An Old Story: Feds Raid Visa Mill, Close It, and Then Let It Open Again

By David North on June 12, 2014

DHS has done it again. It has raided an apparent visa mill, caused multiple federal indictments of the owner and four key executives, shut down classes at the offending school — and then let it open again!

It is beginning to be a pattern. After much investigation and inter-agency cooperation, ICE investigators and other feds raided five operations of a career college in New York and New Jersey on May 29 and, according to the local CBS station, scooped up lots of evidence of "inflating attendance records of foreign students", and then allowed it to re-open for classes 10 days later.

The entities raided are Micropower Career Institute and its sidekick, the Institute for Health Education. The raiders were from Immigration and Customs Enforcement, the U.S. State Department, and a new (and welcome) entity in such matters, the Inspector General's Office of the U.S. Department of Education.

The charges were that over the years MCI and IHE had mounted two separate but parallel criminal operations. Regarding the foreign students, the entities failed to tell ICE that a huge percentage of them were no longer, in fact, attending classes, which should have led to their departure from the country. But MCI and IHE continued to take in tuition fees from these students. This was a fraud upon DHS and the immigration law.

Meanwhile, the same institutions also had substantial numbers of domestic students, most of whom were supported by Pell Grants. (Such grants are not available to aliens.) There were substantial indications of non-attendance by these domestic students, but MCI and IHE staff altered the attendance records to show the domestic students were in class, and thus kept the flow of Pell Grants coming to the schools.

These were sizable operations. According to the complaint about 644 of the 729 foreign students at MCI's Manhattan campus, or 88 percent of them, had delinquent attendance records and should have been deported. So, in this one location, the institution was harboring more than 600 visa abusers, but only had 275 seats in the classrooms for the 729 F-1 students, plus an unknown number of domestic ones.

Similarly, the complaint notes that, "Since 2008, over $13 million in Pell Grant and other federal financial aid funds have been disbursed to MCI."

ICE paid a visit in 2011 to one of the MCI locations and noticed the lousy attendance records; the five who were indicted promptly transferred the foreign students who had not attended classes, but had paid their tuition, to other locations unwatched by the feds. Similarly, the quintet engaged in massive falsification of the attendance records of the domestic students, to preserve the flow of Pell Grants.

What were the immediate consequences of all this criminal activity (not yet, of course, proved in a courtroom)?

They were, at least in my eyes, pretty mild.

The five are all out on bail of $100,000 or $200,000; most of this is "unsecured", i.e., based on the signatures of three financially responsible people. Unless there are plea bargains, the trials will take years.

The schools, closed on May 29 by the government, re-opened about 10 days later, according to the institution's website. Perhaps attendance requirements will be handled differently now.

However, there is no indication anywhere — on the website, in the news coverage, in the U.S. Attorney's press release or in the PACER files (of federal court records) — that any action has been taken against the hundreds of foreign students, the F-1 visa abusers, who were cheating the immigration system.

All of this, sadly, is par for the course when it comes to DHS and visa mills. There was — and is — the case of Herguan University in Silicon Valley, which was raided by ICE in 2012, closed briefly, and then re-opened soon after. Meanwhile the president, owner, and CEO, Jerry Wong, is on trial in federal court for fraud, with the actual trial scheduled to take place this fall. This unaccredited school still operates, as we noted in a recent blog.

Roughly the same thing happened with the University of Northern Virginia; ICE raided it, closed it briefly, and then despite a total lack of accreditation the agency allowed its re-opening. It was the Commonwealth of Virginia that finally cracked down on the institution, and then ICE followed suit, as we reported in another blog.

Those indicted in the New York case, as announced by Preet Bharara, the energetic U.S. attorney for the Southern District of New York, were Suresh and Samir Hiranandaney, father and son; family members Lalit and Anita Chabria; and Seemah Shah, an employee.

Bharara's office, incidentally, is well known for major suits against Wall Street interests that are settled with civil penalties, sometimes, at the billion dollar-plus level, but with virtually no criminal indictments. In the MCI case we have the opposite: five criminal indictments but no civil penalties such as the closure of the cheating schools.

Is it that gentlemen bankers are not appropriate for jailing, but lesser folk are? Is there a bit of class bias going here? One wonders. I think both cheating bankers and career school operators should be in jail.

I also have a sense that defrauding the government of money is viewed as more of a problem than increasing the size of the illegal alien population, although this case involves both.