Fake schools draw scrutiny of federal investigators

Associated Press

January 25, 2015

In this photo taken Jan. 19, 2011, is the entrance to Tri-Valley University in Pleasanton, Calif. Tri-Valley is among at least half a dozen schools shut down or raided by federal authorities in recent years over allegations of immigration fraud. Investigators say Tri-Valley was among the largest school fraud scams they have encountered, involving hundreds of mostly Indian nationals living in cities as far away from Pleasanton as Miami, Chicago and Honolulu.

SAN FRANCISCO - From her hometown in India in 2010, Bhanu Challa said she had no reason to doubt that Tri-Valley University was a legitimate American school where she could pursue a master's degree. Its website featured smiling students in caps and gowns and promised a leafy campus in a San Francisco Bay Area suburb.

Months later, her hands were in cuffs as federal investigators questioned her motives for being in the U.S. Authorities told her that Tri-Valley was a sham school. It was selling documents that allowed foreigners to obtain U.S. student visas, and in some cases work in the country, while providing almost no instruction, according to federal investigators.

"I was blank, totally blank ...," she said, recalling her shock. "I didn't know what to do, who I could approach."

Tri-Valley is among at least half a dozen schools shut down or raided by federal authorities in recent years over allegations of immigration fraud. Like Tri-Valley, they had obtained permission from U.S. immigration officials to admit foreign students.

But most offered little or no instruction or didn't require all students to attend classes, instead exploiting the student visa system for profit, investigators said.

"If there's a way to make a buck, some people will do it," said Brian Smeltzer, chief of the Counterterrorism and Criminal Exploitation Unit of U.S. Immigration and Customs Enforcement's Homeland Security Investigations.

Last year alone, Smeltzer said, his office flagged about 150 of the roughly 9,000 schools certified to accept foreign students for investigation as potential visa mills.

Meltzer said many of the schools the agency investigates are in California, which has the highest number of foreign students and schools certified to accept them. New York has the second most.

Government watchdogs say the recent visa fraud cases have exposed gaps in ICE's oversight of schools that admit foreign students a problem the agency says is being corrected. And experts say the scams hurt the reputation of the U.S. higher education system, which currently enrolls about 900,000 foreign students.

"If anybody has any illusions there was one just bad apple, that's not the case," said Barmak Nassirian, director of federal policy analysis with the American Association of State Colleges and Universities. "There are plenty of them out there."

At California Union University in Fullerton, owner Samuel Chai Cho Oh staged phony graduation ceremonies as part of a visa scheme, according to immigration officials. He pleaded guilty to visa fraud and money laundering and was sentenced to a year in prison in 2011.

At College Prep Academy in Duluth, Georgia, president Dong Seok Yi conspired to enroll some women with the understanding they would not attend classes, but work at bars, prosecutors alleged. He was convicted of immigration document fraud and sentenced last year to 21 months in prison.

Investigators say Tri-Valley, with more than 1,000 students, many Indian nationals, was among the largest school fraud scams they have encountered. The school's founder and president, Susan Xiao-Ping Su, used more than $5.6 million she made in the scam to buy commercial real estate, a Mercedes Benz and multiple homes, federal prosecutors said.

She was sentenced in October to 16 years in prison after a conviction on visa fraud and other charges. The school is now closed.

The Tri-Valley case also sparked protests in India, where officials objected to U.S. authorities placing ankle monitors on former students. Investigators say they believe some students were cheated out of an education, but others were happy to be in the U.S. whether they learned much or not.

Jerry Wang, CEO of another San Francisco Bay Area school, Herguan University in Sunnyvale, is also facing visa fraud charges. Prosecutors say he provided federal officials with false employment information about students, transcripts and a letter purporting to show another school accepted Herguan's credits. He has pleaded not guilty, and the school remains open.

His attorney, James Brosnahan, said the allegations against his client are completely untrue. "It is a very real university," he said, noting that it recently was accredited by the Accrediting Council for Independent Colleges and Schools.

The organization confirmed that the school was accredited.

To be certified by immigration officials to accept foreign students, schools must be accredited by a Department of Education-approved organization or have their courses accepted by at least three accredited schools.

A 2012 Government Accountability Office report said ICE was not always verifying letters purporting to show the school's courses were accepted elsewhere. It also said ICE was failing to analyze schools for patterns pointing to fraud. The agency now verifies every school credit letter and has developed a tool to assess the seriousness of any school violations.

"We've put in a greater system of checks and balances," said Carissa Cutrell, a spokeswoman for Homeland Security Investigations' Student and Exchange Visitor Program.

At Tri-Valley, Challa said she paid nearly $3,000 for her first semester, but never received an assignment or an exam. She was unhappy that she wasn't learning and was taking steps to transfer when the school was raided in 2011. She later completed her MBA and is now working in the U.S.

"I had to pursue my studies here, I had to get a job," she said. "I was the first person in my family to come to the U.S."