Immigration Benefits: Additional Controls and a Sanctions
Strategy Could Enhance DHS's Ability to Control Benefit Fraud
(10-MAR-06, GAO-06-259).
In 2002, GAO reported that immigration benefit fraud was
pervasive and significant and the approach to controlling it was
fragmented. Experts believe that individuals ineligible for these
benefits, including terrorists and criminals, could use
fraudulent means to enter or remain in the U.S. You asked that
GAO evaluate U.S. Citizenship and Immigration Service's (USCIS)
anti-fraud efforts. This report addresses the questions: (1) What
do available data and information indicate regarding the nature
and extent of fraud? (2) What actions has USCIS taken to improve
its ability to detect fraud? (3) What actions does the Department
of Homeland Security (DHS) take to sanction those who commit
fraud?
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-259
ACCNO: A48758
TITLE: Immigration Benefits: Additional Controls and a Sanctions
Strategy Could Enhance DHS's Ability to Control Benefit Fraud
DATE: 03/10/2006
SUBJECT: Counterterrorism
Criminals
Forgery
Fraud
Immigration
Internal controls
Policy evaluation
Risk assessment
Sanctions
Standards
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GAO-06-259
* Results in Brief
* Background
* Fraud Is A Serious Problem, But Its Full Extent Is Unknown
* Although USCIS Has Taken Steps to promote Fraud Control, Add
* Internal Control Standards and Other Guidance Provide Direct
* Consistent with Internal Control Standards and Fraud Control
* Additional Internal Controls and Use of Other Best Practices
* USCIS Has Not Adopted a Comprehensive Risk Management Approa
* USCIS Lacks a Mechanism to Ensure That Ongoing Monitoring Oc
* USCIS May Not Clearly Communicate the Importance of Fraud Co
* Adjudicators and FDNS Staff Lack Access to Important Informa
* DHS Lacks Performance Goals for USCIS's Antifraud Efforts
* Most Benefit Fraud Is Not Criminally Prosecuted, but DHS Doe
* Conclusions
* Recommendations for Executive Action
* Agency Comments and Our Evaluation
* GAO Contact
* Staff Acknowledgements
* GAO's Mission
* Obtaining Copies of GAO Reports and Testimony
* Order by Mail or Phone
* To Report Fraud, Waste, and Abuse in Federal Programs
* Congressional Relations
* Public Affairs
United States Government Accountability Office
Report to Congressional Requesters
GAO
March 2006
IMMIGRATION BENEFITS
Additional Controls and a Sanctions Strategy Could Enhance DHS's Ability to
Control Benefit Fraud
GAO-06-259
IMMIGRATION BENEFITS
Additional Controls and a Sanctions Strategy Could Enhance DHS's Ability
to Control Benefit Fraud
What GAO Found
Although the full extent of benefit fraud is unknown, available evidence
suggests that it is a serious problem. Several high-profile immigration
benefit fraud cases shed light on aspects of its nature-particularly that
it is accomplished by submitting fraudulent documents and can be
facilitated by white collar and other criminals, with the potential for
large profits. USCIS staff denied about 20,000 applications for fraud in
fiscal year 2005.
USCIS has established a focal point for immigration fraud, outlined a
fraud control strategy that relies on the use of automation to detect
fraud, and is performing risk assessments to identify the extent and
nature of fraud for certain benefits. However, USCIS has not implemented
important aspects of internal control standards established by GAO and
fraud control best practices identified by leading audit
organizations-particularly a comprehensive risk management approach, a
mechanism to ensure ongoing monitoring during the course of normal
activities, clear communication regarding how to balance multiple
objectives, mechanisms to help ensure that staff have access to key
information, and performance goals for fraud prevention.
DHS does not have a strategy for sanctioning fraud. Best practices advise
that a credible sanctions program, which includes a mechanism for
evaluating effectiveness, is an integral part of fraud control. Because
most immigration benefit fraud is not prosecuted criminally, the principal
means of sanctioning it would be administrative penalties. Although
immigration law gives DHS the authority to levy administrative penalties,
the component of DHS that administers them does not consider them to be
cost-effective and does not routinely impose them. However, DHS has not
evaluated the costs and benefits of sanctions, including the value of
potential deterrence. Without a credible sanctions program, DHS's efforts
to deter fraud may be less effective, when applicants perceive little
threat of punishment.
Minimizing Immigration Benefit Fraud through Internal Controls
Source: GAO.
United States Government Accountability Office
Contents
Letter 1
Results in Brief 4 Background 8 Fraud Is A Serious Problem, But Its Full
Extent Is Unknown 13 Although USCIS Has Taken Steps to promote Fraud
Control,
Additional Controls and Best Practices Could Improve Its Ability
to Detect Fraud 19 Most Benefit Fraud Is Not Criminally Prosecuted, but
DHS Does
Not Have an Administrative Sanctions Program 35 Conclusions 38
Recommendations for Executive Action 40 Agency Comments and Our Evaluation
41
Appendix I Scope and Methodology
Appendix II Comments from the Department of Homeland Security
Appendix III GAO Contact and Staff Acknowledgments
Figures
Figure 1: USCIS Applications Completed in Fiscal Year 2005 9 Figure 2:
Immigration Benefit Fraud Detection and Referral
Process 12 Figure 3: Internal Control Environment 20
Abbreviations
AICPA American Institute of Certified Public Accountants
BFU Benefit Fraud Unit
CBP Customs and Border Protection
CFR Code of Federal Regulations
CIS Citizenship and Immigration Services
DHS Department of Homeland Security
DOL Department of Labor
FDNS Office of Fraud Detection and National Security
FDU Fraud Detection Unit
ICE Immigration and Customs Enforcement
INA Immigration and Nationality Act
INS Immigration and Naturalization Service
NAO National Audit Office of the United Kingdom
PAS Performance Analysis System
TECS Treasury Enforcement Communication System
USCIS United States Citizenship and Immigration Services
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
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separately.
United States Government Accountability Office Washington, DC 20548
March 10, 2006
The Honorable John N. Hostettler Chairman Subcommittee on Immigration,
Border Security, and Claims Committee on the Judiciary House of
Representatives
The Honorable Charles E. Grassley Chairman Committee on Finance United
States Senate
In fiscal year 2005, over 6 million applications were filed by those
seeking an immigration benefit-the ability of an alien to live and in some
cases work in the United States either permanently or on a temporary
basis. Most immigration benefits can be classified into two major
categories- family-based and employment-based. Family-based applications
are filed by U.S. citizens or permanent resident aliens to establish their
relationships to certain alien relatives such as a spouse, parent, or
minor child who wish to immigrate to the United States. Employment-based
applications include applications filed by employers for aliens to come to
the United States temporarily to work or receive training or for alien
workers to work permanently in the United States. Other immigration
benefits include granting citizenship to resident aliens (called
naturalization), offering asylum to aliens who fear persecution in their
home countries, and authorizing international students to study in the
United States.
U.S. Citizenship and Immigration Services (USCIS) within the Department of
Homeland Security (DHS) is the agency primarily responsible for processing
applications for immigration benefits. The former Immigration and
Naturalization Service (INS) previously had this responsibility, which
USCIS assumed when DHS was created in March 2003. USCIS's staff of
adjudicators process immigration benefits in 4 service centers and 33
district offices around the country. In some cases, applicants may try to
obtain a benefit illegally through fraud. 1 USCIS adjudicators who suspect
fraud are to refer suspicious applications and supporting evidence to
USCIS's Office of Fraud Detection and National Security (FDNS), created in
2003. FDNS staff are responsible for reviewing these potential fraud cases
and determining whether to forward them to DHS's Immigration and Customs
Enforcement (ICE)-which, among other things, is responsible for
investigating violations of immigration law, including immigration benefit
fraud. ICE may or may not decide to initiate a criminal investigation,
depending on the facts in the referral and on workloads and priorities of
its field offices.
DHS, terrorism experts, and federal law enforcement officials familiar
with immigration benefit fraud believe that individuals ineligible for
immigration benefits, including terrorists and criminals, could use
fraudulent means to enter or remain in the United States. In 2002, we
reported that immigration benefit fraud was pervasive and significant and
that INS's approach to immigration benefit fraud was fragmented and
unfocused. 2 A 2005 study by a former 9/11 Commission counsel found that
of the 94 foreign-born terrorists known to operate in the United States
between the early 1990s and 2004, 59 or two-thirds committed immigration
fraud including 6 of the September 11th hijackers. 3 To determine what
actions have been taken since our 2002 report to address immigration
benefit fraud, you asked that we evaluate current anti-fraud efforts. This
report addresses the following questions:
(1)
What do available data and information indicate regarding the
nature and extent of immigration benefit fraud?
(2)
What actions has USCIS taken to improve its ability to detect
immigration benefit fraud?
1
Immigration benefit fraud refers to the willful misrepresentation of
material fact to gain an immigration benefit. It is often facilitated by
document fraud (use of forged, counterfeit, altered or falsely made
documents) and identity fraud (fraudulent use of valid documents or
information belonging to others).
2
GAO, Immigration Benefit Fraud: Focused Approach Is Needed to Address
Problems, GAO-02-66 ( Washington, D.C.: Jan. 31, 2002).
3
See also testimony of Janice Kephart, former counsel, The National
Commission on Terrorist Attacks Upon the United States, before the
Subcommittee on Immigration, Border Security, and Citizenship and the
Subcommittee on Terrorism, Technology, and Homeland Security, Senate
Judiciary Committee, Mar. 14, 2005.
(3) What actions does DHS take to sanction those who commit benefit fraud?
To address these questions, we interviewed responsible officials at and
reviewed relevant documentation obtained from DHS and the Departments of
State, Justice, and Labor. Regarding the nature and extent of immigration
benefit fraud, we analyzed USCIS management data contained in its
Performance Analysis System (PAS), results from two fraud assessments
USCIS had completed before December 2005, information reported by DHS and
the U.S. Attorneys Offices based on investigations and prosecutions of
immigration benefit fraud, and information in fraud bulletins prepared by
one USCIS Service Center. We evaluated the methodology used in USCIS's
fraud assessments and determined that it provided a reasonable basis for
projecting the frequency with which fraud was committed within the time
period from which the samples were drawn. We assessed the data derived
from PAS and determined that these data were sufficiently reliable for the
purposes of this review. Because we selected investigations and
prosecutions to review based upon information that was available, the
information obtained from them is not necessarily representative or
exhaustive of all immigration benefits cases nationwide. Similarly,
information contained in the fraud bulletins is not necessarily
representative of immigration benefit fraud nationwide. To determine how
USCIS detects fraud during the adjudications process and to evaluate these
efforts, we interviewed USCIS headquarters officials and USCIS's FDNS
staff. We also interviewed 59 adjudicators at the 4 USCIS Service Centers
and 2 USCIS district offices with responsibility for and familiarity with
adjudicating different types of applications in a group setting, which
allowed us to identify points of consensus among these adjudicators. In
addition we interviewed ICE Office of Investigations officials from four
ICE field offices. As we did not select probability samples of
adjudicators and ICE Office of Investigations staff to interview, the
results of these interviews may not be projected to the views of all USCIS
adjudicators and ICE Office of Investigations field staff nationwide.
Further, we compared the practices in place to the Standards for Internal
Control in the Federal Government 4 and to guidance from internationally
recognized, leading organizations in fraud control, including the American
Institute of Certified Public Accountants and the United Kingdom's
National Audit Office. To determine what measures
GAO, Standards for Internal Control in the Federal Government,
GAO/AMID-00-21.3.1 (Washington, D.C.: November 1999).
Page 3 GAO-06-259 Immigration Benefits
Results in Brief
DHS has taken to sanction those who commit immigration fraud, we
interviewed knowledgeable officials at USCIS and ICE, examined fraud
investigation and prosecution statistics, and analyzed USCIS statistics
about the amount of fraud identified by its adjudicators. We conducted our
work from October 2004 to December 2005 in accordance with generally
accepted government auditing standards. Appendix I presents more details
about our objectives, scope, and methodology.
Our review of several high-profile immigration benefit fraud cases sheds
light on some aspects of the nature of immigration benefit fraud-
particularly that it is accomplished by submitting fraudulent documents,
that it can be facilitated by white collar and other criminals, and that
it has the potential to result in large profits. Although the full extent
of benefit fraud is not known, available evidence suggests that it is an
ongoing and serious problem. Fraudulent documents submitted included but
were not limited to marriage and birth certificates, financial statements,
business plans, organizational charts, fictitious employee resumes, and
college transcripts. White-collar and other criminals can facilitate
immigration benefit fraud. Individuals who pose a threat to national
security and public safety may seek to enter the United States by
fraudulently obtaining immigration benefits. Moreover, those facilitating
immigration benefit fraud, in some cases, have reaped large profits from
aliens willing to pay thousands of dollars to fraudulently obtain an
immigration benefit. In fiscal year 2005, USCIS denied about 20,000
applications due to fraud. In addition, in 2005, USCIS's new fraud
detection office conducted the first two in a series of planned fraud
assessments-reviews of applications for religious worker and replacement
permanent resident card benefits. Based on the results of the completed
religious worker assessment, which estimated that 33 percent of all
religious worker applications were potentially fraudulent, we project that
about 660 applications-one-third of religious worker applications
submitted over a 6-month period in 2004-may have contained fraudulent
information. Some findings of the religious worker assessment and facts
uncovered during criminal investigations and prosecutions demonstrate that
USCIS adjudicators do not always detect fraud during the adjudications
process, thus allowing applicants to receive benefits for which they were
not eligible. Moreover, USCIS's policy of issuing temporary work
authorization within 90 days to those applicants waiting for their
applications for permanent residency to be decided, although intended to
allow bonafide applicants to work as soon as possible, can be exploited by
aliens filing fraudulent applications with the intent of receiving the
temporary work authorization for which they would otherwise be ineligible.
These aliens can then use the temporary work authorization to obtain other
official documents, such as drivers' licenses. Based on an estimate from
the DHS Office of Immigration Statistics that about 85 percent of
applicants who apply for permanent residency also apply for temporary work
authorization, the Citizenship and Immigration Services Ombudsman contends
that many aliens who filed a fraudulent claim for permanent residency may
have received temporary work authorization.
To help it detect immigration benefit fraud, USCIS established FDNS as its
focal point for dealing with immigration benefit fraud, outlined a
strategy for detecting immigration benefit fraud, and is undertaking a
series of risk assessments to identify the extent and nature of fraud for
certain immigration benefits. However, USCIS has not yet implemented some
aspects of internal control standards established by GAO and fraud control
best practices identified by leading audit organizations that could
further enhance its ability to detect fraud. Specifically, USCIS's new
fraud detection office is in the initial stages of implementing a fraud
assessment program, which examines the extent and nature of fraud
associated with the immigration category being assessed. However, this
program, as currently implemented, does not provide a basis for the type
of comprehensive risk analysis we advocate. First, USCIS current
assessment plan does not include risk assessment of the majority of major
immigration benefit categories-for example, temporary work authorization.
Additionally, it focuses primarily on determining the fraud rate for
selected immigration applications and identifying procedural
vulnerabilities, for example, not routinely verifying the existence of
churches associated with religious work applications. It does not draw on
all available sources of strategic threat information to assess threats,
such as ICE's Office of Intelligence, nor does it assess the consequences
of granting a benefit to the wrong person-for example some benefits
facilitate access to critical infrastructure while others do not. More
comprehensive information about vulnerabilities, threats, and consequences
as part of its fraud assessments would allow USCIS to identify those
benefits that represent the highest risk and practice riskbased decision
making in its efforts to balance fraud detection with other organizational
priorities like reducing backlogs and improving customer service. In
addition, USCIS also lacks a mechanism to help ensure that information
gathered during the course of its normal operations and those of related
operations-including criminal investigations and prosecutions-inform
decisions about whether and what actions, including changes to policies,
procedures, or programmatic activities, might improve the ability to
detect fraud. Moreover, adjudicators we interviewed reported that
communication from management did not clearly communicate to them the
importance of fraud control; rather, it emphasized meeting production
goals, designed to reduce the backlog of applications, almost exclusively.
These adjudicators shared, for example, memos from different parts of the
agency, which they told us sent conflicting messages about how they were
to balance, during the course of their duties, fraud-prevention objectives
with service-related objectives. USCIS headquarters operations management
told us that the adjudications operations is a "high-pressure" production
environment and that they are seeking to increase production, but it was
not their intention that this should come at the expense of making
incorrect adjudication decisions. Also, our interviews with adjudicators
indicated that they have limited access to some tools that could support
their fraud detection ability such as external databases for verifying
applicant information. Interviews with USCIS staff also indicated that
adjudicators may not always receive relevant information that could
support their efforts to detect fraud, and although some information is
provided, it is not always provided in a form that adjudicators can
reasonably manage as, for example, in an electronic database. Finally,
USCIS has not established performance goals- measures and targets-to
assess its benefit fraud activities.
DHS does not have a strategy for sanctioning fraud or for evaluating the
effectiveness of sanctions. Best practice guidance issued by the United
Kingdom's National Audit Office, for example, suggests that a strategy for
sanctioning fraud, along with a mechanism for evaluating the effectiveness
of sanctions is central to a good fraud control environment. Data provided
by USCIS indicates that in fiscal year 2005 most immigration fraud
detected by USCIS did not result in ICE criminal investigations and
subsequent prosecutions. Since most fraud is not criminally prosecuted,
the principal means of sanctioning it would be administrative penalties.
The Immigration and Nationality Act does provide the authority to levy
administrative penalties; however, DHS does not currently use this
authority. This is largely because a 1998 federal court ruling enjoined
INS from implementing certain administrative penalties for document fraud
until it revised certain forms to provide adequate notice to aliens of the
immigration consequences of waiving the opportunity to challenge document
fraud fines. Although DHS has not conducted a formal costbenefit analysis,
according to ICE officials responsible for pursuing administrative
penalties, these penalties are not cost-effective because the fines are
less than the costs to impose them when a hearing is requested.
Accordingly, DHS has not made updating the forms to allow sanctions to be
administered in compliance with the court ruling a priority. Nevertheless,
according to USCIS officials, an effective administrative sanctions
program is important to its fraud deterrence efforts. The lack of a clear
strategy for how and when to punish fraud perpetrators, which considers
the nonfinancial benefit of deterrence and includes a mechanism for
evaluating effectiveness, limits DHS's ability to project a convincing
message that those who commit fraud face a credible threat of punishment
in one form or another.
In order to enhance USCIS's ability to detect immigration benefit fraud,
we are recommending that the Secretary of Homeland Security direct the
Director of USCIS to adopt additional internal controls and best practices
to strengthen USCIS's fraud control environment, particularly by (1)
expanding the scope of its current fraud assessment program and using a
more comprehensive risk management approach; (2) establishing a mechanism
to ensure that information uncovered during USCIS's and related agencies'
normal operations feeds back into evaluations of USCIS's policies,
procedures, and operations; (3) clearly communicating to adjudications
staff the importance of both fraud prevention-related and service-related
objectives, and how these objectives are to be balanced by adjudicators as
they carry out their duties; (4) providing USCIS staff with access to
information and tools from relevant internal and external sources; and (5)
establishing outcome and output based performance goals that reflect the
status of fraud control efforts. In addition, in order to enhance DHS's
ability to sanction immigration benefit fraud, we recommend that the
Secretary of Homeland Security direct the Director of USCIS and the
Assistant Secretary of ICE to develop a strategy for sanctioning
immigration benefit fraud that takes into account the value of deterrence
and establishes a mechanism for evaluating effectiveness.
We presented a draft of this report to DHS and the Departments of State,
Justice, and Labor. State, Justice, and Labor had no comments on our
report. DHS stated that our report generally provided a good overview of
the complexities associated with pursing immigration benefit fraud and the
need to have a program in place that proactively assesses vulnerabilities
within the myriad of immigration processes. However, DHS stated that our
report did not fully portray USCIS's efforts to address immigration
benefit fraud and provided other examples of efforts USCIS has undertaken
or plans to undertake. Where appropriate, we revised the draft report to
recognize these additional efforts by USCIS. DHS generally agreed with and
plans to take action to implement four of our six recommendations and
cited actions it has already taken to address our other two
recommendations. DHS agreed on the need to expand its fraud assessment
program, provide USCIS staff access to information from internal and
external sources, and establish outcome and output performance based
goals. DHS agreed that goals were needed but did not
Background
specify what action(s) it was planning to take. DHS agreed to study the
costs and benefits of an administrative sanctions program. DHS stated that
a mechanism to ensure that information uncovered during USCIS's and
related agencies normal operations feeds back into evaluations of USCIS's
policies, procedures, and operations already exists. DHS cited examples of
how FDNS shares information with other agencies, participates in
interagency anti-fraud effort efforts, and has recommended changes to how
USCIS adjudicates religious worker applications as evidence that such
feedback takes place. Although these are all positive efforts, USCIS does
not yet have policies and procedures that specify how information about
fraud vulnerabilities uncovered during the course of normal operations- by
USCIS and related agencies-is to be gathered-from which internal and
external sources-and the process for evaluating this information and
making decisions about appropriate corrective actions. Therefore, we
continue to believe that USCIS needs to institutionalize through policies
and procedures a feedback mechanism. With respect to communicating clearly
the importance of USCIS's fraud prevention objectives, DHS stated that
USCIS leadership clearly advocates balancing objectives related to timely
and quality processing of immigration benefits, and cited the creation of
FDNS as evidence that USCIS senior leadership believes national security
and fraud detection are a high priority. However, our interviews with
adjudicators indicate that this message may not be reaching USCIS
adjudications staff. DHS disagreed with our recommendation that USCIS and
ICE establish a mechanism for the sharing of information related to the
status and outcomes of USCIS fraud referrals to ICE. DHS provided us a
February 2006 memorandum of agreement between ICE and USCIS that
establishes a mechanism for the sharing of information related to the
status and outcomes of fraud referrals; therefore, we withdrew this
recommendation.
USCIS is responsible for processing millions of immigration benefit
applications received each year for various types of immigration benefits,
determining whether applicants are eligible to receive immigration
benefits, and detecting suspicious information and evidence to refer for
fraud investigation and possible sanctioning by other components or
agencies. USCIS processes applications for about 50 types of immigration
benefits. In fiscal year 2005, USCIS received about 6.3 million
applications and adjudicated about 7.5 million applications. Figure 1
shows the percentage of applications completed by type of application in
fiscal year 2005.
Figure 1: USCIS Applications Completed in Fiscal Year 2005
Employment authorization
Nonimmigrant worker
Travel document
Naturalization
Permanent resident
Spouse & family
Replacement/renewal of permanent resident card
Other application types
Source: GAO analysis of USCIS Performance AnalysisSystem (PAS) data.
To process these immigration benefit applications, in fiscal year 2005
USCIS had a staff of about 3,000 permanent adjudicators located in 4
service centers, where most applications are processed, and 33 district
offices. 5 In fiscal year 2004, for example, service centers adjudicated
about 67 percent of all applications, and districts about 33 percent. In
general, service centers adjudicate applications that do not require an
interview with the applicant, using the evidence submitted with the
applications. District offices generally adjudicate applications where
USCIS requires an interview with the applicant (e.g., naturalization).
USCIS also has eight offices that process applications for asylum in the
United States. In fiscal year 2005, USCIS's budget amounted to just under
$1.8 billion, of which about $1.6 billion was expected from service fees
and $160 million from congressionally appropriated funds.
USCIS also employed an additional 1,475 adjudicators on a temporary basis
to support its backlog reductions efforts.
Page 9 GAO-06-259 Immigration Benefits
In fiscal year 2004, USCIS had a backlog of several million applications
and has developed a plan to eliminate it by the end of fiscal year 2006. 6
In June 2004, USCIS reported that it would have to increase production by
about 20 percent to achieve its goal of adjudicating all applications
within 6 months or less by the end of fiscal year 2005. At that time, it
estimated that it would have to increase current annual processing from
about 6 million to 7.2 million applications. Since USCIS did not plan for
further increases in staffing levels, reaching its backlog goal would
require some reduction in average application processing times, overtime
hours, and adjudicator reassignments.
With the creation of DHS in 2003, the immigration services and enforcement
functions of the former INS transitioned to different organizations within
DHS. USCIS assumed the immigration benefit functions and ICE assumed INS's
investigative and detention and removal of aliens functions. Within ICE's
Office of Investigations, the Identity and Benefit Fraud unit now conducts
immigration benefit fraud criminal investigations and ICE's Office of
Detention and Removal Operations is responsible for identifying and
removing aliens illegally in the United States.
Because the immigration service and enforcement functions are now handled
by separate DHS components, these components created two new units to,
among other things, help coordinate the referral of suspected immigration
benefit fraud uncovered by adjudicators to ICE's Office of Investigations.
First, USCIS created FDNS in 2003 to, among other things, receive fraud
leads from adjudicators and determine which leads should be referred to
ICE's Office of Investigations. To accomplish this task, FDNS has Fraud
Detection Units (FDU) at all four USCIS service centers and the National
Benefits Center. 7 When fraud is suspected, the applications are to be
referred FDUs. The FDUs, comprised of Intelligence Research Specialists
and assistants, are responsible for further developing suspected
immigration fraud referrals to decide which leads should be referred to
ICE for possible investigation. FDU staff are also to refer to
6
See GAO, Immigration Benefits: Improvements Needed to Address Backlogs and
Ensure Quality of Adjudications, GAO-06-20 (Washington D.C.: November
2005).
7
The National Benefits Center serves as a hub for applications adjudicated
at USCIS field offices. Among other things, the center performs initial
evidence review and conducts background checks before sending the file to
the appropriate district office for adjudication.
Page 10 GAO-06-259 Immigration Benefits
ICE or other federal agencies applicants who may pose a threat to national
security or public safety or who are potentially deportable. FDUs are
responsible for following up on potential national security risks
identified during background checks of immigration benefit applicants.
FDUs also perform intelligence analysis to identify immigration fraud
patterns and major fraud schemes. In addition to establishing FDUs, in
January 2005 FDNS assigned 100 new Immigration Officers to USCIS district
offices, service centers, and asylum offices to work directly with
adjudicators to handle fraud referrals and conduct limited field
inquiries. Second, ICE's Office of Investigations created four new Benefit
Fraud Units (BFU) in Vermont, Texas, Nebraska, and California located
either at or near the four USCIS service centers. The ICE BFUs are
responsible for reviewing, assessing, developing, and when appropriate,
referring to ICE field offices for possible investigation immigration
fraud leads and other public safety leads received from the FDUs and
elsewhere. Specifically, the ICE BFUs are intended to identify those
referrals that they believe warrant investigation, such as organizations
and facilitators engaged in large-scale schemes or individuals who pose a
threat to national security or public safety, and refer them to ICE field
offices. In turn, ICE field offices will investigate and refer those cases
they believe warrant prosecution to the
U.S. Attorneys Offices. Figure 2 illustrates the typical immigration
benefit fraud referral and coordination process.
Figure 2: Immigration Benefit Fraud Detection and Referral Process
Immigration Benefit Fraud Detection & Referral Process
DHS DOJ
Accepts fraud referralsbased on individual SAC prioritiesand overall ICE
goals
Performs field investigation and enforcement action
Source: USCIS.
The Homeland Security Act of 2002 created the office of the Citizenship
and Immigration Services Ombudsman. The ombudsman's primary function is
to: assist individuals and employers in resolving problems with USCIS;
identify areas in which individuals and employers have problems in dealing
with USCIS; and propose changes in the administrative practices of USCIS
in an effort to mitigate problems. The ombudsman has issued two annual
reports that have highlighted issues related to prolonged processing
times, limited case status information, immigration benefit fraud,
insufficient standardization in processing, and inadequate information
technology and facilities.
Other federal agencies also play important roles in the immigration
benefit application process. The Department of State is responsible for
approving
Fraud Is A Serious Problem, But Its Full Extent Is Unknown
and issuing a visa allowing an alien to travel to the United States. The
Department of Labor's (DOL) Division of Foreign Labor Certification
provides national leadership and policy guidance to carry out the
responsibilities of the Secretary of Labor under the Immigration and
Nationality Act (INA) concerning foreign workers seeking admission to the
United States for employment. DOL provides certifications for foreign
workers to work in the United States, on a permanent or temporary basis,
when there are insufficient qualified U.S. workers available to perform
the work at wages that meet or exceed the prevailing wage for the
occupation in the area of intended employment. The DOL Office of the
Inspector General's Office of Labor Racketeering and Fraud Investigations
is responsible for investigating fraud related to these labor
certifications.
Fraudulent schemes used in several high-profile immigration benefit fraud
cases sheds light on some aspects of the nature of immigration benefit
fraud-particularly that it is accomplished by submitting fraudulent
documents, that it can be committed by organized white-collar and other
criminals, and that it has the potential to result in large profits for
these criminals. The benefit fraud cases we reviewed involved individuals
attempting to obtain benefits for which they were not eligible by
submitting fraudulent documents or making false claims as evidence to
support their applications. Fraudulent documents submitted included but
were not limited to birth and marriage certificates, tax returns,
financial statements, business plans, organizational charts, fictitious
employee resumes, and college transcripts. For example, in what ICE
characterized as one of the largest marriage fraud investigations ever
undertaken, 44 individuals were indicted in November 2005 for their
alleged role in an elaborate scheme to obtain fraudulent immigrant visas
for hundreds of Chinese and Vietnamese nationals. According to a USCIS
fraud bulletin, this scheme may have been ongoing for 10 years. Another
major investigation revealed evidence that an attorney had filed about 350
applications on behalf of aliens seeking permanent employment as religious
workers at religious institutions in the United States. Investigators
found evidence that most of these aliens were unskilled laborers who were
not pastors or other religious workers and had little or no previous
affiliation with the religious institution. According to this
investigation, some religious institutions appeared to specialize in
obtaining legal status for aliens in the country who were not eligible for
religious worker immigration benefits. In another investigation involving
at least 2,800 apparently fraudulent marriage and fiancee applications
identified in 2002 and investigated through 2004, a U.S. citizen appeared
to have submitted multiple applications with as many as 11 different
spouses.
One USCIS Service Center prepared fraud bulletins using information from
various State Department Consular posts overseas describing immigration
fraud uncovered by these posts. Our analysis of the bulletins issued from
July 2004 through December 2004 prepared by USCIS's California Service
Center revealed that aliens from 23 different countries were believed to
have sought a variety of immigration benefits fraudulently. For example,
individuals apparently sought to enter the United States through fraud by
falsely claiming they were: (1) legitimately married to or a fiance of a
U.S. citizen; (2) a religious worker; (3) a performer in an entertainment
group;
(4)
a person with extraordinary abilities, such as an artist, race car
driver, or award winning photographer; (5) an executive with a
foreign company;
(6)
a child or other relative of a citizen or permanent resident; or
(7) a domestic employee of an alien legally in the United States,
such as a diplomat or business executive. According to one of the
bulletins, in one case State Department consular officers
suspected illegal aliens were entering the United States under the
guise of membership in a band. According to another bulletin, two
individuals were suspected of smuggling children into the United
States. In this case, the alleged parents submitted a
non-immigrant visa application for their "daughter," and provided
a fraudulent birth certificate and passport for her. The "parents"
eventually admitted to taking children to the United States as
their own to reunite them with their illegally working family
members.
Some individuals seeking immigration benefits pose a threat to national
security and public safety, and white collar and other criminals sometimes
facilitate immigration benefit fraud. For example, according to FDNS, each
year about 5,200 immigration benefit applicants are identified as
potential national security risks, because their personal information
matches information contained in U.S. Customs and Border Protection's
Interagency Border Inspection System, a database of immigration law
violators and people of national security interest. Additionally,
according to federal prosecutors, immigration benefit fraud may involve
other criminal activity, such as income tax evasion, money laundering,
production of fraudulent documents, and conspiracy. Also, organized crime
groups have used sophisticated immigration fraud schemes, such as creating
shell companies, to bring in aliens ostensibly as employees of these
companies. In addition, a number of individuals linked to a hostile
foreign power's intelligence service were found to have been employed as
temporary alien workers on military research.
Investigations have revealed that perpetrating fraud on behalf of aliens
can be a profitable enterprise. For instance, in 2003 and 2004, one USCIS
service center identified about 2,800 apparently fraudulent marriage
applications between low-income U.S. citizens and foreign nationals from
an Asian country. The U.S. citizens appeared to have been paid between
$5,000 and $10,000 for participating in the marriage fraud scheme. In
another example from an investigation by DOL's Inspector General, to
fraudulently obtain the labor certifications needed to work in the United
States, at least 900 aliens allegedly paid a recruitment firm an average
of $35,000, with some aliens paying as much as $90,000, resulting in at
least $31 million in revenue for this firm. In one of the largest labor
certification fraud schemes ever uncovered, federal investigators found
evidence that a prominent immigration attorney in the Washington, D.C.,
area submitted at least 1,436 and perhaps as many as 2,700 fraudulent
employment applications between 1998 and 2002. According to the sworn
testimony of a DOL special agent, this attorney and his associates are
alleged to have made at least $11.4 million for the 1,400 applications
that the agent reviewed, in all of which he found evidence of fraud, and
perhaps as much as $21.6 million if all 2,700 applications were
fraudulent, as he strongly suspected. In another case, an attorney
allegedly charged aliens between $8,000 and $30,000 to fraudulently obtain
employment-based visas to work in more than 200 businesses that included
pizza parlors, auto parts stores, and medical clinics.
Although the full extent of immigration benefit fraud is unknown,
available USCIS data indicate that it is a serious problem. According to
USCIS PAS data, in fiscal year 2005, USCIS denied just over 20,000
applications because USCIS staff detected fraudulent application
information or supporting evidence during the course of adjudicating the
benefit request. Three application categories accounted for more than
three-quarters of the fraud denials: temporary work authorization (36
percent), application for permanent residency (30 percent), and
application for a spouse to immigrate (14 percent). These three
application types also accounted for almost half of all applications
adjudicated by USCIS in fiscal year 2005. Moreover, in fiscal year 2005,
USCIS denied approximately 800,000 applications for other reasons, such as
ineligibility for the benefit sought or failure to respond to information
requests. USCIS adjudications staff and officials told us that it is
likely that some of these applications denied for other reasons also
involved fraud.
Information provided by State Department and DOL officials also indicates
that fraud is a serious problem. Once USCIS approves a sponsor's
application on behalf of an alien to immigrate, the application is sent to
the State Department's National Visa Center, which forwards the
application to the appropriate State Department overseas consulate post,
which then interviews the alien to determine whether a visa should be
issued. According to National Visa Center officials, out of 2,400
applications returned on average each month to USCIS by the National Visa
Center, that are denied or withdrawn for various reasons, about 900
involve fraud or suspected fraud as determined by consular officers
overseas. When the DOL Inspector General audited labor certification
applications filed in 2001, it also found indications of a significant
amount of fraud. According to the Inspector General, of the approximate
214,000 applications filed from January 1, 2001, through April 30, 2001,
and not subsequently cancelled or withdrawn, 54 percent (about 130,000)
contained false-possibly fraudulent-information. 8
In June 2005, the FDNS completed the first in a series of fraud
assessments. The results from this assessment of religious worker
applications indicate that about 33 percent of the 220 sampled
applications resulted in a preliminary finding of potential fraud. 9 Based
on a 33 percent rate, we estimate that, during the 6-month period of
fiscal year 2004 from which the sample was drawn, about 660 out of
approximately 2,000 applications may have been fraudulent. 10 Of the 72
potential fraud cases discovered in the fraud assessment, about 54-percent
(39 cases) showed evidence of tampering or fabrication of supporting
documents; 44-percent (32 cases) of the petitioners' addresses did not
reveal a bona fide religious institution; about 42-percent (30 cases) may
have misrepresented the beneficiaries' qualifications; and 28-percent (20
cases) did not provide the salary noted in the application. The assessment
also uncovered one case where law enforcement had identified an applicant
as a suspected terrorist.
Information from other investigations and prosecutions of benefit fraud
also reveal that, in some cases, applicants may have submitted fraudulent
8
DOL Inspector General, Restoring Section 245(i) of the Immigration
Nationality Act Created a Flood of Poor Quality Foreign Labor
Certification Applications Predominantly for Aliens Without Legal Work
Status, Report No: 6-04-004-03-321 (Washington, D.C. : Sept. 30, 2004).
9
USCIS reviewed applications submitted on behalf of religious workers-such
as ministers, or other individuals who work in a professional capacity in
a religious vocation or occupation-seeking an immigrant visa in order to
work in the United States. FDNS chose this application because based upon
past experience FDNS believed there was a high prevalence of fraud.
According to FDNS, most of the fraud involved religious institutions that
were not affiliated with a major religious organization.
10
However, with a sampling margin of error of 5 percent, the fraud rate
could be between 28 percent and 38 percent.
documents and made false statements that were not detected before the
applicant obtained an immigration benefit. For example, while
investigating one fraud scheme, investigators identified more than 2,000
apparently fraudulent applications where there was evidence that some
aliens, fraudulently claiming to be managers and executives of foreign
companies with U.S. affiliates, acquired benefits that granted them the
ability to work in the United States. To execute this scheme, organizers
allegedly prepared application packages that included fraudulent business
and employee related documents including financial statements, business
plans, organizational charts, and fictitious employee resumes.
One joint law enforcement investigation, previously mentioned, uncovered
evidence that an attorney and his associate had filed at least 1,436
applications on behalf of legitimate companies-mostly local
restaurants-that did not actually request these workers. In this case
there was evidence that they forged the signatures of company management
on the applications. Another investigation involving marriage fraud found
evidence that U.S. citizens were recruited and paid to marry Vietnamese
nationals. The fraud organizers appeared to have assisted the U.S.
citizens in obtaining their passports, scheduled travel arrangements, and
escorted them to Vietnam where they arranged introductions with Vietnamese
nationals whom the citizens then married. These citizens then filed
applications that facilitated these Vietnamese nationals' entry into the
United States as spouses even though it appeared that they did not intend
to live together as husband and wife.
Even when adjudicators rejected applications based on fraud, some of these
applicants had already received interim benefits while their applications
were pending final adjudication allowing them to live and work in the
United States, and in some cases obtain other official documents, such as
a driver's license. Under current USCIS policy, for example, if USCIS
cannot adjudicate an application for permanent residency and the
accompanying application for work authorization within 90 days, the
applicant is entitled to an interim work authorization, an interim benefit
designed to let applicants work while awaiting a decision regarding
permanent residency. 11 According to the Citizenship and Immigration
Services Ombudsman's fiscal year 2004 and 2005 annual
8 C.F.R. S: 274a.13(d). 8 CFR S: 274a.12(c) states that USCIS has the
discretion to establish a specific validity period for an employment
authorization document, and 8 C.F.R. S: 274a.13(d) provides that such
period shall not exceed 240 days in the case of an interim authorization.
Page 17 GAO-06-259 Immigration Benefits
reports and our discussion with him, for many individuals the primary goal
is to obtain temporary work authorization regardless of the validity of
their application for permanent residency. That is, aliens can apply for
temporary work authorization, knowing that they do not qualify for
permanent residency, with the intent of exploiting the system to gain work
authorization under false pretenses.
Once a temporary work authorization is fraudulently obtained, an alien can
use it to obtain other valid identity documents such as a temporary social
security card and a driver's license, thus facilitating their living and
working in the United States. According to the FDNS Director, once such
fraud scheme involved at least 2,500 individuals in Florida who allegedly
filed frivolous applications for employment authorization and then used
the receipt, showing they had filed an application, to obtain Florida
State driver's licenses or identification cards. 12 ICE agents we
interviewed also said that they suspected that many individuals apply for
permanent residency fraudulently simply to obtain a valid temporary work
authorization document. The interim benefit remains valid until it expires
or until it is revoked by USCIS.
In his 2005 report, the Ombudsman cites a DHS Office of Immigration
Statistics estimate-which the ombudsman's office confirmed with USCIS's
division of performance management-that about 85 percent of applicants for
permanent residency also apply for temporary work authorization. As a
result, according to the ombudsman, many aliens have received temporary
work authorizations, for which they were later found to be ineligible. Our
analysis of PAS data shows, for example, that from fiscal year 2000
through 2004, USCIS denied 26,745 applications due to fraud out of the
approximately 3 million applications received for permanent residency.
These data illustrate that, if aliens that filed fraudulent applications
for permanent residency also requested temporary work authorization at a
rate consistent with the 85 percent cited by the Office of Immigration
Statistics, then thousands of aliens received temporary work authorization
based on their fraudulent claims for permanent residency during fiscal
year 2000 through 2004.
USCIS subsequently informed Florida's Department of Highway Safety and
Motor Vehicles, and the American Association of Motor Vehicles
Administration issued a national advisory notifying other state motor
vehicle departments that they should not accept the application receipt as
evidence of lawful immigration status.
Page 18 GAO-06-259 Immigration Benefits
Although USCIS Has Taken Steps to promote Fraud Control, Additional Controls
and Best Practices Could Improve Its Ability to Detect Fraud
To help it detect immigration benefit fraud, USCIS has taken some
important actions consistent with activities prescribed by the Standards
for Internal Control in the Federal Government and with recognized best
practices in fraud control. Specifically, it has established an internal
unit to act as its focal point for addressing immigration benefit fraud,
outlined a strategy for detecting immigration benefit fraud, and is
undertaking a series of fraud assessments to identify the extent and
nature of fraud for certain immigration benefits. However, USCIS has not
applied some aspects of internal control standards and fraud control best
practices that could further enhance its ability to detect fraud.
Internal Control Standards and Other Guidance Provide Direction for
Establishing Good Fraud Control Practices
The Standards for Internal Control in the Federal Government provide an
overall framework to identify and address, among other things fraud,
waste, abuse, and mismanagement. Implementing good internal control
activities and establishing a positive control environment is central to
an agency's efforts to detect and deter immigration benefit fraud. The
standards address various aspects of internal control that should be
continuous, built-in components of organizational operations, including
the control environment, risk assessment, control activities, information
and communications, and monitoring.
As with work we have previously published related to managing improper
payments, fraud control would typically require a continual interaction
among these components in keeping with an agency's various objectives. 13
For example, internal controls that promote ongoing monitoring work
together with risk assessment controls to provide a foundation for
decision making. Also, as internal control standards advise, a
precondition to risk assessment is the establishment of clear, consistent
agency objectives. Once established, risk assessment controls must also
work together with information and communication controls to ensure that
that every level of the agency is cognizant of the commitment and approach
to both controlling fraud and meeting other agency objectives. Similarly,
conditions governing risk change frequently, and periodic updates are
required to ensure that risk information-including threats,
vulnerabilities, and consequences-stays current and relevant. Information
collected
13
GAO, Strategies to Manage Improper Payments, Learning from Private Sector
Organizations, GAO-02-69G ( Washington, D.C.: October 2001).
Page 19 GAO-06-259 Immigration Benefits
through periodic assessment, as well as daily operations can inform the
assessment, and particularly, the analysis of risk. As shown in figure 3,
the control environment surrounds and reinforces the other components, but
all components work in concert toward a central objective, which, in this
case, is to minimize immigration benefit fraud.
Figure3: Internal Control Environment
Source: GAO.
Other audit organizations have published guidance that includes discussion
of sound management practices for controlling fraud that complement the
internal control standards. Among these are the American Institute of
Certified Public Accountants (AICPA) guidance on management of antifraud
programs and controls to help prevent and deter fraud 14 and a fraud
control practices guide developed by the United Kingdom's National Audit
Office (NAO) entitled "Good Practices in Tackling External Fraud." The NAO
guidance outlines a risk-based
Excerpt from Statement on Auditing Standards, No. 99, Considerations of
Fraud in a Financial Statement Audit.
Page 20 GAO-06-259 Immigration Benefits
Consistent with Internal Control Standards and Fraud Control Best Practices,
USCIS Has Established a Fraud Focal Point, Related Strategies, and a Fraud
Assessment Program
strategic approach to combating fraud that also includes evaluating the
effectiveness of sanctions.
According to internal control standards, factors leading to a positive
control environment include clearly defining key areas of authority and
responsibility, establishing appropriate lines of reporting, and
appropriately delegating authority and responsibility for operating
activities. Similarly, the NAO fraud control guidance advises agencies to
develop specific strategies to coordinate their fraud control efforts and
to ensure that someone is fully responsible for implementing the plans in
the way intended and that sufficient resources are in place. Consistent
with internal control and best practice guidance, USCIS established the
FDNS office to enhance its fraud control efforts by serving as its focal
point for addressing immigration benefit fraud.
Established in 2003, FDNS is intended to combat fraud and foster a
positive control environment by pursuing the following objectives:
* develop, coordinate, and lead the national antifraud operations for
USCIS;
* o oversee and enhance policies and procedures pertaining to the
enforcement of law enforcement background checks on those applying
for immigration benefits;
o identify and evaluate vulnerabilities in the various policies,
practices and procedures that threaten the legal immigration process;
o recommend solutions and internal controls to address these
vulnerabilities; and
o act as the primary USCIS conduit and liaison with ICE, U.S. Customs
and Border Protection (CBP), and other members of the law enforcement
and intelligence community.
In September 2003, in support of its objectives, FDNS outlined a strategy
for detecting immigration benefit fraud in USCIS's National Benefit Fraud
Strategy. According to the strategy, because most immigration benefit
fraud begins with the filing of an application, a sound approach to fraud
prevention begins at the earliest point in the process-the time an
application is received. Accordingly, USCIS established FDNS Fraud
Detection Units (FDU) in each of the service centers in order to help
identify potential fraud and process adjudicator referrals. Subsequently,
FDNS appointed staff to serve as Immigration Officers working directly
with adjudicators at the service centers and district offices to identify
potential fraud and, to some extent, verify fraud through administrative
inquiries-once it was determined that ICE had declined to investigate a
referral-in order to assist adjudicators in making eligibility
determinations.
The strategy also discusses various technological tools to help the FDUs
detect fraud early in the process-in particular, by enabling FDNS staff to
check databases to confirm applicant information and by developing new
automated tools to analyze application system data using known fraud
indicators and patterns to help identify potential cases of fraud. USCIS
has hired a contractor to develop for FDNS an automated capability to
screen incoming applications against known fraud indicators, such as
multiple applications received from the same person. According to FDNS, it
plans to deploy an initial data analysis capability by the third quarter
of fiscal year 2006 and release additional data analyses capabilities at
later dates, but could not predict when these latter capabilities would be
achieved. However, according to an FDNS operations manager, the near and
midterm plans are not aimed at providing a full data mining capability. In
the long term, USCIS plans to integrate these data analyses tools for
fraud detection into a new application management system being developed
as part of USCIS's efforts to transform its business processes for
adjudicating immigration benefits, which includes developing the
information technology needed to support these business processes. Also,
in the long term, according to the FDNS Director, a new USCIS application
management system would ideally include fraud filters to screen
applications and remove suspicious applications from the processing stream
before they are seen by adjudicators.
FDNS has adopted as one of its objectives the identification and
evaluation of vulnerabilities in USCIS policies, practices, and procedures
that threaten the immigration benefit process. Consistent with this
objective and good internal control practices, in February 2005, FDNS
began to conduct a series of fraud assessments aimed at determining the
extent and nature (i.e., how it is committed) of fraud for several
immigration benefits that FDNS staff determined, based on past studies and
experience, benefit fraud may be a problem. To conduct these assessments,
FDNS first selected a statistically valid sample of applications. 15 FDNS
field staff then attempted to verify whether key
For each of assessment, USCIS plans to review a sample of applications
designed to achieve a 95 percent confidence interval. Reviews will be
conducted by Immigration Officers in district offices.
Page 22 GAO-06-259 Immigration Benefits
Additional Internal Controls and Use of Other Best Practices Could Further
Improve USCIS's Ability to Detect Benefit Fraud
USCIS Has Not Adopted a Comprehensive Risk Management Approach to Help
Guide Its Fraud Control Efforts
information on the applications was true. They did this by doing such
things as comparing information contained in benefit applications with
information in USCIS data systems and law enforcement and commercial
databases, conducting interviews with applicants, and, in some cases,
visiting locations to verify, for example, whether a business actually
existed. As of December 2005, FDNS had completed its assessment of the
religious worker application and replacement of permanent resident card
applications, and was in the process of completing the assessment of two
immigrant worker application subcategories. 16 As of December 2005, FDNS
planned to initiate two other assessments in January 2006 and another at a
later time. 17
Although USCIS has taken some important steps consistent with internal
control standards and other good fraud control practices, it has not yet
implemented some aspects of internal control standards and fraud control
best practices that could further enhance its ability to detect fraud.
Specifically, it lacks (1) a comprehensive approach for managing risk, (2)
a monitoring mechanism to ensure that knowledge arising from routine
operations informs the assessment of policies and procedures, (3) clear
communication regarding how to balance multiple agency objectives, (4) a
mechanism to help ensure that adjudicators staff have access to important
information, and (5) performance goals related to fraud prevention.
Although FDNS has initiated a fraud assessment program that identifies
vulnerabilities for the specific benefit being assessed, it does not
employ a comprehensive risk management approach to help guide its fraud
control efforts. That is, FDNS has not (1) developed a plan for assessing
the majority of benefits that USCIS administers, (2) fully incorporated
threat and consequence information as part of the assessment process, and
(3) applied a risk-based approach to evaluating alternatives for
mitigating identified vulnerabilities.
16
For the religious worker assessment, USCIS staff reviewed a sample of 220
cases that were randomly selected from a 6-month period of April 1, 2004,
to September 30, 2004. For the replacement of permanent resident card
assessment, USCIS staff reviewed a sample of 245 cases that were selected
from a 6-month period of May 1, 2004, to October 31, 2004. Cases selected
included pending and completed cases.
17
USCIS asked that we not divulge the specific benefit types planned for
future assessments because of concerns that publishing this information
could jeopardize the validity of these future assessments.
A central component of the Standards for Internal Control in the Federal
Government is risk assessment, which includes identifying and analyzing
risks that agencies face from internal and external sources and deciding
what actions should be taken to manage these risks. NAO's fraud control
guide also advises that in the fraud context, risk assessment involves
such things as assessing the size of the threat from external fraud, the
areas most vulnerable to fraud, and the characteristics of those who
commit fraud. Moreover, we have consistently advocated a model of risk
management that takes place in the context of clearly articulated goals
and objectives and includes comprehensive assessments of threats,
vulnerabilities, and consequences to help agencies evaluate and select
among alternatives for mitigating risk in light of the potential for a
given activity to be effective, the related cost of implementing the
activity, and other relevant management concerns (including its impact on
other agency objectives). 18
FDNS fraud assessments are an initial step toward adopting a risk
management approach. However, FDNS has no specific plans to assess the
majority of the benefit types that it administers. FDNS's current plan
calls for assessing benefit types that represent only about 25 percent of
the applications USCIS received in fiscal year 2004, for example, and do
not include benefits like temporary work authorization which accounted for
almost 30 percent of applications received in 2004, and which the CIS
Ombudsman suspects may be a high risk for fraud, and for which PAS data
show a high denial rate for fraud. FDNS officials told us that, although
the fraud assessments have been valuable, they have taken more time and
effort than originally planned. Likewise, FDNS has not established a
strategy and methodology for prioritizing any future fraud assessments.
Until it extends the assessments to additional benefit types, the fraud
assessments offer only limited information about vulnerabilities to the
immigration benefits system
Moreover, the approach to risk management that we advocate calls for the
assessment of threats and consequences, in addition to the vulnerability
information provided by the current approach to fraud assessment.
Currently, the fraud assessments do not incorporate a comprehensive
See, for example, GAO, Homeland Security: A Risk Management Approach Can
Guide Preparedness Efforts , GAO-02-208T (Washington, D.C.: October 2001);
and GAO, Risk Management: Further Refinements Needed to Assess Risks and
Prioritize Protective Measures at Ports and Other Critical Infrastructure,
GAO-06-91 (Washington, D.C.: December 2005).
Page 24 GAO-06-259 Immigration Benefits
threat assessment-that is, they do not draw on all available sources of
threat information-for example, information that might be available from
such sources as ICE's Office of Intelligence and other DHS intelligence
gathering efforts. Threat assessment might help FDNS identify, for
example, whether terrorists might be more likely to try to exploit certain
immigration benefits. Neither do the fraud assessments include an
assessment of the consequences of granting a particular benefit to a
fraudulent filer. Such an assessment might help USCIS determine the
relative harm that granting such a benefit might pose to the United States
and its immigration benefit system. Although ultimately any benefit
obtained under false pretenses undermines the system established by U.S.
immigration law, consideration of whether, for example, granting a
specific benefit may also facilitate easier access for potential
terrorists to critical infrastructure or pose a greater detriment to the
U.S. economy could inform sound risk-based decision making.
Equipped with a more comprehensive understanding of the risks it faces-
particularly which benefits represent the highest risk, USCIS management
would then be in a better position to select appropriate risk mitigation
strategies and actions, particularly in situations where it is necessary
to make resource trade-offs or to balance multiple agency objectives. For
example, an obvious vulnerability to the immigration benefit system is the
submission of false eligibility evidence. Currently, however, USCIS
procedures do not include the verification of any eligibility evidence for
any benefit, despite its potential to help mitigate vulnerability to
fraud. 19 Verification of such evidence-by comparing it to other
information in USCIS databases, by checking it against external sources of
information, or by interviewing applicants-is the most direct and
effective strategy for mitigating this vulnerability. Employer wage data
reported to state labor agencies, for example, could be a useful source of
information to help determine if an employer has paid prevailing wages.
Data from state motor vehicle departments can be used to verify that the
two individuals claiming to be married live at the same address. We
previously reported that USCIS could benefit from verifying employer
related information with the
According to the Adjudicator's Field Manual, adjudicators are to try to
adjudicate the application based only on their review of the evidence
submitted. The field manual further states that only when an adjudicator
cannot decide whether to grant an immigration benefit based on the
evidence submitted, are they to consider taking additional steps such as
conducting internal research, requesting additional evidence, interviewing
individuals, or requesting a site visit.
Page 25 GAO-06-259 Immigration Benefits
Internal Revenue Service. 20 USCIS adjudicators told us that access to
commercial databases that provide identification and credential
verification would be helpful in verifying information contained in
benefit applications. Additionally, district office adjudicators told us
that it was often only during interviews that fraud became evident, even
when their earlier review had not raised suspicions. 21 A successful State
Department effort offers further evidence that the practice of verifying
key information can be an effective mitigation strategy. Due to a high
incidence of fraud in a program that allows foreign companies to bring
executives into the United States, one State Department consular post in
Latin America began verifying with local authorities two key pieces of
evidence that applicants were required to submit. According to the post,
it subsequently noticed a decrease in the number of potentially fraudulent
applications for this benefit.
On the other hand, verifying any applicant-submitted evidence in pursuit
of its fraud-prevention objectives represents a resource commitment for
USCIS and a potential trade-off with its production and customer
servicerelated objectives. In fiscal year 2004, USCIS had a backlog of
several million applications and has developed a plan to eliminate it by
the end of fiscal year 2006. 22 In June 2004, USCIS reported that it would
have to increase monthly production by about 20 percent to achieve its
legislatively mandated goal of adjudicating all applications within 6
months or less by the end of fiscal year 2006. According to USCIS, because
it does not plan to increase its current overall staffing level, meeting
its backlog reduction goal will require some combination of reductions in
the standard processing time for various applications, overtime hours, and
adjudicator reassignments. It would be impossible for USCIS to verify all
of the key information or interview all individuals related to the
millions of applications it adjudicates each year-approximately 7.5
million applications in fiscal year 2005-without seriously compromising
its service-related objectives. Identifying situations and benefits that
represent the highest risk to USCIS could help its management determine
whether and under what circumstances verification is so vital to
20 See GAO, Taxpayer Information: Options Exist to Enable Data Sharing
between IRS and USCIS but Each Presents Challenges, GAO-06-100 (
Washington, D.C.: Oct. 11, 2005).
21
Currently, personal interviews are conducted only for certain applications
and only in USCIS's district offices.
22
See GAO, Improvements Needed to Address Backlogs and Ensure Quality of
Adjudications, GAO-06-20 ( Washington D.C.: November 2005).
Page 26 GAO-06-259 Immigration Benefits
maintaining the integrity of the immigration benefits system that it
outweighs any potential increase in processing time and costs. In this
example, such an approach to risk management would inform selection among
alternative verification strategies by considering (1) the risk of failing
to detect fraud based on information provided by assessments of
vulnerabilities, threats, and consequences, (2) the cost of conducting the
verification (including its effect on other organizational objectives like
service), and (3) the potential for the verification activities, given the
current tools and information available, to actually detect fraud.
In addition to procedural vulnerabilities like the verification example, a
risk management approach could also guide USCIS in the evaluation of
policies that strike a balance between two or more agency objectives and
organizational priorities. For example, as previously discussed, USCIS's
policy of granting interim employment authorization documents to
applicants whose adjustment of status applications have not been
adjudicated within 90 days can be exploited by aliens seeking to gain work
authorization under false pretenses and to use work authorization to
obtain valid identity documents such as temporary social security cards
and drivers licenses. In his 2004 and 2005 annual reports, the CIS
Ombudsman identified this policy as a significant vulnerability in the
immigration benefits process, because he contends that for many
individuals the primary goal is to obtain temporary work authorization
regardless of the validity of their applications for permanent residency.
On the other hand, as we have previously reported, the reason for issuing
temporary work authorization is to allow legitimate applicants to work as
soon as possible, which according to USCIS, can serve to reduce the
negative effects of delay on applicants and their families. 23 Using more
comprehensive risk information to evaluate policies that represent
tradeoffs between fraud control and other agency objectives may help USCIS
management determine whether and to what extent unintended policy
consequences like in this example place the integrity of the immigration
benefits system at risk. This kind of risk management approach also would
provide USCIS management an opportunity to evaluate and select among
various approaches to balancing fraud control with other agency
objectives. In the temporary work authorization example, USCIS could
evaluate a variety of alternative strategies and select among them on the
basis of all available information, including risk. These strategies might
See GAO, Immigration Benefits: Several Factors Impede Timeliness of
Application Process, GAO-01-488 (Washington D.C.: May 2001).
Page 27 GAO-06-259 Immigration Benefits
USCIS Lacks a Mechanism to Ensure That Ongoing Monitoring Occurs in the
Course of Normal Operations
include: (1) maintaining the current policy if it is found to pose a
tolerable level of risk, (2) seeking applicable regulatory changes, or (3)
applying the policy disparately, to the extent allowed by law, across
benefit types based on the level of risk each represents. In commenting on
a draft of this report, DHS stated that a proposed regulatory change would
clarify USCIS's ability to withhold the adjudication of an application for
employment authorization pending an ongoing investigation.
Internal control standards advise that controls should be generally
designed to ensure that ongoing monitoring occurs in the course of normal
operations and is ingrained in the agency's operations. FDNS's fraud
assessment program provides some information about how fraud is committed
in the form of concentrated periodic assessments. However, currently USCIS
does not have a mechanism to ensure routine feedback to FDNS about
vulnerabilities identified during the course of normal operations and to
incorporate it into adjudication policies and procedures.
Besides information about vulnerabilities obtained from its operational
experience adjudicating applications, additional information might be
available to FDNS from external entities that also have responsibility for
some aspect of controlling benefit fraud. One external source of fraud
information that might inform USCIS operations is the U.S. Attorneys
Office, which prosecutes immigration benefit fraud cases. For example, one
U.S. Attorney, based on cases his office has prosecuted, has issued
memoranda showing how underlying regulatory and adjudication processes
have invited abuse of the immigration system. A March 2005 memorandum
prepared by this office explained how a recent investigation revealed
significant weaknesses in the asylum process that allowed ineligible
aliens to obtain asylum, and made suggestions for reforming the process.
The memorandum stated that these suggestions were intended to start a
discussion among federal agencies with immigration responsibilities that
could lead to needed reforms. In commenting on a draft of this report, DHS
stated that USCIS is developing a plan of action to work with other DHS
entities and the Executive Office of Immigration Review within the
Department of Justice to respond to specific recommendations made by the
U.S. Attorney that prepared the memorandum on asylum program weaknesses.
Another source of information available to USCIS about fraud
vulnerabilities are the criminal investigations conducted by ICE, DOL, and
the DHS Office of Inspector General, 24 which could reveal such
information as the characteristics of those who commit fraud and how these
individuals exploited weaknesses in the immigration benefit process to
obtain benefits illegally. USCIS's National Benefit Fraud Strategy does
not mention incorporating lessons learned from investigative and
prosecutorial activities into its fraud control efforts-specifically, how
the knowledge ICE, DOL, and DHS investigators and U.S. Attorneys gained
during the course of investigations and prosecutions could be collected
and analyzed in order to become aware of opportunities to reduce fraud
vulnerabilities. 25 A mechanism to help ensure that information from these
and related sources results in appropriate refinements to policies and
procedures could enhance USCIS's efforts to address fraud vulnerabilities.
DOL, which plays an important role in the benefits process for some
permanent employment benefits, has used external information to refine its
procedures in this way. Specifically, it analyzed the results of major
criminal investigations and prosecutions to evaluate and establish new
procedures that require verifying key application information, such as the
existence of a business. DOL found it was necessary to change its
permanent labor certification procedures to require verification of basic
application information in order to mitigate the risk of mistakenly
approving permanent labor certification applications, and protect the
fundamental integrity of the labor certification process from blatant
abuse. 26
24
Among other things, this office investigates criminal allegations of USCIS
employee involvement in immigration benefit fraud. The DHS Office of
Inspector General provides the results of such investigations to USCIS's
Office of Security and Investigations.
25
A February 2006 memorandum of agreement between USICS and ICE requires ICE
to submit a report to USCIS on the findings of investigations resulting
from referrals from USCIS. However, the memorandum does not require ICE to
report the findings from benefit fraud investigations resulting from leads
from other sources, such as other ICE investigations or other agencies.
26
For permanent employment immigration, petitioners are required to obtain
labor certifications from the Department of Labor. The DOL is required to
certify that there are not sufficient U. S. workers who are able, willing,
qualified, and available and that at least the prevailing wage will be
paid. The labor certification is then submitted to USCIS along with an
application for an alien worker using an I-140 immigration form. USCIS's
responsibility is to then ensure that the prospective employee has the
necessary qualifications for the job.
USCIS May Not Clearly Communicate the Importance of Fraud Control and How
Adjudicators Are to Balance It with Other Objectives
Internal control standards advise that for agencies to manage their
operations, they must have relevant, reliable, and timely communications.
Furthermore, establishing a positive fraud control environment is central
to an agency's efforts to detect and deter immigration benefit fraud. The
NAO guidance also advises management to ensure that all levels of the
organization are made to share a concern about fraud. It is the stated
mission of USCIS to provide the right benefit, to the right person, at the
right time, and no benefit to the wrong person. Specifically, it aims to
adjudicate all benefit requests within 6 months of receipt, without
compromising the integrity of the process, nor significantly increasing
staff. These objectives-speed, quality, and cost-are inherently in tension
with one another. Therefore, it is particularly important, given USCIS's
multiple objectives, that it clearly communicates the importance of each
of the objectives at every level of the organization, and provides clear
guidance to adjudicators about how to balance them in the course of their
daily duties.
Although USCIS's backlog elimination plan acknowledges the need to balance
its focus on reducing the backlog with efforts to ensure adjudicative
quality, some USCIS adjudicators we interviewed indicated that it was not
clear to them how the agency expected them to balance fraud detection
efforts and production goals during the course of their duties.
Adjudicators we spoke with said that communications from management
emphasized meeting production backlog goals almost exclusively. They said
that management's focused attention on reducing the backlog placed
additional pressure on them to process applications faster, thereby
increasing the risk of making incorrect decisions, including approving
potentially fraudulent applications. For example, adjudicators at all four
service centers we spoke with told us that operations management seemed to
be almost exclusively focused on reducing the backlog in order to meet
production goals. 27 USCIS headquarters operations management responsible
for overseeing adjudications at service centers and district offices told
us that the adjudications operation is a "high-pressure" production
environment and that they are seeking to increase production, but it was
not their intention that this should come at the expense of making
incorrect adjudication decisions.
27
At one service center the union representing adjudicators filed a
grievance in June 2005 claiming that proposed new performance standards
for adjudicators were unrealistic and would compromise the quality of
adjudication decisions.
Page 30 GAO-06-259 Immigration Benefits
The FDNS Director told us that he had also discussed with operations
management the need to strike a more balanced approach to meeting
production goals and ensuring that the right eligibility decision is made.
He acknowledged that until FDNS establishes an ability to proactively
identify fraud through its automated analysis tools, adjudicators will
continue to play a primary role in detecting fraud. Therefore, he
acknowledged the importance of clear and balanced communications from
operations management to adjudicators in support of USCIS's new fraud
detection process and the shared responsibilities in this regard.
Nevertheless, adjudicators we interviewed told us that they have received
guidance from different parts of the agency regarding the lengths to which
they should go in confirming suspected fraud that they were uncertain how
to interpret. For example, in December 2004, the FDNS Director issued
guidance stating that adjudicators should obtain the evidence needed to
support their suspicions of fraud before making a referral, including, if
necessary, requesting additional evidence from applicants. According to
adjudicators and FDU staff we interviewed, this guidance appears to
conflict with a subsequent January 2005 memorandum, issued by the Director
of Service Center Operations, which states that adjudicator requests for
information should not be used as a device simply to "investigate"
suspected fraud. Adjudicators we interviewed at one service center said
that whenever operations management communicated with them about
practicing more discretion in issuing requests for additional evidence,
they believed it was primarily intended to put more pressure on them to
process applications faster, which in turn they said puts additional
pressure on them to not to request additional evidence when making
eligibility decisions. Consequently, they were concerned about having to
approve applications with less confidence in the correctness of their
determinations. An FDNS Immigration Officer working in a service center
echoed the adjudicators concerns about seemingly conflicting guidance,
saying that interpreting such guidance from management made the job of
adjudicators more difficult. However, he said that adjudicators and local
managers would more likely heed the direction of USCIS operations
management, their direct supervisors, rather than FDNS. Clear
communications about the importance of both fraud prevention-related and
service-related objectives and how they are to be balanced may help
adjudicators ensure that they are appropriately supporting USCIS's
multiple objectives as they carry out their duties. In commenting on a
draft of this report, DHS stated that the USCIS Director moved FDNS to a
new directorate that reports directly to the USCIS Deputy Director. This
will allow FDNS to provide focus and guidance to all USCIS operations.
Adjudicators and FDNS Staff Lack Access to Important Information and
Information Tools
USCIS does not have a mechanism to help ensure that adjudicators have
access to information related to detecting fraud they may need to carry
out their responsibilities. Information regarding fraud trends can be
provided in various forms including e-mails, intranet Web pages, and
bulletin board notices. The adjudicators at the service centers and
district offices we visited received some fraud-related information or
training subsequent to their initial hire. 28 Our interviews indicated,
however, that the frequency and method for distributing ongoing
information about fraud detection is not uniform across the service
centers and district offices we visited; some adjudicators reported that
more information or a more centralized information management system would
better prepare them to detect fraud. At two service centers, adjudicators
we interviewed told us that, after their initial training, they were
provided with some information regarding fraud trends via e-mail. However,
these adjudicators also reported difficulty with managing the information
in this format. They said that providing this information through a
different means-either through a Web-based system or through a training
course that would summarize new knowledge related to fraud trends-would be
easier and quicker to use. One of the service centers provided
adjudicators with operating manuals-developed for specific benefit
application types-that included information regarding typical fraud trends
encountered by the service center, which adjudicators said they found
useful in their efforts to detect fraud.
At two other service centers, adjudicators we interviewed told us that
they were not provided any fraud e-mail updates but received some limited
information about fraud during general group meetings. Adjudicators at
these two centers told us that receiving more specific and detailed
information about fraud trends and practices would enhance their ability
to detect fraud. At one service center, adjudicators suggested that having
a method by which to incorporate the knowledge and lessons learned from
experienced adjudicators would also help them to better detect fraud.
Additionally, one of the district offices we visited provided an
additional 2day training course that included techniques for detecting
fraud during an interview. Adjudicators we interviewed at this district
office told us that the course helped prepare them to better detect fraud.
USCIS headquarters officials responsible for field operations told us that
there is
28
USCIS initial adjudicator training provides approximately 4 hours of
fraud-related training that focuses primarily on detecting fraudulent
documents during 6 weeks of training.
Page 32 GAO-06-259 Immigration Benefits
no standard training regarding fraud trends and that fraud-related
training varied across field offices.
In addition to calling for relevant information to be shared internally,
internal control standards require that management ensure that there are
adequate means of communicating with and obtaining from external
stakeholders information that may have a significant impact on achieving
agency goals. During our audit work, USCIS and ICE, had not yet
established a feedback mechanism for the timely sharing of information
related to the status and outcomes of fraud referrals that is essential to
the fraud referral process shared by USCIS and ICE. According to FDNS
field staff we interviewed, information from ICE field offices on the
status of USCIS referrals-for example, whether ICE has initiated an
investigation in response to a referral-was sporadic and incomplete in
some cases and non-existent in other cases. In addition, when ICE fails to
accept a referral, FDNS may initiate an administrative inquiry to resolve
an adjudicator's suspicions of fraud. However, because ICE did not
routinely provide information about its investigative decisions, it was
difficult for FDNS to know when to initiate such inquiries or to plan for
the staff time needed to conduct them. Moreover, according to FDNS staff
and adjudicators we interviewed, without timely feedback about the
investigative status of their referrals, adjudicators lacked the
information needed to make more timely eligibility determinations, whether
or not an investigation is opened by ICE. In November 2005, ICE and USCIS
officials told us that ICE investigators were recently assigned to each of
the FDUs, which may help increase communication and information sharing
between USCIS and ICE.
Additionally, according to the FDNS Director, having direct access to
information stored in ICE's case management information system, the
Treasury Enforcement Communication System (TECS) maintained by Customs and
Border Protection (CBP), would allow FDNS staff to determine with greater
certainty whether someone who has filed for an immigration benefit is
connected to any ongoing ICE criminal investigation. However, ICE
officials told us they opposed allowing FDNS access to sensitive case
management information. They said that there was a need to segregate
sensitive law enforcement data about ongoing cases from non-law
enforcement agencies like FDNS.
In commenting on a draft of this report, DHS provided us with a February
14, 2006, memorandum of agreement between ICE and USCIS that established a
mechanism for the sharing of information related to the status and
outcomes of fraud referrals. In addition the agreement provides USCIS
staff with access to TECS data so USCIS can determine whether
DHS Lacks Performance Goals for USCIS's Antifraud Efforts
someone who has filed for an immigration benefit is connected to any
ongoing ICE criminal investigation. If properly implemented, this
agreement should resolve USCIS's concerns regarding the status and outcome
of fraud referrals to ICE and access to TECS data.
Internal control standards call for agencies to establish performance
measures to monitor performance related to agency objectives. Measuring
performance allows an organization to track progress made toward achieving
its objectives and provides managers with crucial information on which to
base management decisions. The Government Performance and Results Act
(GPRA) of 1993 also requires that agencies establish longterm strategic
and annual goals, measure performance against these goals, and report on
the progress made toward meeting their missions and objectives. It calls
for agencies to assess specific outcomes related to their missions and
objectives, in addition to designing output measures to describe
attributes of the goods and services produced by the agencies' programs.
USCIS's 2005 Strategic Plan includes both a prevention theme-ensuring the
integrity of the system, and a service theme-providing efficient and
customer oriented services, along with related goals and objectives.
However, DHS and USCIS have not established specific performance goals to
assess benefit fraud activities. In fiscal year 2004 USCIS reported
performance goals related to naturalization, legal permanent residency,
and temporary residency to DHS for its annual Performance and
Accountability Report. The objective for each of these three performance
goals was to "provide information and benefits in a timely, accurate,
consistent, courteous, and professional manner; and prevent ineligible
individuals from receiving" the benefit. Although the objective includes
preventing ineligible individuals from receiving the benefit, the related
measure-achieve and maintain a 6-month cycle time goal-does not.
There is no discussion in the strategic plan of how to balance its
prevention objectives with its service objectives. Instead, USCIS's
longterm strategic approach appears to rely heavily on the development of
an enhanced case management system, new fraud databases and data analyses
tools, and automated information services to overcome the inherent tension
between these prevention and services themes as they relate to the
prevention of benefit fraud and reducing the backlog of immigration
applications. Establishing output measures-for example, the number of
cases referred to and accepted by FDNS-and outcome measures-for example,
the percentage of fraudulent applications detected relative to targets
established using baseline data from fraud
Most Benefit Fraud Is Not Criminally Prosecuted, but DHS Does Not Have an
Administrative Sanctions Program
assessments-could provide USCIS with more complete information about the
effectiveness of its fraud control efforts in meeting its strategic goal
objective to ensure the security and integrity of the immigration system.
FDNS officials told us that they are now participating in USCIS's Office
of Policy and Strategy Performance Measurement Team's efforts to develop
performance metrics, and that FDNS is leading an effort to develop metrics
related to USCIS's strategic goal to ensure the security and integrity of
the immigration system by increasing the detection of attempted
immigration benefit fraud. However, specific DHS metrics regarding USCIS's
antifraud efforts have yet to be developed and approved by DHS.
Although best practice guidance suggests that sanctions for those who
commit benefit fraud are central to a strong fraud control environment,
and the INA provides for criminal and administrative sanctioning, DHS does
not currently actively use the administrative sanctions available to it.
Fraud control best practices advise that a credible sanctions program,
which incorporates a mechanism for evaluating its effectiveness, including
the wider value of deterrence, is an integral part of fraud control.
According to the AICPA's fraud guidance, the way an entity reacts to fraud
can send a strong message that helps reduce the number of future
occurrences. Therefore, taking appropriate and consistent actions against
violators is an important element of fraud control and deterrence. The
guide further advises that a strong emphasis on fraud deterrence has the
effect of persuading individuals that they should not commit fraud because
of the likelihood of punishment. Similarly, the NAO guide states that a
key element of a good fraud control program is to impose penalties and
sanctions on those who commit fraud in order to penalize those who commit
fraud and deter others from carrying out similar types of fraud.
Data provided by USCIS indicates that most benefit fraud it uncovers and
refers to ICE is not prosecuted. In fiscal year 2005, USCIS referred 2,289
immigration benefit fraud cases to ICE BFUs. However, 598, about 26
percent were accepted by the BFUs. Neither USCIS nor ICE provided us with
information about which of the FDNS referrals accepted by the BFUs
resulted in an ICE investigation. However, ICE officials said that the
majority of ICE's immigration benefit fraud investigations do not
originate with USCIS referrals, but from other investigative sources.
Given limits on its resources, ICE officials told us that they generally
prioritize their investigative resources and assign them to cases
involving individuals who are filing large numbers of fraudulent
applications for profit, because these cases generally have a greater
probability of being prosecuted by the
U.S. Attorneys Offices. Therefore, the principal means of imposing
sanctions on most immigration benefit fraud would be through
administrative penalties.
The INA provides both criminal and administrative sanctions for those who
commit immigration benefit fraud. 29 The act's criminal provisions provide
for fines and/or imprisonment for up to 5 years for a person who fails to
disclose that they have, for a fee, assisted in preparing an application
for an immigration benefit that was falsely made, and monetary fines
and/or imprisonment for up to 15 years for a second such conviction. The
act also provides for administrative penalties for applicants who make
false statements or submit a fraudulent document to obtain an immigration
benefit or enter into a marriage solely to obtain an immigration benefit.
30 For document fraud committed after 1999, it provides monetary fines
ranging from $275 to $2,200 per document subject to a violation for a
first offense and from $2,200 to $5,500 per document for those who have
previously been fined. Monetary penalties collected are to be deposited
into the Immigration Enforcement Account within the Department of the
Treasury. Funds from this account can be used for activities that enhance
enforcement of provisions of the INA including: (1) the identification,
investigation, apprehension, detention, and removal of criminal aliens;
(2) the maintenance and updating of a system to identify and track
criminal aliens, deportable aliens, inadmissible aliens, and aliens
illegally entering the United States; and (3) for the repair, maintenance,
or construction of border facilities to deter illegal entry along the
border. In addition, under certain circumstances, individuals determined
through the adjudication process to have committed fraud, are deemed
inadmissible should they later try to file another immigration
application. In some cases, aliens who are determined in a formal hearing
to have committed fraud can be removed from the United States and be
barred from entering in the future.
DHS does not currently have a clear and comprehensive strategy for
imposing sanctions or evaluating their effectiveness and is not actively
enforcing the administrative penalties provided for by the INA. This is
largely due to a 1998 federal appeals court ruling upholding a nationwide
29
Immigration fraud can also be criminally prosecuted under other federal
statutes.
30
8 U.S.C. S:S: 1324c(a), (d); 1154(c).
permanent injunction against the procedures used by INS to institute civil
document fraud charges under the INA. 31 The court found that INS provided
insufficient notice to aliens regarding their right to request a hearing
on the imposition of monetary fines and the immigration consequences of
failing to do so, and that until proper notifications were included on the
fine and hearing waiver forms, INS was enjoined from implementing civil
penalties for document fraud. According to the Director of Field
Operations for ICE's Office of Principal Legal Advisor, after the court
ruling, the government's cost to investigate and prosecute an immigration
fraud case administratively, including appeals costs, would not be offset
by the monetary sum that might be obtained. Moreover, the director stated
that even if successful, there was no guarantee that the government could
collect its fine from the alien. Therefore, according to the director, ICE
does not consider implementing the administrative penalties for document
fraud to be cost-effective. Accordingly, DHS has not made updating the
forms in response to the ruling a priority. Similarly, another USCIS
attorney told us that the provision of INA that pertains to marriage fraud
is rarely used because, due to the significant commitment of resources
necessary to establish a finding of fraud, enforcing it might not be
cost-effective. However, DHS has not conducted a formal analysis, which
includes an attempt to value the benefit of deterrence, to determine the
total costs and benefits of imposing sanctions.
Senior USCIS officials we spoke with, however, told us that administrative
sanctions are important to their fraud control efforts. According to the
FDNS Director, without the credible threat of a penalty, individuals have
no fear of filing future fraudulent applications. In this regard, he said
that FDNS administrative investigations of fraud referrals not
investigated by ICE are critical, and, in his estimation, the resulting
denial of a benefit and potential removal of an alien offer an effective
deterrent to immigration benefit fraud. However, the director said that
although an alien who commits immigration benefit fraud might be removable
from the United States and, therefore, has some disincentive to commit
fraud, U.S. citizens, if they are not prosecuted criminally, have little
disincentive because without the enforcement of administrative sanctions
they are not likely to be penalized, even if their violations are
detected. Additionally, according to the Chief of Staff for USCIS, a
strategy for administratively sanctioning those who commit fraud is
necessary for controlling and deterring fraud.
Walters v. Reno, 145 F.3d 1032 (9th Cir. 1998).
Conclusions
Although DHS does not actively use its authorities to impose
administrative penalties, Congress has continued to support the concept in
legislation. In particular, the Real ID Act of 2005 allows the Secretary
of Homeland Security, after notice and an opportunity for a hearing, to
impose an administrative fine of up to $10,000 per violation on an
employer for a substantial failure to meet any of the conditions of a
petition for certain non-immigrant workers or a willful misrepresentation
of a material fact in such a petition, and allows the secretary to deny
petitions filed with respect to that employer for at least 1 year and not
more than 5 years. 32 However, without a strategy that includes a
mechanism for assessing the effectiveness of sanctions and considers both
the monetary value of fines collected and the value of deterrence, DHS
will not be able to determine how and under what circumstances to best use
the authority provided by the INA and other legislation to promote a
credible threat of punishment in order to deter fraudulent filers.
Although it lacks a strategy for imposing criminal and administrative
sanctions, DHS, along with DOL, has proposed administrative rule changes
that will help sanction those who commit fraud. Among other things, DHS
has proposed that USCIS be able to deny, for a period of time, all
applications from employers that DOL or DHS has found, respectively, to
have submitted false information about meeting regulatory requirements or
provided statements in their applications that were inaccurate, fraudulent
or misrepresented a material fact. Final rules have not yet been
published.
In light of competing organizational priorities, institutionalizing fraud
detection-so that it is a built-in part of the adjudications process and
always a central part of USCIS's planning, procedures, and methods-is
vital to USCIS's ability to accomplish its goals and objectives,
particularly protecting the integrity of the immigration benefit system.
USCIS has taken some important steps to implement internal controls,
primarily through the activities of the Office of Fraud Detection and
National Security. By strengthening existing controls and implementing
additional fraud control practices, USCIS could enhance its ability to
detect benefit fraud and gain greater assurance that its operations are
designed to protect the integrity of the system, even as it strives to
enhance service and meet its backlog reduction goals. Specifically,
expanding the types of
32
Pub. L. No. 109-13, div. B, S: 404(a), 119 Stat. 302, 319-20 (amending 8 U.S.C.
S: 1184(c)).
Page 38 GAO-06-259 Immigration Benefits
benefits it assesses, including assessments of consequence, and drawing on
all available sources of threat information to develop current fraud
assessment activities into a more comprehensive risk management approach
would provide additional knowledge about fraud risks and put the agency in
a better position to make risk-based evaluations of its policies,
procedures, and programmatic activities. Also, a mechanism to ensure that
information uncovered during the course of normal operations-in USCIS and
related agencies-feeds back into USCIS policies and procedures would help
to ensure that it addresses loopholes and procedural weaknesses. In
addition, clear communication of the importance of fraud
prevention-related objectives and how they are to be balanced, in
practice, with service-related objectives would help USCIS adjudicators to
ensure that they are supporting the agency's multiple objectives as they
carry out their duties. Moreover, the provision of the tools and the
relevant information that its adjudicators need to help them detect fraud
could help them make eligibility determinations with greater confidence of
their accuracy. Finally, performance goals-that include output and outcome
measures, along with associated targets-reflecting the status of fraud
control efforts would provide valuable information for USCIS management to
evaluate its various policies, procedures, and programmatic activities and
a better understanding of both the progress made and areas requiring more
focused management attention to enhance fraud prevention.
By demonstrating sufficiently adverse consequences for individuals who
perpetrate fraud, sanctions serve to discourage future fraudulent filings,
as individuals observe that the potential costs of engaging in fraud are
likely to outweigh the potential gains. It is important to any program
that encounters fraud to have a credible sanctions program to penalize
those who engage in fraud and deter others from doing so. Currently, DHS's
sanctions program for immigration fraud is not a threat to most
perpetrators because relatively few are prosecuted criminally and
administrative sanctions are not actively being used. Although DHS
officials told us that administrative sanctions are not cost-effective,
comparing only the costs of administering sanctions with the potential
return from the collection of fines may undervalue their potential
deterrent effects. Although developing a sound methodology to establish
and determine the value of deterrence provided by sanctions will require
effort, best practices call for cost-effective sanctions, and
consideration of the full range of costs and benefits, financial and
nonfinancial, is central to making a valid determination of
cost-effectiveness. Developing and implementing a strategy for imposing
sanctions that includes a mechanism for assessing effectiveness and that
more fully evaluates costs and benefits, including nonfinancial benefits
like the value of deterrence, could give DHS a better indication of how
and under what circumstances administrative sanctions should be employed
to enhance USCIS's fraud deterrence efforts.
In order to enhance USCIS's overall immigration benefit fraud control
Recommendations for
environment, we recommend that the Secretary of Homeland Security
Executive Action direct the Director of USCIS to take the following five
actions, which are consistent with internal control standards and best
practices in the area of fraud control:
o Enhance its risk management approach by (1) expanding its fraud
assessment program to cover more immigration application types; (2)
fully incorporating threat and consequence assessments into its fraud
assessment activities; and (3) using risk analysis to evaluate
management alternatives to mitigate identified vulnerabilities.
o Implement a mechanism to help USCIS ensure that information about
fraud vulnerabilities uncovered during the course of normal
operations-by USCIS and related agencies-feeds back into and
contributes to changes in policies and procedures when needed to
ensure that identified vulnerabilities result in appropriate
corrective actions.
o Communicate clearly to USCIS adjudicators the importance USCIS's
fraud-prevention objectives and how they are to be balanced with
service-oriented objectives to help adjudicators ensure that both
objectives are supported as they carry out their duties.
o Provide USCIS's adjudicator staff with access to relevant internal and
external information that bears on their ability to detect fraud, make
correct eligibility determinations, and support the new fraud referral
process-particularly ongoing updates regarding fraud trends and other
information related to fraud detection.
o Establish output and outcome based performance goals-along with
associated measures and targets-to assess the effectiveness of fraud
control efforts and provide more complete performance information to
guide management decisions about the need for any corrective action to
improve the ability to detect fraud.
Agency Comments and Our Evaluation
In addition, in order to enhance DHS's ability to sanction immigration
benefit fraud, we recommend the Secretary of Homeland Security direct the
Director of USCIS and the Assistant Secretary of ICE to:
o Develop a strategy for implementing a sanctions program that includes
mechanisms for assessing its effectiveness and for determining its
associated costs and benefits, including its deterrence value.
We provided a draft of this report to the Departments of Homeland
Security, State, Justice, and Labor for review. On March 1, 2006, we
received written comments on the draft report from the Department of
Homeland Security, which are reproduced in full in appendix II. The
Departments of State, Justice, and Labor had no comments on our draft
report. In its written comments, DHS stated that our report generally
provided a good overview of the complexities associated with pursuing
immigration benefit fraud and the need to have a program in place that
proactively assesses vulnerabilities within the myriad of immigration
processes. However, DHS stated that our report did not fully portray
USCIS's efforts to address immigration benefit fraud and provided other
examples of efforts USCIS has undertaken or plans to undertake. Where
appropriate, we revised the draft report to recognize these additional
efforts by USCIS to address immigration benefit fraud. DHS noted that
USCIS used GAO's 2002 report on immigration benefit fraud as the
foundation to build its antifraud program and believes that USCIS is on
the right track to creating an effective antifraud program. We believe
that USCIS is moving in the right direction and recognize that FDNS is in
the beginning stages of developing and implementing a new antifraud
program for USCIS.
Overall, DHS agreed with and plans to take action to implement four of our
six recommendations, and cited actions it has already taken to indicate
that aspects of our other two recommendations are already in place.
Specifically, regarding our recommendation that DHS enhance its risk
management approach, DHS agreed that USCIS can enhance its risk management
approach by expanding its fraud assessment program to cover more
application types and plans to do so. DHS stated that its initial fraud
assessments focused on benefits that were high risk, but that given
existing resources it was not possible to conduct assessments on all
benefit types within the first years of operation. DHS stated that USCIS
believes that the benefit fraud assessments currently underway do provide
a comprehensive risk analysis to identify vulnerabilities and measures to
mitigate such vulnerabilities. DHS cites FDNS involvement in interagency
anti-fraud efforts and that FDNS staff are assigned to various
intelligence units as support that its fraud assessments draws on sources
of strategic threat information. However, DHS did not provide evidence or
explain how, if at all, these efforts systematically incorporated threat
and consequences into its fraud assessment process. In addition, DHS did
not explain or provide us with evidence of how USCIS will use the results
of the fraud assessments as part of a continuous, built-in component of
its operations to evaluate and adjust, as necessary, policies and
procedures.
Regarding our recommendation that DHS provide USCIS adjudicator staff
relevant information, DHS agreed that it needs to provide USCIS staff
access to relevant internal and external information and is initiating
training for supervisory adjudication officers and is planning to provide
adjudicators selective access to the State Department's Consolidated
Consular Database and other open source databases.
Regarding our recommendation that DHS establish performance goals to
assess the effectiveness of fraud control efforts, DHS stated that FDNS
has created performance goals for the number of benefit fraud assessments
conducted during the year and the number of recommended policy, procedural
and regulatory changes. DHS agreed that additional output and outcome
based performance goals and measures are needed but did not specify what
action(s) they were planning to take.
Regarding our recommendation that DHS develop a strategy for implementing
a sanctions program, DHS agreed to study the costs and benefits of an
administrative sanctions program though DHS believes that the process it
has established to place aliens determined to have committed immigration
fraud in removal proceedings is an effective deterrent. While this process
may deter aliens from committing immigration fraud, this process does not
impact citizens who may commit fraud and therefore a sanctions strategy
for citizens is still needed.
DHS stated that with regard to two of our recommendations, it has already
take actions that are consistent with these two recommendations. Regarding
our recommendation that USCIS implement a mechanism to feed back
information uncovered during the course of its normal operations and those
of related agencies about fraud vulnerabilities, DHS stated that it
believes such a feedback loop already exists within the process. DHS
stated that FDNS is currently developing its back-end processes, which
include sharing information/lessons learned from routine operations and
addressing shortcomings. For all major conspiracy cases, a report is to be
prepared summarizing among other things, factors that lead to fraudulent
applications being approved. USCIS also stated that based upon meetings
that FDNS leadership had with a U.S. Attorneys Office regarding
vulnerabilities in the asylum process, USCIS is developing a plan of
action to respond to the recommendations made by the U.S. Attorney's
office. DHS also stated that USCIS is developing regulatory changes to
mitigate vulnerabilities identified during the religious worker fraud
assessment. Although these are all positive efforts, USCIS does not yet
have policies and procedures that specify how information about fraud
vulnerabilities uncovered during the course of normal operations-by USCIS
and related agencies-is to be gathered-from which internal and external
sources-and the process for evaluating this information and making
decisions about appropriate corrective actions. Therefore, we continue to
believe that USCIS needs to institutionalize through policies and
procedures a feedback mechanism.
Regarding our recommendation that USCIS clearly communicate the importance
of USCIS' fraud-prevention activities, DHS stated USCIS leadership clearly
advocates balancing objectives related to timely and quality processing of
immigration benefits. DHS stated that creation of FDNS and the recent move
of FDNS to a new directorate that reports directly to the Deputy Director
of USCIS allowing FDNS to provide focus and guidance to all USCIS
operations as support that USCIS is focused on the integrity of USCIS's
data and processes. Although USCIS management believes these efforts
demonstrate the importance of fraud prevention, our interviews with
adjudicators in service centers and district offices indicate that this
message may not be reaching USCIS's adjudications staff. Therefore, we
continue to believe that more is needed to clearly communicate the
importance of fraud prevention and more specific guidance on how USCIS
staff are to balance the fraud prevention and service oriented objectives.
DHS disagreed with our recommendation that USCIS and ICE establish a
mechanism for the sharing of information related to the status and
outcomes of USCIS fraud referrals to ICE. DHS provided us a February 2006
memorandum of agreement between ICE and USCIS that establishes a mechanism
for the sharing of information related to the status and outcomes of fraud
referrals; therefore, we withdrew this recommendation.
We are sending copies of this report to the Secretaries of Homeland
Security, State, and Labor; the Attorney General; and other interested
congressional committees. We will also make copies available to others
upon request. In addition, the report will be available at no charge on
GAO's Web site at http://www.gao.gov.
Page 43 GAO-06-259 Immigration Benefits
If you or your staff have any questions concerning this report, please
contact me at (202) 512-8777 or [email protected]. Contact points for our
Offices of Congressional Relations and Public Affairs may be found on the
last page of this report. Key contributors to this report are listed in
appendix III.
Paul L. Jones Director, Homeland Security and Justice Issues
Appendix I: Scope and Methodology
To examine the extent and nature of immigration fraud, we reviewed the
results of the Office of Fraud Detection and National Security's (FDNS)
ongoing fraud assessments. Regarding the fraud assessments, we interviewed
the FDNS managers responsible for administering the assessment, reviewed
documentation outlining the assessment's design, implementation and
initial results from two fraud assessments. To better understand the
nature of immigration benefit fraud and to identify common fraud patterns,
we analyzed examples of fraud case histories for several petition types
planned to be assessed by FDNS. In addition, we analyzed information
contained in fraud bulletins prepared by U.S. Citizen Immigration
Services' (USCIS) California Service Center that contained reports by
various State Department overseas consular posts on immigration fraud
these posts had uncovered. We also analyzed USCIS's Performance Analysis
System (PAS) data to determine trends in the volume of applications being
processed, approved, and denied. We assessed the data derived from PAS and
determined that these data were sufficiently reliable for the purposes of
this review. We interviewed adjudications staff and field managers to
evaluate the extent to which internal controls and practices for detecting
fraud were incorporated into USCIS policies, procedures, and tools. We met
with headquarters officials from USCIS operations and FDNS, as well as
officials from the Departments of Labor and State responsible for fraud
detection efforts. We conducted site visits or contacted staff at all four
USCIS services centers-we visited three USCIS service centers in Laguna
Niguel, California; Dallas, Texas; and St. Albans, Vermont; and conducted
telephone interviews with USCIS staff at the Lincoln, Nebraska, service
center. We also interviewed 59 adjudicators at the four USCIS service
centers and two USCIS district offices with responsibility for and
familiarity with adjudicating different types of applications in a group
setting, which allowed us to identify points of consensus among the
adjudicators. We also visited USCIS district offices in Dallas and Boston
responsible for coordinating their fraud referrals with two of the four
service centers we visited. USCIS service center and district office
officials selected the adjudicators we interviewed based upon our request
that we meet with adjudicators that had responsibility for and familiarity
with adjudicating different types of applications. We also interviewed
FDNS staff assigned to work with the four service centers and two district
offices we visited or contacted. We also interviewed staff from
Immigration and Custom Enforcement's (ICE) Identity and Benefit Fraud Unit
in Washington, D.C., and those agents assigned to Benefit Fraud Units
(BFU) in California, Texas, and Vermont. As we did not select a
probability sample of USCIS staff and ICE Office of Investigations agents
to interview, the results of these interviews cannot be projected to all
USCIS staff and
Appendix I: Scope and Methodology
ICE Office of Investigations officials nationwide. In addition, we
reviewed efforts by the Department of Labor's Inspector General to
determine the extent of immigration fraud in the Permanent Labor
Certification Program. We also met with the CIS Ombudsman to discuss his
fiscal year 2004 and fiscal year 2005 reports.
To determine what actions USCIS has taken to improve its ability to detect
immigration benefit fraud, we reviewed USCIS's efforts to improve its
fraud detection capabilities, including resources devoted specifically to
detecting fraud by FDNS. We also reviewed USCIS's policies, adjudication
procedures, and fraud detection processes as well as the tools used by
adjudicators to detect fraudulent immigration benefit applications. To
determine what actions have been taken to sanction those who commit fraud,
we interviewed USCIS and ICE attorneys, identified the investigative
resources that ICE had made available for immigration fraud
investigations, and determined how USCIS and ICE coordinate the
investigation of potential fraud. In addition, we examined fraud
investigation and prosecution statistics, and analyzed USCIS statistics
about the amount of fraud identified by its adjudicators. We also
determined how ICE investigative efforts are coordinated with the U.S.
Attorneys Offices and how their priorities affect the investigation and
prosecution of immigration benefit fraud schemes of various types. For
this portion of our review, we met with headquarters officials from ICE,
and interviewed agents in four ICE field offices based in Boston, Dallas,
Los Angeles, and San Antonio. We also interviewed representatives from the
U.S. Attorneys Office for the Eastern District of Virginia and the
Executive Office of the U.S. Attorneys within the Department of Justice.
Finally, we examined the current sanctions for those who commit
immigration benefit fraud and reviewed proposed fraud regulatory changes.
To evaluate DHS efforts to detect and sanction immigration benefit fraud,
we used the Standards for Internal Control in the Federal Government and
with best practices advocated by the American Institute of Certified
Public Accountants (AICPA) and by the United Kingdom's National Audit
Office (NAO).
We conducted our work between October 2004 and December 2005 in accordance
with generally accepted government auditing standards.
Appendix II: Comments from the Department of Homeland Security
Appendix II: Comments from the Department of Homeland Security
Appendix II: Comments from the Department of Homeland Security
Appendix II: Comments from the Department of Homeland Security
Appendix II: Comments from the Department of Homeland Security
Appendix III: GAO Contact and Staff Acknowledgments
Paul L. Jones (202) 512-8777
GAO Contact
In addition to the above, Joel Aldape, David Alexander, Jenny Chanley,
Staff
Frances Cook, Michael P. Dino, Nancy Finley, Carlos Garcia, Kathryn
Acknowledgements Godfrey, Larry Harrell, and David Nicholson were key
contributors to this report.
(440361)
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