Feds: 3 collected millions in Visa fraudulent school scheme
Feds: 3 collected millions in fraudulent school scheme
By Michael Martinez and Paul Vercammen, CNN
Updated 6:20 PM ET, Wed March 11, 2015
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Federal agents raid California colleges accused of operating a "pay to stay" scheme.
Story highlights
- CNN accompanies federal raid, finds school abandoned, resembling movie set
- The three defendants collected as much as $6 million in annual tuition from about 1,500 students
- Students largely came from South Korea and China, feds say
Los Angeles (CNN)Three area residents were arrested and charged Wednesday for allegedly operating four Southern California schools for Korean and Chinese students who never attended classes and lived in other states on student visas in a "pay-to-stay" scheme.
The three educators collected as much as $6 million in annual tuition from an enrollment of about 1,500 foreign students who were largely from South Korea and China, said federal prosecutors.
The arrests came after a federal grand jury indicted the three defendants Tuesday on charges of conspiracy to commit immigration fraud, money laundering and other immigration offenses.
An allegation in the indictment would also require the defendants to forfeit property and proceeds derived from the fraudulent scheme, authorities said.
Hee Sun Shim, 51, of Beverly Hills, is the owner and manager and of the post-secondary schools and is charged with 13 counts of use or possession of an immigration document procured by fraud, authorities said.
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Federal agents raided four California schools accused of operating a "pay-to-stay" scheme bringing students from Korea and China to the United States.
The two other defendants are each charged with one count of that same offense: They are Hyung Chan Moon, also known as Steve Moon, 39, of Los Angeles who assisted in the operation and management of the schools, and Eun Young Choi, also known as Jamie Choi, 32, of Los Angeles, a former employee who also assisted in the operation and management of the school.
Shim, who also went by Leonard Shim and Leo Shim, is also charged with three counts of encouraging illegal residence, as well as two counts of money laundering, prosecutors said.
The three defendants and their attorneys couldn't be immediately reached for comment Wednesday.
Schools helped students with visas
"Immigration fraud schemes potentially compromise national security and cheat foreign nationals who play by the rules," Acting United States Attorney Stephanie Yonekura said in a statement.
"In this case, officials at several schools allegedly abused their responsibility to ensure that only legitimate foreign students were allowed to the stay in the country. This type of fraud against the United States will be thoroughly examined to bring those responsible to justice and to protect the integrity of our immigration system," the federal prosecutor said.
Three of the schools are in Los Angeles' Koreatown neighborhood: Prodee University/Neo-America Language School; Walter Jay M.D. Institute, an Educational Center (WJMD); and the American College of Forensic Studies (ACFS), authorities said.
The fourth school is currently operating in Alhambra, California: Likie Fashion and Technology College, authorities said.
Raid reveals empty school
"What we've broken up is a pay-to-stay scheme," said Claude Arnold, special agent in charge of the Los Angeles office of U.S. Immigration and Customs Enforcement.
"That's a scheme where institutions purport to be schools, but are really not doing any education whatsoever," Arnold said.
Prodee University/Neo-American Language School was located on the fifth floor of a Los Angeles office tower near the Koreatown neighborhood, but federal agents found the school "abandoned" during their raid on Wednesday. The agents allowed CNN to accompany them.
The school featured classrooms, administrative offices and a small library, but no one occupied the spaces.
In fact, the abandoned school brought to mind a movie set, filled with props and decorations, but no actors.
In one small room, a CD player serenaded empty desks with classical music. The tiny library featured USC and UCLA pennants. The television wasn't even plugged in. One federal agent said many of the students listed on the school rolls were older, in their 30s, 40s and 50s.
Prodee's 2011-2012 catalog describes the facility as an English as second language school and states "It is our mission that all students be able to flourish in their ability to use and understand English in all facets of life by providing a top quality ESL educational environment," according to a copy of the document on the website of the California Bureau for Private Postsecondary Education.
"Our enthusiastic and qualified instructors concern themselves with teaching a rigorous, but innovative curriculum of interactive and beneficial courses and materials leading to higher TOEFL scores and admission to U.S. colleges and universities," the catalog says.
Another document with the state bureau indicates Prodee had a 73% graduation rate in 2011 and a 60% rate in 2010.
But the indictment alleges that students actually lived Nevada, Texas, Washington state, and Arizona.
Student visas
The schools were authorized by the federal government to issue a document that certified a foreign student had been accepted to a school and would be attending classes full-time in the United States, authorities said. The document made a student eligible for a F-1 student visa.
During their investigation, authorities interviewed 35 students, mainly from South Korea, and found none resided in Los Angeles, officials said.
The conspiracy count carries a maximum prison sentence of five years. The immigration fraud charges each carry up to 10 years in prison, and the money laundering charges carry a potential penalty of 20 years, authorities said.
An earlier federal raid about visas
Wednesday's arrests follow last week's federal raids of more than three dozen "maternity hotels" in Southern California where foreign women give birth, allegedly for the sole purpose of having a U.S.-citizen baby, authorities said.
The "maternity tourism" sites included apartment complexes in Los Angeles, Orange and San Bernardino counties where authorities believe the businesses housed the foreign nationals about to give birth, federal officials said.
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Federal agents raid 'maternity hotels' 01:44
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Those targeted residences are believed to have catered largely to women from China, who paid $15,000 to $50,000 for lodging, transportation and food, according to a statement by U.S. Immigration and Customs Enforcement.
Those fees don't necessarily include medical care, authorities said.
Specifically, authorities in the maternity tourism raids obtained search warrants for 37 location and conducted searches at more than 50 locations, including sites that consented to a federal search, said Virginia Kice, a spokeswoman for U.S. Immigration and Customs Enforcement.
http://www.cnn.com/2015/03/11/us/cal...nese-students/
Feds allege major immigration fraud in L.A. trade schools
March 11, 2015
By Joseph Serna
Authorities arrested the operators of four Los Angeles-area trade schools for allegedly running an elaborate “pay-to-stay” scam in which foreign nationals used student visas to stay in the United States without actually going to school.
The schools appear to have tapped the booming Asian immigration population in Koreatown and the San Gabriel Valley. Authorities say the suspects took in $6 million a year in tuition payments.
Hee Sun Shim, 51, of Beverly Hills; Hyung Chan Moon, 39; and Eun Young Choi, 35, were named in a 21-count indictment returned by a federal grand jury Tuesday.
Authorities say Shim operated three schools in Koreatown and a fourth in Alhambra that enrolled hundreds of foreign nationals in their schools so they could remain in the country knowing the students had no plans of attending.
The schools identified by investigators were Prodee University/Neo-America Language School; Walter Jay M.D. Institute; an Educational Center and the American College of Forensic Studies and Likie Fashion and Technology College in Alhambra.
"Officials at several schools allegedly abused their responsibility to ensure that only legitimate foreign students were allowed to the stay in the country," said Acting United States Attorney Stephanie Yonekura in a statement. "This type of fraud against the United States will be thoroughly examined to bring those responsible to justice and to protect the integrity of our immigration system.”
Shim, Moon and Choi were arrested by immigration agents and are expected to be arraigned Thursday. Their charges include conspiring to commit immigration fraud, money laundering and encouraging illegal residence.
The arrests were the culmination of a four-year probe by Homeland Security Investigations.
The men’s scam was discovered when agents with Homeland Security’s Student and Exchange Visitor Program made a surprise visit to Prodee University’s main campus on Wilshire Boulevard in Koreatown. The school had more than 900 students enrolled on its books, but officials say they found only three students in a single English-language class.
A surprise check at American College of Forensic Studies had a similar result, authorities said. Investigators found one student in one religion class though 300 foreign students were considered “active” at the school.
The key to the scam was an immigration document that allows shows a foreign national has been accepted into a government-certified school and will be attending it full time. The “students” paid up to $1,800 for six month’s “tuition”to the men so they would appear to be enrolled and could remain in the United States, authorities said.
The men allegedly faked school transcripts and other student records, including school transfer papers when authorities questioned the length of a student’s stay.
Authorities said they plan to have each university’s Student and Exchange Visitor Program certification withdrawn. Students enrolled in the schools have to reach out to exchange program officials to determine what to do next, the U.S. Attorneys Office said.
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