This is a different sort of story about a visa mill, and the misuse of F-1 (student) visas. We have:
- A Chinese warlord and his descendants;
- Mighty Tesla engaged in small-scale immigration cheating; and
- The use of an obscure, Civil War-era judicial mechanism by the good guys.
On the other hand, there are these same old, same old elements:
- The school is in California's Bay Area;
- The use of student visas to provide work permits to non-students;
- Widespread violations of the rules for foreign students by the university;
- The use of OPT subsidies for employers, but the absence of any mention of this;
- Bad press reviews over the years;
- Chinese leadership of a marginal school where Indian students predominate; and
- The total collapse of federal and state executive agencies' ability to correct multiple wrongs.
This is the evolving story of the International Technological University (ITU) of Santa Clara, Calif., a non-profit entity that has just settled claims for some of its wrongdoings with a new set of actors in the field, with the promised payment of $1,170,000 — an amount its form 990 filings suggest it may not have. Its most recent IRS filing said that it closed out its books on June 30, 2019, with assets totaling only $721,763, compared to $13,045,746 two years earlier
The new actors — an encouraging development — are a former ITU executive who used the Civil War-era False Claims Act to sue on behalf of the federal government in what is called a "qui tam" proceeding, and the Homeland Security Inspector General, never before a player in the visa mill field. That act was used in the Civil War to regain funds for the government from war profiteers.
The oddity is that the settlement did not stem from the long list of immigration law violations regarding foreign students and visa policies, nor from the low level of education provided (such as granting everyone an A, including those who did not attend classes). Instead, it was the financial harm to the U.S. government when a lower set of visas fees were substituted for higher ones, thus causing the federal government to lose money. Bay Area employers, including Tesla, paid F-1 visa level fees, rather than much higher H-1B ones, when they used the student visa as a substitute for the H-1B, which is illegal.
Since Concepcion Saenz-Cambra, a PhD and a one-time executive at ITU, filed the qui tam claim on behalf of the government, she is supposed to get a big chunk of the settlement, and here's hoping that she actually gets some money. The qui tam mechanism is rarely used in immigration litigation.
While it is good to know that ITU is paying a penalty to the government and to Saenz-Cambra, the place remains in business despite the public record. Neither the state of California nor the ultra-sleepy arm of ICE that oversees foreign students, the Student and Exchange Visitor Program, have closed the university, nor has its academic accreditor done so, though the latter has issued a show-cause ruling against ITU.
The Accreditor. The Western Association of Schools and Colleges (WASC) is the accreditation agency for ITU. On October 18, 2019, it placed ITU in show cause status:
This action was taken after consideration of the events since early August when there were numerous and significant changes in the leadership at both the administration and board level, culminating with the sudden action of an email to all staff on October 15, 2019 stating that all staff are indefinitely furloughed due to significant financial circumstances.
...
[T]he institution has the burden of proving why its accreditation should not be terminated.
Bad Press. The leadership changes are spelled out by Wikipedia:
In 2011, upon Shu-Park Chan's retirement, the Board of Trustees elected his son Yau-Gene Chan, previously Executive Vice-President, to the ITU presidency. Following the WASC special investigation into Third Party Comments in February 2015, the Board of Trustees removed Chan and appointed Dr. Gregory O'Brien as the new President of ITU. In October 2019, the Board of Trustees reinstalled the previously removed Chan to be the president and Chan immediately furloughed all staff citing financial difficulties. [Internal citations omitted.]
KPIX, the CBS Television affiliate in San Francisco, examined ITU at length in 2015, reporting:
If you want to come to the United States and get a job, it's a well-known "secret" that a student visa is the easy ticket in, and all you need is $20,000 to enroll in the right university.
Several colleges in California have recently been caught abusing the system, and now sources tell KPIX 5 yet another one in San Jose is in the government crosshairs.
Deserted hallways, half empty classrooms. Yet last year 2,700 students were enrolled at International Technological University, a recently accredited graduate school in San Jose. So where is everyone?
The story continued:
Five years ago, a full-time ITU student was murdered in a robbery in Oklahoma. He was working at a gas station there. A former admissions officer at the time says the school then was nothing more than a visa mill.
KPIX went on to explain that ITU had only the loosest knowledge of where its students (or "students") lived and worked, although it had the duty to keep track of its students so that they could continue to work legally in the U.S. KPIX, as is the custom of the media and the government did not point out that these student workers were in the Optional Practical Training program, which gives their employers (and sometimes the students or alumni) an 8.25 percent subsidy, because they are excused from paying the normal payroll taxes.
Tesla. The firm played only a cameo role in these proceedings, having used ITU to cause the issuance of F-1 visas to two of its workers who were about to lose H-1B status; this saved Tesla several thousand dollars because of the difference in the fees charged by the two programs, and allowed the individuals to stay in the U.S., although the question of their actual status as students is questioned in the complaint. Tesla and a number of other bit players were excluded from the settlement, which was between ITU and the DHS Inspector General's Office.
This was not the first Tesla brush with the immigration law known to CIS; a few years ago it was caught using workers brought to this country on B-1 visas, when that is illegal. The workers, in this case, were from Europe and were paid miserable wages. Tesla pleaded ignorance of the law, as we reported at the time, asking the question: "If Tesla is smart enough to build electric cars, is it not smart enough to know what's going on within its own factory? Apparently not." (Disclosure: I have a managed brokerage account over which I have no control. It bought some shares of Tesla for me some years ago.)
The Chinese Warlord and His family. Routinely in charging documents lawyers describe the parties in the briefest way possible, such as "Sam Jones is a resident of Chicago" or maybe "Sam Jones, a teacher, lives in Chicago."
In the PACER file for the case (3:15-cv-04654-WHO) the complaint states:
ITU was founded in 1994 in San Jose, California by Dr. Shu-Park Chan, tenth son of the famous General Jitang Chen, Warlord of Guangdong Province (a.k.a. Canton Province) ("Warlord Chen") in Southern China from 1928 to 1936.
The current president of ITU is his grandson, Yau-Gene Chan, who succeeded his father as president, was removed from that job, and restored to it, as Wikipedia has reported. Whether the Chen/Chan matter reflects a name change or a typographical error, is not known.
Speaking of typography, there is no connection between ITU, the university, and the ITU, the long-time union of typesetters, the International Typographical Union, now a part of history.