Roundup: Infosys Moves Ahead in UK, ACICS Gets Pounded by USA Today, and SEC Gets More EB-5 Disgorgements

By David North on February 19, 2020

There have been interesting recent developments in three quite different immigration-related stories that we have been following:

1. The son-in-law of the president of the huge (H-1B absorbing) Indian outsourcing company Infosys has just been named the UK's chancellor of the exchequer. He is Rishi Sunak, and now holds the job formerly held by, among others, Winston Churchill, Neville Chamberlain, Gordon Brown, and John Major — all of whom became prime minister, as did many other ex-chancellors. Formerly an F-1 student in the States, one of Sunak's degrees is from Stanford.

2. A college-accrediting entity that we have often criticized in the past for its low standards, the D.C.-based Accrediting Council for Independent Colleges and Schools (ACICS), which allowed the continued existence of numerous visa mills, has attracted big league journalistic attention in a devastating and detailed article in USA Today.

3. The Securities and Exchange Commission has secured more than $5 million in disgorgements from three California-based EB-5 operators, one of whom (Emilio Francisco) used the immigrant investors' money for what is getting to be a cliché — buying a yacht. That program provides a family-sized set of green cards to migrants who place $900,000 in a DHS-identified, but not government-guaranteed investment. The dollar value of these investments used to be $500,000. Most of these investors are the nervous rich in China.

More on each of these stories:

Infosys, Sunak, and the Big Four. Rishi Sunak is a UK-born son of migrants from South India; a prosperous businessman in his own right, he married a daughter of N. R. Narayana Murthy, the Indian-born boss of Infosys. After the inevitable Oxford degree and the unlikely Stanford one (an MBA), Sunak was elected to the Parliament as a Tory from a Yorkshire seat, and held a lesser government post in the prior Johnson regime, as we reported earlier.

There is nothing quite comparable to the chancellorship in the American government; it is as if the incumbent were, simultaneously, a member of the Senate, the secretary of Treasury, and director of the Office of Management and Budget. This position and those of the prime minister, the home secretary, and the foreign minister, are the big four of the UK political establishment.

The four are routinely photographed together during question time in the House of Commons, with the four of them sitting side by side on the front bench. That Boris Johnson is the prime minister relates directly to the Brexit question, part of which dealt with the little control that the UK had over immigration from Europe.

Interestingly, the new home secretary, Priti Patel, is also of Indian ancestry, and she is in charge of immigration; this is the first time in British history that two of these four positions have been in the hands of people with subcontinent roots.

ACICS. While the mainstream media has almost completely ignored the issue, we at CIS have frequently noted its low standards and its almost execution at the hands of the Obama administration, only to be revived by Betsy DeVos, the Trump secretary of Education. More specifically, we noted ACICS' overly gentle treatment of places like Stratford University and Virginia International University (now Fairfax University of America), both of which major in foreign students and in the all-too-many OPT work permits they create (see, most recently, here and here).

The USA Today investigative reporting found, in a matter of hours, that Reagan National University, of Sioux Falls, S.D., while fully accredited by ACICS, simply does not exist. USA Today then engaged in a bit of history:

The Virginia government closed [the University of] Northern Virginia in 2013 because it wasn't accredited. It resurfaced the same year with a South Dakota address — the same one Reagan National used on business filings, and the same agent, Xinhua Fan, spelled slightly differently from the name listed for Reagan National's president.

In some ways, South Dakota was the ideal place for Reagan. The state has among the laxest rules for colleges in the country. State officials merely ask colleges whether an accrediting group has approved them — they don't independently hold universities accountable.

The webpage for Reagan National disappeared shortly after the USA Today story appeared.

All of this may have come as news to USA Today readers, but not to ours, as we had the historical part of the story more than five years ago.

The USA Today article, unfortunately, did not discuss the motive for the creation of Reagan National; I can only assume that it wanted to make money from aliens more interested in work permits than in getting an education.

Disgorgement and Due Diligence. Emilio Francisco's name rang a distant bell; I checked our records and found that I had tried an experiment in connection with his scams, and with how little it would have taken for an investor to have sussed him out.

Knowing that he was a California lawyer, I spent about 10 minutes online and found quickly that the for-profit law school (a rare category) he attended, Western State College of Law, had been ranked 189th out of 197 law schools nationwide, and that he had twice faced disciplinary actions by the California Bar, being suspended from practice for nine months in the second case. Knowing those two facts, both laid out on the public record, one or more of the 144 investors in his schemes might have asked a few more questions, but apparently none did.

The SEC, which is the much-needed cop in the EB-5 arena, collected in this case $1.9 million in disgorgements and $369,000 in fines from Francisco, as well as $3.8 million in disgorgements from another EB-5 middleman, Robert A. Ferrante (who also paid a $369,000 fine), and a fine of nearly $188,000 from a third person, Marilyn R. Thomassen.

My understanding is that disgorgements are, in effect, reparations paid to those who lost money and that the fines go to the U.S. Treasury; for more see this Law360 article (behind a partial paywall).

One hopes that disgorgements discourage deception and deviousness.