EB-5, Immigration Fraud, and a Visa Mill — All in One Court Case!

By David North on July 17, 2018

As one who writes from time to time about immigration fraud, about the controversial EB-5 (immigrant investor) program, and about a suspect visa mill, Northwestern Polytechnic University (near San Francisco), I was excited to discover a federal court case that seems to involve all three elements. What a find!

The case is also connected to submarine warfare, and a national security threat, and a front for the Chinese Navy, all before a federal judge in Massachusetts. (The Pacer file is 1:18-cr-10205-DJC.)

While Shuren Qin, a Chinese national who got his green card through the EB-5 program, was arrested last month and is still on trial, most of the rest of the story isn't quite what it seemed at first:

  • Northwestern Polytechnic University (NPU), which is, in fact controlled by Chinese, and is having serious trouble with the authorities over many issues, turns out not to be indicted; it is a similarly named Chinese university that serves as a front for the Chinese Navy that has caught the ire of the prosecutors;
  • The EB-5 relationship is pretty weak; Qin, when he filed for his EB-5-created green card, said he had not committed any federal crime, and thus, according to the indictment, he committed immigration fraud because of that statement (if he, in fact, did commit one when selling marine equipment to the Chinese university).
  • The national security threat is still before the courts, but it involves the sale of 78 hydrophones, apparently for about $1,800 each, to the Chinese university. Americans can buy such things for $1,500 each on the internet; it strikes me that anything that cheap and that readily available can't be much of a security threat, but that's not my field.

Qin riled the authorities because he sold the hydrophones — you can use them to listen to fish or to submarines — to the Chinese university, which is on the no-no list because of its relations to the Chinese navy. As Qin's lawyers have pointed out, it is OK under U.S. export controls to sell hydrophones to just about anyone in China, just not to that university or to the military.

On the other hand, who would need 78 of them? And why aren't the high-tech Chinese manufacturing them and under-cutting the U.S. market?

I also learned that the Chinese navy is not an equal arm of that nation's military establishment. As the indictment states: "[T]he Chinese People's Army ("PLA") Navy ... is the naval warfare branch of the Chinese Army."

Meanwhile, back in the United States, Northwestern Polytechnic University, according to IRS records, calls itself a nonprofit, but rakes in — year after year — about $72-$73 million in revenues, and chalks up — year after year — close to $54 million in profits; a remarkable profit margin of more than 73 percent. This is a matter of public record and shows up on NPU's Form 990 report to the IRS. Virtually all of the students are aliens, and virtually all of them move on to jobs under the OPT program, which in turn is subsidized by our government — subsidies not available to U.S. college grads.

How Northwestern Polytechnic University secured college accreditation was the subject of a wonderful expose by BuzzFeed, as we reported a couple of years ago.

Thinking only of Northwestern Polytechnic University, why IRS and DHS and DOJ — and California state authorities — continue to tolerate this situation is a continuing puzzle, but it is safe to say that the visa mill is not a front for the Chinese Army's Navy.

I'll try to remember to follow Qin's trial and will report on its conclusion.