor Department, Special Assistant to the President and Staff Director for The White House Office of Public Liaison.  In addition to her government experience, she has worked in the private sector as a consultant.  A native South Carolinian, Satterfield graduated from the University of South Carolina with a Bachelor of Arts in Journalism.

According to history.state.gov, the Department of State established a Bureau of International Cultural Relations on Jun 1, 1959, and subsequently renamed it the Bureau of Education and Cultural Affairs on Apr 17, 1960. In 1978 the Bureau was abolished and its functions transferred to the International Communications Agency (subsequently the U.S. Information Agency) under Reorganization Plan No. 2 (91 Stat. 1637). On October 1, 1999, with the integration of the U.S. Information Agency into the Department of State this position was revived.
In over 60 years, only one career diplomat was appointed to this position, Lucius Durham Battle  who served from 1962–1964. Previous appointees to this position include:

 

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FSO Morgan O’Brien Launches DiploSport Podcast on Sports Diplomacy

Posted: 1:03 am ET
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If you’re taking a road trip, and are looking for something to listen to in the car, check out the DiploSport Podcast. FSO Morgan O’Brien spent the past year studying sports diplomacy as part of a fellowship sponsored by the Council of Foreign Relations and the NBA. For his research, he interviewed journalists, policy makers and athletes to discuss the interplay of sports and government.

The first episode features former Secretary of State Condoleezza Rice as his inaugural guest (full transcript here). Others featured in the podcast include Norwegian speedskating legend and Olympic champion, Dr. Johann Olav Koss, founder of Right to Play (bit.ly/JOKossRtP) an organization which uses sport to connect with youth around the globe who face some of the most challenging circumstances imaginable; 3x American skeleton Olympian Katie Uhlaender who is preparing for the next Winter Games in Pyeongchang 2018; Ruth Riley who served as a State Department Sports Envoy, and an NBA Cares Ambassador; and two-time Olympic medalist Michelle Kwan who also did a stint as a State Department Sports Envoy. He told us that he started interviewing earlier this year and have about 20 podcasts in the can.

The podcast host is a Public Diplomacy officer who joined the Foreign Service in 2009 (146th A-100). He was  Ambassador Holbrooke’s assistant for his first tour, and he did a consular tour in Brazzaville.  When he came back to the State Department, he worked at the Sports Diplomacy Division of the Bureau of Educational and Cultural Affairs (ECA). For the past 12 months, he was attached to the National Basketball Association’s International Operations team and had the opportunity to study sports diplomacy.  He is currently in language training in preparation for his next assignment to an East Asia post. We asked him a few questions about this project:

Q: How were you able to get a fun fellowship like this?

MO: This past year, I was on the International Affairs Fellowship through the Council on Foreign Relations, so this wasn’t a formalized “sports diplomacy/NBA Fellowship,” per se. I first pitched the idea to the NBA, with whom I had worked the previous two years when I was in ECA. When they agreed to the concept, I put together a written proposal for the CFR, which was then followed by a panel interview before ultimately being accepted. Since I applied, two things I think have changed: one of the stipulations was that applicants needed to be under 35, I think that’s no longer the case; and I think there is an extra level of State vetting now. Whereas I sent my proposal directly to the CFR, I think this year’s applicants need to be approved by HR before submitting to the CFR.

If one gets creative in canvassing the bid list, they’ll find that the Department can be fantastic about enabling/empowering officers to pursue opportunities outside State, including awesome fellowships (the Una Chapman Cox Fellowship is another incredible, self-paced opportunity). And while I don’t know how it was done, there are officers actually working on international affairs for a few mayor’s offices in a handful of major cities in the US.

Q: What was it like working with the NBA team?

MO: I was a fully-integrated member of the NBA team for the year, fulfilling a childhood dream of working in pro sports. I supported the All Star Game (held in Toronto) and the “Basketball Without Borders” elite youth camps held around the world this past summer. I learned a ton about the decision-making process of a multi-billion dollar organization, and was pretty blown away by their sincere commitment to social responsibility programming. At State, we should also be proud to know that the NBA really relies on us around the world as subject matter experts and partners. There are dozens of Posts with whom we worked throughout the year—whether it be for women/girls-centered programming in Latvia and Ethiopia or to help demystify the visa process for the families of our players in Serbia or Congo.

Q: What did you learn from this private sector experience?

MO: The private sector exposure was fantastic. I’m bringing back to State a wealth of knowledge in monitoring and evaluation and emphasizing efficiency. I do have to admit that the time away also reinforced my love for the Foreign Service, our mission and our wonderful colleagues. My private sector teammates always found it fascinating that we get to travel the world on behalf of the country, and were every bit as interested in what we do day-to-day as I was of their work.

Morgan O’Brien’s views/opinions expressed on the blog/podcasts are not necessarily those of the State Department.

Check out the diplosport links below and while you’re at it, you might also check @SportsDiplomacy, the official Twitter account of exchanges.state.gov/sports

Sound Cloud: https://soundcloud.com/diplosport

iTunes: http://bit.ly/DiploSport

Google Play: http://bit.ly/2bUgvdI

Blog: http://www.diplosport.com/blog/

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State/OIG Report on ECA Program – Whew! What a relief that this is so boring to everyone!

Posted: 4:08  am EDT
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On October 24, 2009, the AP reported the following:

The State Department’s internal watchdog concludes in a new report that the nation’s student foreign exchange programs need better federal oversight, after a scandal in which students were placed in shoddy homes in Pennsylvania.

The State Department’s acting inspector general, Harold W. Geisel, said in the report that the department’s Bureau of Educational and Cultural Affairs had largely abdicated its responsibility to ensure the well-being of thousands of exchange students who come to the United States each year.

The day before, the acting State/ECA boss wrote an email to Cheryl Mills on the IG report press coverage:

Via foia.state.gov

 

Screen Shot 2015-08-04

Email in pdf here.

Maura Pally is the the Senior Vice President, Women and Youth Programs, and serves as Acting CEO a the Clinton Foundation.  Previously, she served as Acting Assistant and Deputy Assistant Secretary of State for Educational and Cultural Affairs (ECA). Prior to joining the U.S. Department of State, she also served as deputy counsel for Secretary Clinton’s first presidential campaign.

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State/OIG: Bureau Overseeing Youth Exchange Program “Exaggerated” On-Site Review Results and Compliance

The same day that MSNBC’s Rock Center aired allegations that exchange students were sexually abused in youth programs overseen by the State Department, it also ran a companion piece featuring the State Department’s official spokesperson, Toria Nuland defending the foreign exchange program (see Critics blame State Department for turning a blind eye on sex abuse).

Quick excerpt below:

The State Department defends the high school exchange program, and maintains that the vast majority of the 200,000 students who have come to America over the past decade have had an overwhelmingly positive experience.

“These kids have an enormously gratifying, rich, fantastic American experience that lasts with them for a lifetime,” said State Department Spokesperson Toria Nuland.

State Department staffers told NBC News that a fraction of one percent of high school foreign exchange students reported sexual harassment or abuse by a host parent for the 2010-2011 academic school year.

The very next day after the MSNBC report aired, the Office of the Inspector General finally released its much awaited review of the  Bureau of Educational and Cultural Affairs (ECA) who has oversight over this program and multiple other programs, from Fulbright to the Summer Work Training (SWT) program.

Here is a quick summary of what the IG says about the program for secondary school students:

  • From January 2010 through October 2011, ECA received allegations related to sexual abuse or sexual harassment of 118 participants in the secondary school student program.
  • The first-ever systematic on-site reviews found that 15 of the 39 sponsors did not comply with regulations.
  • The consequences?  Minimal sanction, a letter of reprimand, to 11 sponsors; there was no reduction in their level of authorized activity.
  • More serious consequences? 2 sponsors faced reduction of allocation and 2 organizations were terminated from the secondary school student program. (The terminated sponsors had placed students in the home of the same convicted murderer.)
  • The results?  These actions had the effect of reducing the secondary school student program by only 2 percent.
  • In spite of the limited impact of the on-site reviews, the OIG team noted that ECA/EC front office staff exaggerated the results in communications with senior Department officials, overstating the extent of both the program sanctions and ECA’s compliance activity.

So when the Rock Center report says this:

The Department dropped a number of organizations that previously were approved to place students with families and implemented new regulations meant to more thoroughly check out host families.

Number of organizations dropped actually equals to 2 based on the OIG report. And when they talk about background checks:

“We do training for the staff, we work with them on implementing the regulations.  We insist that they document now these home visits, these background checks…there is a 24/7 hotline the students can call if they encounter a problem with the host family,” Nuland said.

The OIG says “The regulations do not dictate, however, the type of criminal background check, and sponsors generally use private databases to fulfill the requirement. Because a number of states do not allow criminal information to be stored in these private databases, significant risk remains that students may be placed in homes with criminals.”

And that most probably is how we end up with 43 118 allegations related to the sexual abuse or sexual harassment of exchange students. Below excerpted from the report:

Secondary School Students

In 2009, a scandal involving the placement of secondary school students in Scranton, Pennsylvania, called into question the adequacy of ECA oversight of the 92 sponsors dealing with this vulnerable population. In 2010, for the first time, ECA embarked on systematic on-site reviews of the largest program sponsors responsible for the well-being of thousands of teenagers placed with host families nationwide. ECA sent teams comprising members of its Compliance, Youth Programs, and Grants staff to review the operations of the 39 largest sponsors, collectively responsible for 72 percent of secondary school student participants.

The on-site review teams found that many sponsors inadequately maintained SEVIS records, thereby thwarting the Department of Homeland Security’s efforts to fulfill its national security mandate of tracking the whereabouts of all J visa holders in the United States. Sponsors had not always completed the required annual criminal background checks on host families, resulting in teens being placed in homes with sex offenders and other felons. Given the challenges of the economy, sponsors were finding it difficult to attract host families. Rather than limit the number of students brought to the United States, some sponsors lowered standards. Students reported host family requests that they provide day care, do housework, perform farm labor, or work in host family-owned businesses. Some students had insufficient food and lived in squalor. From January 2010 through October 2011, ECA received allegations related to sexual abuse or sexual harassment of 118 participants in the secondary school student program.

Recommendation 38: The Bureau of Educational and Cultural Affairs should establish a process to refer credible allegations of criminal activity to the Bureau of Diplomatic Security, the Office of Inspector General’s Office of Investigations, or to an appropriate law enforcement organization. (Action: ECA)

Although in early 2009 EC established a Joint Review Committee involving three senior EC managers to consider sanctions against program sponsors, when the high school review results came in, EC decided to convene an “ad hoc evaluation review committee” to provide an independent review of the results and recommend appropriate remedial action where needed. It is unclear why the established review body, which included staff familiar with both the regulatory requirements and day-to-day operations of the program, was bypassed. The OIG team was told that EC thought this ad hoc group “could better withstand external scrutiny.”

These first-ever systematic on-site reviews also found that 15 of the 39 sponsors did not comply with regulations. Section 502(a) of the Enhanced Border Security and Visa Entry Reform Act of 2002 states that material failure to comply with record keeping and reporting requirements shall “result in the suspension for at least one year or termination…at the election of the Secretary of State, of the…entity’s designation to sponsor exchange visitor program participants.” Despite this, the ad hoc evaluation review committee gave only the minimal sanction, a letter of reprimand, to 11 sponsors; there was no reduction in their level of authorized activity. ECA reduced the DS-2019 allocations for 2 sponsors by a collective total of 310 forms and terminated from the secondary school student program 2 organizations with a combined allocation of 277 DS-2019 forms. (The terminated sponsors had placed students in the home of the same convicted murderer.) These actions had the effect of reducing the secondary school student program by only 2 percent. In spite of the limited impact of the on-site reviews, the OIG team noted that ECA/EC front office staff exaggerated the results in communications with senior Department officials, overstating the extent of both the program sanctions and ECA’s compliance activity.

The acting DAS recognizes that the creation of a system for ECA to check prospective host family names against a database of past incidents and complaints will better ensure that secondary school students are not placed with families unfit to host students. He convened discussions with his staff, the Youth Programs division in ECA’s Office of Citizen Exchanges, and the Office of the Legal Adviser. They agreed to implement a pilot program to cross-check the names of host families of all ECA-funded secondary school exchanges and aim to cross-check all host families in the future. ECA might also consider cross-checking sponsors and their local representatives.

The secondary school student program regulations require annual criminal background checks on all adult members of a host family. The regulations do not dictate, however, the type of criminal background check, and sponsors generally use private databases to fulfill the requirement. Because a number of states do not allow criminal information to be stored in these private databases, significant risk remains that students may be placed in homes with criminals. EC and the Office of the Legal Adviser are considering the role that law enforcement agencies may play with regard to checking host family names and criminal history as well as other mechanisms for improved screening of host families.

Recommendation 39: The Office of the Legal Adviser, in coordination with the Bureau of Educational and Cultural Affairs and the Bureau of Diplomatic Security, should determine whether host family names can be checked against law enforcement databases and, if so, develop a procedure for such checks. (Action: L, in coordination with ECA and DS)

Elsewhere in the report is this item:

Weak Regulations Undermine Oversight
Weak regulations make responsible management of ECA’s numerous programs difficult. Even limited sanctioning of inadequate sponsor performance requires a time-consuming, multistep exercise that rarely results in meaningful consequences for a delinquent sponsor. When EC staff members have recommended higher level sanctions, they have often been overruled. Since 2006, ECA has imposed a total of 21 sanctions that led to termination or a reduction in the number of authorized DS-2019 forms for reasons other than insufficient program activity (5 participants per year). Some organizations that placed secondary school students in homes with convicted felons continued for extended periods to operate as designated sponsors. Current multilayered regulatory requirements render swift and meaningful sanctions impossible: more than a year elapsed between ECA’s discovery that one sponsor had for years been placing high school students with a convicted murderer and ECA’s termination of the sponsor’s designation.

So what happens days after tomorrow? Another on-site reviews? More reduction of allocation, another couple of organizations terminated from the program?  I don’t know, but it seems to me that when the Department says that “even one child abused under these programs is one child too many” — it should manifest that talk into action and suspend this program until stronger regulations and oversight are in place.

Of course, this might not be all of it.  One line sticks out from the OIG report:

“Several observers commented that other programs have serious unaddressed issues about which the public is currently unaware.”

Pray tell, who’s going to make the public aware of these issues?

Domani Spero

Related item

Inspection of the Bureau of Educational and Cultural Affairs (ECA)| Report Number ISP-I-12-15, February 2012