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entitled 'Immigration Benefits: Additional Controls and a Sanctions 
Strategy Could Enhance DHS's Ability to Control Benefit Fraud' which 
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United States Government Accountability Office: 

March 2006: 

GAO: 

Report to Congressional Requesters: 

Immigration Benefits: 

Additional Controls and a Sanctions Strategy Could Enhance DHS's 
Ability to Control Benefit Fraud: 

GAO-06-259: 

GAO Highlights: 

Highlights of GAO-06-259, a report to congressional requesters: 

Why GAO Did This Study: 

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? 

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: 

[See PDF for image] 

[End of figure] 

What GAO Recommends: 

To enhance DHS’s efforts to control benefit fraud, GAO recommends that 
USCIS implement additional internal controls and best practices to 
strengthen its fraud control environment and that DHS develop a 
strategy for implementing a sanctions program that includes a mechanism 
for assessing their effectiveness and that considers the costs and 
benefits of sanctions, including their deterrence value. DHS generally 
agreed with 4 of the 6 recommendations but cited actions indicating it 
has addressed GAO’s other 2 recommendations. GAO believes that 
additional actions are needed. 

www.gao.gov/cgi-bin/getrpt?GAO-06-259. To view the full product, 
including the scope and methodology, click on the link above. For more 
information, contact Paul L. Jones at (202) 512-8777 or 
jonespl@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

Fraud Is A Serious Problem, But Its Full Extent Is Unknown: 

Although USCIS Has Taken Steps to promote Fraud Control, Additional 
Controls and Best Practices Could Improve Its Ability to Detect Fraud: 

Most Benefit Fraud Is Not Criminally Prosecuted, but DHS Does Not Have 
an Administrative Sanctions Program: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments and Our Evaluation: 

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: 

Figure 2: Immigration Benefit Fraud Detection and Referral Process: 

Figure 3: Internal Control Environment: 

Abbreviations: 

AICPA: American Institute of Certified 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: 

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.[Footnote 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.[Footnote 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.[Footnote 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? 

(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 Office of Fraud Detection and 
National Security 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[Footnote 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 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. 

Results In Brief: 

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 
risk-based 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. Available data from the first half of fiscal year 2005 
about the number of applications denied for fraud compared with the 
number of investigations indicates that most immigration fraud detected 
by USCIS does 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 
cost-benefit 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 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. 

Background: 

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: 

[See PDF for image] 

[End of figure] 

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.[Footnote 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 8 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. 

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.[Footnote 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 (FDUs) at all four USCIS 
service centers and the National Benefits Center.[Footnote 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 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 
(BFUs) 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 
which 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: 

[See PDF for image] 

[End of figure] 

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 2 
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 adjudication process. The Department of State is 
responsible for approving 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. 

Fraud Is A Serious Problem, But Its Full Extent Is Unknown: 

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 fiancée 
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 fiancé 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 one 
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 
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 canceled 
or withdrawn, 54 percent (about 130,000) contained false--possibly 
fraudulent--information.[Footnote 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.[Footnote 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.[Footnote 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 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, 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.[Footnote 11] 
According to the Citizenship and Immigration Services Ombudsman's 
fiscal year 2004 and 2005 annual 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 drivers' 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.[Footnote 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. 

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.[Footnote 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 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. 

Figure 3: Internal Control Environment: 

[See PDF for image] 

[End of figure] 

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[Footnote 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 
strategic approach to combating fraud that also includes evaluating the 
effectiveness of sanctions. 

Consistent with Internal Control Standards and Fraud Control Best 
Practices, USCIS Has Established a Fraud Focal Point, Related 
Strategies and a Fraud Assessment Program: 

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; 

* oversee and enhance policies and procedures pertaining to the 
enforcement of law enforcement background checks on those applying for 
immigration benefits; 

* identify and evaluate vulnerabilities in the various policies, 
practices and procedures which threaten the legal immigration process; 

* recommend solutions and internal controls to address these 
vulnerabilities; and 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 (FDUs) 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 to work directly with adjudicators at the service 
centers and district offices in the task of identifying potential fraud 
and, to some extent, verifying 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.[Footnote 15] FDNS field staff then attempted to verify 
whether key 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.[Footnote 16] As of December 2005, FDNS planned to 
initiate two other assessments in January 2006 and another at a later 
time.[Footnote 17] 

Additional Internal Controls and Use of Other Best Practices Could 
Further Improve USCIS's Ability to Detect Benefit Fraud: 

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 and FDNS 
staff have access to important information, and (5) performance goals 
related to fraud prevention. 

USCIS Has Not Adopted a Comprehensive Risk Management Approach to Help 
Guide Its Fraud Control Efforts: 

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. 

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).[Footnote 18] 

FDNS fraud assessments are an initial step toward adopting a risk 
management approach. However, FDNS has no 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 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.[Footnote 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 Internal Revenue 
Service.[Footnote 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.[Footnote 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 service-related 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.[Footnote 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 receives 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 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[Footnote 23] 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.[Footnote 24] Using 
more comprehensive risk information to evaluate policies that represent 
trade-offs 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 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 our draft report, DHS stated that 
there is a proposed regulatory change that would clarify USCIS's 
ability to withhold the adjudication of an application for employment 
authorization pending an ongoing investigation. 

USCIS Lacks a Mechanism to Ensure That Ongoing Monitoring Occurs in the 
Course of Normal Operations: 

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 
our draft 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,[Footnote 25] 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.[Footnote 26] 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.[Footnote 27] 

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.[Footnote 28] 
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. 

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. 

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.[Footnote 29] 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 2-day 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 no standard 
training regarding fraud trends and that fraud-related training varied 
across field offices. In commenting on our draft report, DHS stated 
that FDNS has created a Website that includes relevant policy 
memoranda, fraud trends, lessons learned and a number of other tools to 
aid adjudication officers. 

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 review, 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 our draft 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 someone 
who has filed for an immigration benefit is connected to any ongoing 
ICE criminal investigation. 

DHS Lacks Performance Goals for USCIS's Antifraud Efforts: 

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 long- 
term 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 six 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 
long term 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 
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' 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. 

MOST Benefit FRAUD IS NOT CriminalLY ProsecutED But DHS Does Not Have 
an Administrative Sanctions PROGRAM: 

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, 
only 598, about 26%, were accepted by the BFUs. Neither USCIS nor ICE 
was able to provide 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.[Footnote 30]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.[Footnote 31] 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 permanent injunction against the procedures used 
by INS to institute civil document fraud charges under the 
INA.[Footnote 32] 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. 

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.[Footnote 33] However, without a 
strategy which 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. 

Conclusions: 

In light of competing organizational priorities, institutionalizing 
fraud detection--such 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 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 determine the status of fraud referrals could help 
them make timely and informed 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. 

Recommendations For Executive Action: 

In order to enhance USCIS's overall immigration benefit fraud control 
environment, we recommend that the Secretary of Homeland Security 
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: 

Enhance its risk management approach by (1) expanding its fraud 
assessment program to cover more immigration application types; and (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. 

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. 

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. 

Provide USCIS 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. 

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. 

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: 

Develop a strategy for implementing a sanctions program that includes 
mechanisms for assessing their effectiveness and for determining their 
associated costs and benefits, including their deterrence value. 

Agency Comments and Our Evaluation: 

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 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 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/or plans to take action to implement four 
of our six recommendations, but 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 USCIS 
believes that benefit fraud assessments currently underway do provide a 
comprehensive risk analysis to identify vulnerabilities and measures to 
mitigate such vulnerabilities. While we agree that some of the actions 
FDNS has taken with regard to the specific fraud assessments contain 
elements of risk assessment and mitigation measures, a risk management 
approach that is consistent with the framework that we advocate in 
order for agencies to have a solid risk-based foundation to make 
resource allocation and other operational decisions would include a 
more comprehensive and systematic treatment of threat and consequence 
as part of USCIS's risk analysis. Moreover, we have not seen evidence 
that USCIS intends to use the results of risk analysis as 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 agreed that 
additional output and outcome based performance goals and measures are 
needed. 

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. 

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. As examples of USCIS's 
focus on the integrity of USCIS data and processes, DHS cited the 
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. Although USCIS 
management believes these efforts clearly 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 adjudications staff. Therefore, we continue to believe that 
clearly communicating the importance of fraud prevention and guidance 
on how USCIS staff are to balance the fraud prevention and service 
oriented objectives is needed. 

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 cited meetings that FDNS leadership had with a U.S. 
Attorneys Office regarding vulnerabilities in the asylum process and 
FDNS participation in various task forces that allows for the sharing 
of information. Although these are all positive efforts, USCIS does not 
have a mechanism in place to ensure that such information is 
consistently gathered from all relevant sources and fed back to FDNS. 
Therefore, we continue to believe that USCIS needs to establish a 
mechanism, memorialized in policies and procedures, which would ensure 
that information about fraud vulnerabilities uncovered by USCIS staff 
and related agencies feeds back to FDNS. 

As agreed with your offices, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the date of this letter. At that time, we will send 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. 

If you or your staff have any questions concerning this report, please 
contact me at (202) 512-8777 or Jonespl@gao.gov. 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 II. 

Signed by: 

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 FDNS's 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 2 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 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 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 
the adjudicators. We also visited USCIS district offices in Dallas and 
Boston responsible for coordinating their fraud referrals with two of 
the 4 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 ICE's Identity and Benefit Fraud Unit in 
Washington, D.C. and those agents assigned to BFUs 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 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. 

[End of section] 

Appendix II: Comments from the Department of Homeland Security: 

U.S. Department of Homeland Security: 
Washington, DC 20528: 

March 1, 2006: 

Homeland Security: 
Mr. Paul L. Jones: 
Director: 
Homeland Security and Justice Issues: 
U.S. Government Accountability Office: 
441 G Street, N.W. 
Washington, D.C. 20548: 

Dear Mr. Jones: 

We appreciate the opportunity to comment on the Government 
Accountability Office's (GAO) draft report entitled "Immigration 
Benefits: Additional Controls and a Sanctions Strategy Could Enhance 
DHS's Ability to Control Benefit Fraud" GAO-06-259. It generally 
provides 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, the report does not fully portray how the 
Department of Homeland Security (DHS) has been addressing anti-fraud 
since its inception on March 1, 2003. 

U.S. Citizenship and Immigration Services (USCIS) used the GAO Report, 
Immigration Benefit Fraud: Focused Approach is Needed to Address 
Problems, GAO-02-66, January 31, 2002, as the foundation to build its 
anti-fraud effort with the establishment of the Office of Fraud 
Detection and National Security (FDNS). Development of this program 
started in 2003, FDNS was officially created in May 2004 and FDNS 
Immigration Officers were deployed to the field in January 2005. 
Although it is still a new and developing program, USCIS is on the 
right track with respect to creating an effective anti-fraud program. 
To date, it has established a joint benefit fraud strategy with U.S. 
Immigration and Customs Enforcement (ICE), created the necessary 
organizational crosswalks, developed policies and procedures, and 
implemented a strategy for conducting benefit fraud assessments. 

The GAO found the establishment of FDNS as a focal point for dealing 
with immigration benefit fraud, a strategy for detecting immigration 
benefit fraud and the initiation of a series of benefit risk assessment 
were good starts for an effective anti-fraud program. However, the GAO 
concluded that USCIS needed to address some aspects of internal control 
standards and fraud control best practices identified by leading audit 
organizations. For example, the GAO found the program does not provide 
a basis for the type of comprehensive risk analysis advocated in the 
GAO Standards for Internal Control in the Federal Government. USCIS 
believes that benefit fraud assessments currently underway do provide a 
comprehensive risk analysis to identify vulnerabilities and measures to 
mitigate such vulnerabilities. No such assessments have ever before 
been conducted of the immigration benefit processes. The GAO suggests 
that FDNS' assessments do not draw on all available sources of 
strategic threat information. FDNS performs systems checks in all 
available enforcement systems, and deconflicts suspected fraud targets 
with ICE. To facilitate this, ICE has a supervisory special agent 
collocated with headquarters FDNS and a senior special agent at each 
Service Center Fraud Detection Unit. FDNS also meets regularly with 
ICE's Identity and Benefit Fraud Unit; has an Intelligence Research 
Specialist detailed to ICE's Office of Intelligence, DHS's Operations 
Center, and the Terrorist Screening Center. The FDNS Director sits on 
the DHS Assistant Secretary of Intelligence and Analysis Intelligence 
Council. FDNS' Chief of the National Security Branch sits on DHS's 
Homeland Security Terrorist Threat Intelligence Group, along with other 
agency chiefs and assistant directors. FDNS also has ongoing 
communication with ICE's National Security Threat Protection Unit, and 
is about to implement a joint religious worker fraud initiative focused 
on identifying systemic flaws/national security risks in the Religious 
Worker Program. These interagency anti-fraud and national security 
efforts are also unprecedented. 

In addition, the ongoing benefit fraud assessments are addressing 
benefit types considered "high risk." They were chosen because the 
application/petition either provided evidence of permanent resident 
status, were the basis for applying to obtain permanent resident 
status, or provided long-term employment based non-immigrant visas. In 
addition, these benefit types were selected because the 9/11 Commission 
Report identified marriage fraud as a major target of terrorists aimed 
at embedding themselves in the United States, and because GAO, in 
separate reports, documented the existence of significant fraud among 
religious workers and inter-company transferees. Given existing 
resources, it is not possible to conduct assessments on all benefit 
types within the first years of operation. However, FDNS intends to 
conduct assessments on an ongoing basis and will expand them to include 
additional benefit types. 

The GAO suggests that USCIS is not effectively addressing temporary 
work authorizations provided to applicants who have to wait more than 
90 days for their applications to be processed. This is not a simple 
issue. Applications for employment authorization are typically 
ancillary applications tied to a "parent" application - for example, 
they are filed in conjunction with an application for adjustment of 
status based on an employment based petition. The fraud is not 
typically found on the application for employment authorization - 
rather, it is based in the underlying "parent" application/petition. 
Therefore, the best course of action is to address the problem at the 
source - i.e. the petition. Addressing the problem at the employment 
authorization application stage would not adequately address the 
problem. Further, the interim employment authorization is necessary 
because it is not possible to detect fraud and resolve all background 
check processes in all cases based on existing technology in 90 days. 
However, there is a proposed regulatory change that would clarify 
USCIS' ability to withhold the adjudication of an application for 
employment authorization pending an ongoing investigation. 

The GAO also found that USCIS 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. FDNS is currently developing 
its back-end processes, which include sharing information/lessons 
learned from routine operations and addressing shortcomings. For 
example, all fraud leads are entered into the FDNS-Data System. That 
information will be compared against incoming receipts in order to 
identify any new applications/petitions filed by individuals or 
companies who have previously filed fraudulent applications/petitions. 
In addition, current policy requires an "after action" report to be 
completed for all major conspiracy cases. This report summarizes the 
results and findings of the case, including information such as 
statistics on how many people were denied benefits due to fraud, which 
factors led to approvals of some cases, how the information can be used 
in the future to identify fraudulent files, and best practices learned 
during the process. Finally, FDNS is actively engaged with ICE and the 
Departments of Labor and State on the formation of inter-agency benefit 
fraud task forces. One of the purposes of such is to share information, 
including systems access, lessons learned; decide on joint operations, 
etc. 

The GAO further concluded that ICE and USCIS lacked a mechanism to 
share information related to the status of fraud investigation 
referrals from USCIS. Per a February 14, 2006, Memorandum of Agreement, 
ICE will accept or decline a referral from USCIS within 60 days. If the 
case is accepted for criminal investigation, ICE is required to provide 
a status report if and when the investigation is approaching one year. 
The Memorandum of Agreement requires ICE to provide USCIS with a case 
closure report upon completion of the investigation. USCIS is in the 
process of developing an ICE tab in the FDNS-Data System, which ICE 
will use to provide information regarding pending referrals/ 
investigations. 

To support its finding that USCIS also lacked a mechanism to share 
information with other external entities, GAO cited a recent memorandum 
from the U.S. Attorney of the Eastern District of Virginia. This 
memorandum referenced weaknesses in the asylum process that allowed 
ineligible aliens to obtain asylum and recommended procedural 
improvements to the asylum process. USCIS' Asylum Division and the 
Arlington Asylum Office worked closely with FDNS and the U.S. 
Attorney's Office throughout this investigative process, which 
ultimately yielded 26 criminal indictments. As partners in the 
investigative process, USCIS also learned a number of lessons in that 
case, and is developing a plan-of-action to work with other DHS 
entities and the Executive Office for Immigration Review to respond to 
the U.S. Attorney's specific recommendations. In fact, USCIS had 
already begun to implement several of the recommendations prior to the 
investigation. USCIS senior leadership, which included the Director, 
FDNS, and the Acting Chief Counsel, met with the Assistant U.S. 
Attorney to discuss lessons learned during this and other recent 
prosecutions. Guidance to USCIS officers will result from this meeting. 
FDNS is also a member of the Inter-agency Immigration Benefits Fraud 
Task Force led by this U.S. Attorney's Office. The San Francisco Asylum 
Task Force, the Los Angeles Asylum Fraud Working Group, and the New 
York-New Jersey Asylum Anti-Fraud Task Force also include in their 
membership USCIS Asylum Offices, FDNS and U.S. Attorney's Offices in 
those respective regions. All four task forces have demonstrated 
success in sharing information and otherwise collaborating to prevent 
asylum fraud. 

Finally, the GAO concluded that DHS should develop a strategy for 
sanctioning fraud as well as evaluating the effectiveness of 
administrative type sanctions. Although DHS will explore this as part 
of its overall prevention strategy in detecting, deterring and 
mitigating threats to our homeland, we believe the process established 
by USCIS and ICE creates an effective deterrent. Once fraud is 
validated, the application/petition is denied for fraud, the case is 
entered into the FDNS-Data System to be compared against incoming 
receipts to identify any and all future applications or petitions that 
may be filed, a look-out is posted in law enforcement systems and the 
alien is placed in removal proceedings. 

The GAO recommended the Secretary of Homeland Security direct the 
Director of USCIS to implement additional internal controls and best 
practices to strengthen its fraud control environment. We have 
addressed each of the five specific recommendations as follows: 

Enhance its risk management approach by (1) expanding its fraud 
assessment program to cover more immigration application types; (2) 
fully incorporating threat and consequence assessment into its fraud 
assessment activities; and (3) using risk analysis to evaluate 
management alternatives to mitigating identified vulnerabilities. 

As discussed above, USCIS plans to expand the benefit fraud assessment 
to incorporate more immigration benefit types and will continue to 
incorporate threat and consequence assessments into its analysis. Such 
assessments and analyses will be used to mitigate vulnerabilities 
found. 

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. 

Such a feedback loop is already within the process. For example, from 
the benefit fraud assessment of religious worker petitions, FDNS 
recommended a site check be conducted for all petitions. In addition, 
USCIS is developing regulatory changes to mitigate vulnerabilities in 
the process. Further cooperation with the U.S. Attorney discussed above 
is another example of this ongoing process. 

Communicate clearly the importance of USCIS' 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. 

USCIS leadership clearly advocates balancing objectives related to 
timely and quality processing of immigration benefits with emphasis on 
national security. FDNS would not have been created if senior 
leadership did not believe national security and fraud detection were a 
high priority. USCIS adjudicators now have a chain of command in place 
within USCIS to use when fraud is suspected. In November 2005, FDNS 
hosted a national conference for all immigration officers and 
intelligence research specialists to address key objectives and 
priorities, lessons learned during the first year of operations, needed 
adjustments, and mid-to long-term plans. Finally, to ensure continued 
focus on national security, the new USCIS Director moved FDNS from 
Domestic Operations, where it had been organizationally situated and 
placed it in a third directorate focused on integrity of USCIS data and 
processes, that reports directly to the Deputy Director. This allows 
FDNS to provide focus and guidance to all USCIS operations. 

Provide USCIS 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 the status of fraud referrals to ICE and ongoing updates 
regarding fraud trends and other information related to fraud 
detection. 

FDNS has created a website that includes relevant policy memos, 
standard operating procedures, success stories relating to 
prosecutions, fraud trends, lessons learned and a number of other tools 
to aid officers in the performance of their duties. The website lists 
an email address which employees can use to seek and/or report 
information to FDNS. The Fraud Detection Unit at the National Benefits 
Center created a website which contains information regarding recent 
fraud patterns involving legalization applications. USCIS has 
incorporated FDNS in its Basic and Journeyman level adjudicator 
training at the Immigration Officer Academy and is initiating training 
for non-FDNS supervisory adjudication officers. Finally, USCIS is 
planning to provide selective access to the Department of State's 
Consolidated Consular Database and other open source databases; 
however, this policy needs to be based on an approach that balances 
productivity with integrity. 

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. 

FDNS has created performance goals for the number of benefit fraud 
assessments conducted during the fiscal year and the number of 
recommended policy, procedural, and regulatory changes that resulted 
from the findings. FDNS agrees additional output and outcome based 
performance goals and measures are needed. 

The GAO also recommended the Secretary of Homeland Security direct the 
Director of USCIS and the Assistant Secretary of ICE to develop a 
strategy for implementing a sanctions program that includes mechanisms 
for assessing its potential effectiveness and associated cost and 
benefit, including deterrence values. As discussed above, DHS believes 
the current process creates a more effective deterrent than an 
administrative sanctions program. In some cases, FDNS' administrative 
approach is even more of a deterrent than criminal prosecution. 
However, DHS will study the costs and benefits for an administrative 
sanctions program related to immigration benefit fraud. 

We thank you again for the opportunity to provide comments on this 
draft report and look forward to working with you on future homeland 
security issues. 

Sincerely, 

Signed by: 

Steven J. Pecinovsky: 
Director: 
Departmental GAO/OIG Liaison Office: 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

GAO Contact: Paul L. Jones, (202) 512-8777: 

Staff Acknowledgements: 

In addition to the above, Joel Aldape, David Alexander, Jenny Chanley, 
Frances Cook, Michael P. Dino, Nancy Finley, Carlos Garcia, Kathryn 
Godfrey, Larry Harrell, and David Nicholson were key contributors to 
this report. 

FOOTNOTES 

[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] 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. 

[4] GAO, Standards for Internal Control in the Federal Government, GAO/ 
AMID-00-21.3.1 (Washington, D.C.: November 1999) 

[5] USCIS also employed an additional 1,475 adjudicators on a temporary 
basis to support its backlog reductions efforts. 

[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. 

[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. : September 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. 

[11] 8 C.F.R. § 274a.13(d). 8 CFR § 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. § 274a.13(d) provides 
that such period shall not exceed 240 days in the case of an interim 
authorization. 

[12] 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. 

[13] U.S. General Accounting Office, Strategies to Manage Improper 
Payments, Learning from Private Sector Organizations, GAO-02-69G 
(Washington, D.C.: October 2001). 

[14] Excerpt from Statement on Auditing Standards, No. 99, 
Considerations of Fraud in a Financial Statement Audit. 

[15] 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. 

[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 six-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. 

[18] 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). 

[19] 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. 

[20] See GAO, Taxpayer Information: Options Exist to Enable Data 
Sharing between IRS and USCIS but Each Presents Challenges, GAO-06-100 
(Washington, DC: Oct. 11, 2005). 

[21] Currently, personal interviews are conducted only for certain 
applications and only in USCIS's district offices. 

[22] See GAO-06-20Improvements Needed to Address Backlogs and Ensure 
Quality of Adjudications, GAO-06-20 (Washington D. C.: November 2005). 

[23] 8 C.F.R. § 274a.13(d). 8 CFR § 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. § 274a.13(d) provides 
that such period shall not exceed 240 days in the case of an interim 
authorization. 

[24] See GAO, Immigration Benefits, Several Factors Impede Timeliness 
of Application Process, GAO-01-488 (Washington D.C.: May 2001). 

[25] 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. 

[26] A February 2005 memorandum of agreement between USICS and ICE 
requires ICE to submit a report 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 other sources, such as other ICE investigations or other 
agencies. 

[27] 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. 

[28] 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. 

[29] USCIS initial adjudicator training provides approximately 4 hours 
of fraud-related training that focuses primarily on detecting 
fraudulent documents during 6 weeks of training. 

[30] Immigration fraud can also be criminally prosecuted under other 
federal statutes. 

[31] 8 U.S.C. §§1324 c (a), (d); 1154 (C). 

[32] Walters v. Reno, 145 F.3d 1032 (9TH Cir. 1998). 

[33] Pub. L. No. 109-13, div. B, § 404(a), 119 Stat. 302, 319-20 
(amending 8 U.S.C. § 1184(c)). 

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