CBP Stops Elaborate Fraudulent Employment Scheme to Deprive American Workers of Jobs

So complicated, I can't figure out exactly what it was, who did it, or really even why

By Andrew R. Arthur on August 27, 2020

Update: Georgia Case Gets Curiouser and Curiouser, but Looks Headed to a Good Outcome

Back in May, CBP reported that it had stopped "33 Korean Nationals with fraudulent employment letters" who were arriving at Hartsfield International Airport in Atlanta (ATL) from Inchon (Seoul), South Korea via Korean Air. This was plainly a complicated scheme — so complicated, I cannot exactly figure it out myself, or even who did it or why. But it seems pretty plain those stopped intended to take jobs from American workers at a work site that is heavily state-subsidized.

Some background: In the middle of May, CBP officers encountered 12 Korean nationals, each of whom had in their possession the aforementioned fraudulent employment letters, which stated that "they had a specific skill set for specialized work", to work illegally at a construction company and battery plant in Georgia.

Local reporting revealed that the battery plant in question was the SK Battery America plant, which is currently under construction in Jackson County, Ga. SK Battery America is a subsidiary of Korean-owned SK Innovation (SKI), and when the $2.6 billion factory is up and running, that plant will manufacture car batteries — and purportedly employ 2,600.

That latter point is important, because SKI received tax abatements and grants in the neighborhood of $300 million to get that plant up and running, among "the biggest tax relief packages" ever awarded in Georgia. Jackson County provided the land, to boot.

With that kind of investment, the locals have a lot of "skin in the game", as Warren Buffett would say. Nonetheless, some have complained that they tried to get employment in the construction of that plant, unsuccessfully:

"Georgians have gotten the shaft over the SKI battery plant," complained David Cagle with the Georgia Local Union 72 of plumbers, pipefitters, and HVACR technicians.

Cagle said when his people tried applying for the construction jobs to build the plant itself, they were told nothing was available.

"We've got about 500 people out of work right now who could come up here and be on this job and making a living," he said. "Instead, the Koreans are making a living."

Which brings me back to the 12 Korean nationals at ATL. During the course of interviews by CBP officers, they revealed that they were going to be paid between $6,000 and $7,000 to work two to three months at the plant. Again, according to CBP, the letters that they carried claimed that they each had (unspecified) specific skills that they, apparently, did not possess.

The first thing that is unclear in all of this is what specific visa (if any) they offered to obtain admission, a fact not clarified by the following statement by the agency: "CBP revoked an additional 25 Electronic System for Travel Authorization (ESTA) applications linked to the fraud scheme."

As CBP's website explains: "ESTA is an automated system that determines the eligibility of visitors to travel to the United States under the Visa Waiver Program (VWP)."

Before I go any further, this was not a one-off incident, as a few days later — again at ATL — CBP nabbed another 21 Korean nationals, again "with suspected fraudulent employment letters", and this time the agency cancelled an additional 18 ESTA applications.

CBP noted near the end of their press release that all 33 arrivals were denied admission under the VWP — strongly suggesting (but not proving dispositively, as I explain below) that they were applying under that program.

VWP, which Congress established in section 217 of the Immigration and Nationality Act (INA) and which is administered by DHS, "enables eligible citizens or nationals of designated countries to travel to the United States for tourism or business for stays of 90 days or less without first obtaining a visa." Among the 39 countries in the VWP is South Korea. So far, so good.

The VWP permits nationals of those countries to travel to the United States for business or tourism. Specifically, under section 217(a) of the INA, to be admitted under the VWP, the alien must be applying for admission as a nonimmigrant visitor under section 101(a)(15)(B) of the INA. Nonimmigrant admission is permitted under that provision if the alien "is visiting the United States temporarily for business [usually on a B-1 visa] or temporarily for pleasure" (usually on a B-2 visa).

This raises a couple of points. First, an alien "coming for the purpose of ... performing skilled or unskilled labor" is barred from admission under that nonimmigrant visa category. Two, by regulation, what constitutes "business" for purpose of a B-1 visa admission is extremely limited.

Specifically (and perhaps most importantly), while aliens may enter on a B-1 visa to supervise or train others doing building or construction work, they may not themselves perform any such building or construction work.

B-1 visitors may also consult with business associates, go to conferences and conventions, settle estates, negotiate contracts, participate in short-term training, and engage in other similar activities, but outside the travel industry, that's about it. Again, by regulation, "local employment or labor for hire" is not permitted.

Interestingly, however:

An alien of distinguished merit and ability seeking to enter the United States temporarily with the idea of performing temporary services of an exceptional nature requiring such merit and ability, but having no contract or other prearranged employment, may be classified as a nonimmigrant temporary visitor for business.

So, attempting to put all of the pieces together, the "fraudulent employment letters" CBP claims that the 33 excluded Korean nationals possessed either stated that they were coming to supervise or train others in construction (but not actually build anything themselves) or they claimed the 33 had some sort of "distinguished merit or ability" and were coming "with the idea" to perform some service requiring the same (but had no contract or arrangement to do so).

Given the fact that they were set to earn somewhere between $21.88 an hour (two months for $7,000, assuming a 40-hour week — itself a major assumption) to $12.50 an hour (three months for $6,000, and a 40-hour week), they likely were not aliens of distinguished merit and ability — or if they were, they were poorly paid ones.

Nor do those seem like the kinds of wages that a construction supervisor would earn. Underground utility apprentices, with no experience, can earn $13 to $20 an hour in Pendergrass, which is also in Jackson County. Logically, supervisors on a major construction site could earn much, much more.

As noted, though, I am not even sure that they were coming on the VWP, no matter how likely that appears to be. They could have been coming on some other employment-based nonimmigrant visa (like an H-1B for a specialty occupation), questions were raised during inspection, and they then sought to enter with just their passports under the VWP.

Given the fact that fraud at entry is itself a ground of inadmissibility under section 212(a)(6)(C) of the INA, however, that does not seem terribly likely — if you appear inadmissible under VWP (and don't claim asylum), you simply get returned — no removal hearing is required (part of the "waiver"). So if they attempted such a scheme, they were poorly informed.

Really, though, the biggest question is why anyone went to the trouble of crafting such letters to begin with. VWP entrants who simply claim to be tourists are generally just admitted (think of any entry you ever made to Canada, Mexico, or any other country where all you needed was a passport for admission), provided they are not caught by CBP officers at the port.

Perhaps that was the concern of the drafter of the letters in question. To avoid any possibility that a CBP officer would not accept that a large group of Korean nationals were coming from Inchon to Hartsfield to tour CNN, go to Centennial Olympic Park, visit the World of Coca Cola, or take in any of the other sights in the Peach State, they drafted bogus employment letters. If so, they took that course of action not expecting that CBP officers would be as querulous and vigilant as they were.

That said, neither CBP nor the local reporting indicates who prepared those letters. SK Battery America denies that it does any construction hiring at the Jackson County site, and contends that it requires all of its "contractors to ensure their workers at the site meet proper state and federal regulations".

Then, of course, there is the question of why the second group of 21 attempted entry at the exact same airport when the first dozen failed. Respectfully, the fraudsters should have been on notice, and expected the exact same outcome. Unless, of course, they had tried it before — successfully.

In that regard, Rep. Doug Collins (R-Ga.) asked CBP and ICE on August 18 to explore whether "there are foreign workers illegally employed" at the site. I would hope that ICE has already done so, even without Rep. Collins' urging.

Finally, there is the question of why anyone would have attempted to fraudulently bring 33 Korean nationals to Georgia to work at or on a battery plant to begin with. A round-trip flight from Inchon to ATL on Korean Air is around $1,400, on top of the money the workers would be paid. If there are 500 construction workers looking for jobs in Jackson County (the June unemployment rate there was 5.2 percent; it stood at 7.2 percent in May), it hardly seems to be worth the effort or the risk to fly in additional laborers to work fraudulently.

In any event, kudos to the CBP officers for unraveling this scheme, and thereby protecting American jobs. You can find job openings at SK Battery America here.