Chinese Spies Taking Advantage of U.S. Business Visas

Insight on the News, June 7, 1999 by Jamie Dettmer, Timothy W. Maier

Few newspapers chose to cover the visa-fraud heatings on May 6 by the House Judiciary subcommittee on Immigration and Claims. Those that did failed to push beyond the testimony of administration officials, who acknowledged that business-visa programs allowing foreign skilled workers into the United States are being abused by Chinese alien smugglers and Russian organized-crime syndicates.

And the word "China"--well, that appeared to pass by the reporters, none of whom drew any possible connection between Chinese smugglers and Chinese espionage. They should have because news alert! has learned that U.S. intelligence sources believe the same H1-B and L-1 visa programs being heavily abused by alien smugglers also probably are being exploited by the Chinese to place both active and "sleeper" agents in the United States, particularly in California's Silicon Valley.

The sources also say that some "legitimate" Chinese companies that have been found abusing the programs originally were set up with Chinese government money. Their suspicions of an espionage connection between Chinese intelligence and alien smugglers recently has been heightened because of the involvement of Beijing officials with the alien smugglers. The officials help arrange documents the smugglers need for the U.S. visa applications. "We are wide open" says a source.

During the May 6 heating, none of the nine administration officials who testified raised the espionage fear but they made it clear that visa fraud is rampant. Thousands of marginally qualified or completely unqualified applicants are finding their way into the United States. The officials highlighted visa fraud being organized by Russian underworld figures and alien smugglers in India and China.

"In China, the method of operation has remained fairly consistent for more than a decade" said retired consular official John Ratigan. Sham companies set up in China and the United States provide documents for workers they say they need. The companies exist only on paper and the workers are not qualified for the jobs they are being let into the United States to undertake.

The scale of the abuse of the business-visa system has some officials saying that little can be done to stop the fraud. Under-staffing means investigations can't be mounted. A January 1997 Justice Department intelligence summary obtained by news alert! estimated that, in 1996, 55 percent of all L-1 visa petitions received by the Immigration and Naturalization Service, or INS, in California were fraudulent. According to the report Great Wall of Deception, "The L-1 visa is a convenient, legal and safe avenue to smuggle people into the United States, the increasingly preferred ticket of choice."

The report detailed dozens of phony Chinese subsidiary companies guilty of visa fraud and various scams used to set up these firms. It noted the INS is being "victimized" by the "old shell game" adding: "Numerous paper companies, through a series of fraud, provide one another with phony sales invoices, business contracts, and other documents that give the appearance of legitimate business activities." When rare site checks of these firms are conducted, investigators find: "a flea-bag motel, a residential home, an immigration consultant's office, a legitimate company that allows Chinese subsidiary companies to use their address, or simply an office that is used as a drop location."

The INS in California receives the largest number of fraudulent petitions from Chinese smugglers. The American consulate in Beijing has advised the INS that it does not have the manpower or resources to keep up with the number of suspicious filings and to investigate them.