Updates on Visa Mills, EB-5 in South Dakota, and China City

By David North on March 14, 2014

There has been a series of recent developments about some of the visa mills and EB-5 projects that CIS has reported on earlier. For instance:

Visa Mill No. 1. Herguan University, the California private-for-profit once raided by ICE on suspicion of being a visa mill, had a couple of setbacks in recent weeks, though it is still allowed by ICE to issue the I-20 documents that lead to student visas (F-1s) for aliens.

We at CIS reproduced, un-edited, an inaccurate, misleading, and badly written announcement about a "graduation ceremony" that Herguan had on its website as an example of the kind of sloppy editorial work product no university should tolerate. Herguan must have agreed because a few days later the photo and the text disappeared from the website; the language on the rest of the site, however, would make an English teacher cringe.

That was a self-correction, but it was overshadowed by a correction by a federal judge who is presiding over the immigration fraud trial of Herguan's owner and CEO, Jerry Wang. Wang's lawyers had filed a motion in the criminal trial objecting to many aspects of the indictment. The judge overruled every single objection on February 26.

The fraud trial is scheduled to begin on July 14, but Wang's lawyer has asked for a postponement on the grounds that he, the lawyer, is scheduled to be in China that week. Wang himself, who is out on bail, is not allowed to leave the court district without the judge's permission. Users of PACER, the U.S. courts electronic data system, can follow developments at case 5:12-cr-00581-EJD

Visa Mill No. 2. Speaking of visa mills, the University of Northern Virginia, whose Annandale, Va., campus was closed earlier by the Commonwealth of Virginia, and whose foreign student activities were subsequently terminated by ICE, as we reported earlier, had announced that it had begun operations in South Dakota.

Following inquiries from the South Dakota Board of Regents, the State's Office of the Attorney General, and the Associated Press (all encouraged by CIS), UNVA eliminated from its website most of its claims that it was offering courses in that state. The AP reported that the "campus" shown on its website as a large brick building next to a nice lake, was, in fact, a single "empty office suite" behind, the reporter told me, an unmarked door. The Washington Post carried the story.

EB-5 in South Dakota. Meanwhile, elsewhere in that state, both houses of the GOP-controlled legislature have agreed to conduct an investigation of the EB-5 program there. There has been an unusual amount of South Dakota state government participation in the program, losses of tens of millions in bad EB-5 investments, and the mysterious death of a former Republican state cabinet member and EB-5 wheeler-dealer who allegedly shot himself in the stomach with a shotgun — all reported in earlier CIS blogs.

The legislature called for a report on the subject by December 1, thus putting off any such document until well after the November election. For more, see this article in the Aberdeen News.

EB-5 and China City. China City is a pending EB-5 proposal that would take a large chunk of upstate New York wilderness and turn it into a combination Chinese theme park, university, and urban area. We recently heard that an angry mayor of the town where the project was to be built called off a scheduled meeting on the subject because he felt that he was getting flows of conflicting statements from the promoters.

Municipal building and zoning permits would be needed for China City if the project in the town of Thompson were to move ahead. The reaction of Town Supervisor Bill Rieber was spelled out in this local news story.

Supervisor Rieber's experience with the China City promoters and my research are similar. I found that one of the China City proposals said that the university to sprout there would be a for-profit (and Sherry Li, the manager of the project, confirmed that to me over the phone). Yet part of the plan was for the presence of about a dozen huge houses for "college donors".

A for-profit institution does not have donors.

Similarly, the plans call for a multi-million dollar contribution to the costs from the federal government, but no specific source is mentioned and as one who knows a bit about the feds I cannot imagine what agency would chip in — I think it was $65 million — for such a scheme.

My sense is that USCIS, which has been sitting on the China City proposal for more than two years, would like it to go away without having to decide on it. On the one hand, they are all for the EB-5 program, but on the other, the China City venture is too full of holes to approve.

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Whereas all of these items indicate setbacks for entities that are trying to stretch the immigration law for personal profit, none of the reports are of terminal actions. UNVA still has a little office in the Washington suburbs (which I visited recently), Herguan still admits foreign students, South Dakota is still fond of the EB-5 program, and the China City proposal has not yet been killed by USCIS.

Will the other shoe drop on any of these ventures? Let's hope so. And soon.