DHS Drops Other Shoe on 'Pretend Employers' Fraud in OPT Program

By David North on June 19, 2020

The Department of Homeland Security has just taken a useful move to deport or deny re-admission to some 4,600 alien college grads who have been abusing the Optional Practical Training program.

The aliens did so by paying a pretend employer to give them "reference letters", which they use to maintain what looks like legal OPT status while working, in fact, for yet another employer, in the latter case illegally.

The news comes from an unlikely source, a press release from a Houston law firm, Reddy & Neumann, which wrote: "4,600 Nonimmigrants Expected to be Deported for Using Fraudulent Experience Letters."

The firm went on that some 100 F-1 "students" (really alumni) "mostly from India, had received a notification from the Mumbai Consulate regarding [their] visa revocation" for this reason.

The scheme, as we reported in October 2018, had been stumbled upon by the FBI as it investigated what it regarded as a national security breach. Then both the NBC-TV affiliate in the Bay Area, and CIS — acting in the same manner, but independently of each other — pointed out that there were other "pretend OPT employers" using the scheme, and making millions in the process.

We identified about a dozen firms that might be in the business by noting their feeble websites and an unusual hiring pattern reported (but apparently not acted upon) by the sleepy arm of ICE that is supposed to regulate international students, the Student and Exchange Visitor Program (SEVP). Before discussing the pattern, one must describe the three different parts of the OPT program: there is CPT (Curricular Practical Training) for actual students; there is regular OPT lasting a year for all newly graduated foreign students, and there is the STEM extension of two additional years for aliens with degrees in science, technology, engineering, or math. Routinely, firms that use the graduate elements of the program use the student (CPT) part as well. The suspect firms never used CPT but said they hired hundreds and thousands of OPT and STEM alumni.

Here is an example, drawn from public records of SEVP for 2017:

Employer OPT + STEM CPT Total
Google 2,642 871 3,514
Integra Technologies 3,474 0 3,474
Microsoft 1,915 482 2,397

Sources: Columns 2 and 3, DHS statistics; column 4,
column 2 plus column 3. A zero in column 3 may mean
some use of CPT workers, but the employer was not in
the top 200 for CPT, and could not have had more than 30 of them.

Integra Technologies is cited in the Reddy & Neumann document as one of the major players in this illegal scheme. It has since gone out of business. SEVP apparently did not notice the remarkable discrepancy shown above, or if it did, it did not act upon it.

Our question at the time was: Would DHS act on this information by deporting (or denying re-admission) to the phony OPT workers? The answer according to the law firm is that they are doing so, but that leaves other questions.

A Policy Puzzle. Can a questionable foreign-worker program, like OPT, become less dubious as a direct result of fraud? Oddly, in many cases, it can.

The regular OPT program and the pretend employer scheme both deny jobs to U.S. workers, and are equally undesirable for that reason. But the regular program includes a subsidy for the employers drawn from the non-payment of payroll taxes, which, in turn, support the Social Security, Medicare, and U.S. unemployment insurance trust funds. There is no such subsidy in the "pretend employer" scheme, unless the employer (the one the fraudulent OPTs actually work for) commits another fraudulent act, that of claiming OPT status for the worker when it does not exist.

Some employers may just hire these phony OPT workers as regular U.S. workers, and thus pay payroll taxes; other employers may know that the aliens are working illegally, and do not pay payroll taxes as a result. But that would also be illegal.

If sending out "you're deported" letters is the dropping of one shoe, as it is, what about the other shoe? Will DHS start penalizing the actual employers who hired those to be deported?

I doubt it. The enforcers have few resources and plenty of un-acted-upon leads involving massive violations of employer sanctions to handle before even thinking about these, by definition, one-at-a-time violators.