FRAUD SUMMARY - CIUDAD JUAREZ - MARCH THROUGH AUGUST 2009

UNCLAS SECTION 01 OF 06 CIUDAD JUAREZ 000516 SIPDIS DEPT FOR CA/FPP, DEPT FOR KCC WILLIAMSBURG KY, DHS FOR CIS/FDNS E.O. 12958: N/A TAGS: KFRD CVIS CPAS CMGT ASEC MX SUBJECT: FRAUD SUMMARY - CIUDAD JUAREZ - MARCH THROUGH AUGUST 2009 REF: (A) MEXICO 2519 (B) MEXICO 2038 (C) MEXICO 1669 CIUDAD JUA 00000516 001.2 OF 006 CIUDAD JUAREZ CONDITIONS ¶1. (U) Ciudad Juarez, located in the state of Chihuahua, Mexico, forms the larger half of the Ciudad Juarez/El Paso metropolitan area with the largest population center on any international border in the world. The Ciudad Juarez/El Paso area is one contiguous community separated by a visible line of demarcation. The region is connected by nine international ports-of-entry, which daily facilitate crossing for more than 60,000 people, making it a major port of entry and transportation hub for all of north central Mexico. Juarez residents commute daily to El Paso to work, attend school, and conduct trade and tourism. For residents of Juarez, travel to El Paso has traditionally been a routine activity, reinforced by lower housing costs in Juarez, and access to higher quality and lower cost consumer goods from El Paso. These economic factors have created a large community of U.S. citizens and Legally Permanent Residents (LPRs) inside the Consular District. ¶2. (U) Chihuahua's export-oriented, manufacturing industry is a key component of the economy. Manufactured goods account for 98.7% of total state exports, with over 95% of exports sold to the United States. Goods produced in this sector represent an integral part of the U.S. manufacturing supply-chain. The state's manufacturing center is in Ciudad Juarez, which has the highest concentration of maquila activity in Mexico. Employment opportunities in both the maquila and construction industries have attracted thousands of migrants from other regions of Mexico to Juarez during the past twenty years. Until the recent economic downturn, Juarez residents enjoyed one of the highest per capita income levels in the country. ¶3. (U) The global economic downturn is hurting Chihuahua's manufacturing sector because of reduced demand for consumer and industrial goods produced by the maquila industry. Hardest hit in particular were production lines that supplied components for the auto industry. However, there are some signs suggesting the worst is over. After shedding 80,000 formal sector jobs since economic troubles began in 2007, there was a modest increase of 2,500 formal sector jobs in July 2009 -- the first monthly increase since the economic downturn. Foreign direct investment (FDI) to Chihuahua increased by 9% in the second quarter of 2009 (Q1: $149 million, Q2: $163 million),but Q2 FDI for 2009 is still 60% less than Q2 FDI for 2008. (Ref A, B, and C) While applicants from lower socioeconomic status groups have previously been good candidates for B1/B2/BBBCC visas in Ciudad Juarez, the current economic trend and fluid employment situation require new vigilance on the part of NIV officers in evaluating claims of viable employment. Refusal rate for B1/B2/BCCC visas increased to 24% during this reporting period from 20% during the previous reporting period. ¶4. (SBU) Ciudad Juarez continues to cope with challenges to its social fabric as a result of the violence perpetrated by organized crime. More than 1,600 people were killed in and around the city of 1.7 million in 2008. Fighting between Mexican cartels competing for drug transport routes through this regional crossroad continued unabated in 2009, with current YTD murders slightly exceeding the number of murders for the entire year in 2008. Some 5,000 Mexican Army troops and 2,500 federal police have taken charge of daily police patrols and inspections in Ciudad Juarez. Residents lack confidence in local, state, and federal police forces, and in the locally-deployed elements of the Mexican army, to combat the drug violence in any meaningful way. The raging violence compels people to seek ways to escape from the area, leading to a detectable increase in the number and types of fraud schemes that have developed in and around the Consular District. ¶5. (U) Ciudad Juarez is considered a high fraud post due to elevated volumes of IV and ACS applications submitted with suspect U.S. birth records, or based upon suspect relationships, and NIV applications containing fraudulent identity and/or employment documents. NIV FRAUD ¶6. (SBU) Significant changes in the application process have required FPU to create new ways to detect and prevent fraud. In January 2009, Post initiated a paperless application and pass-back process utilizing the DS-160 NIV application. Then in April 2009, Post began collecting electronic fingerprints and photographs for NIV applications at an offsite data collection facility known as the Applicant Service Center (ASC). These changes have translated into significant prescreening benefits because applicants visit the ASC at least one day prior to their CIUDAD JUA 00000516 002.2 OF 006 interview at the consulate. This 24-hour margin gives Fraud Investigators time to prescreen and analyze applications before the applicant arrives at the consulate. To this end, one of the most useful databases available to FPU tracks the phone numbers and email addresses used to schedule appointments at the offsite data collection facility. Investigators have developed skill in selecting data that can be exploited through the use of detection tools like Text Search in Consular Consolidated Database (CCD). As a result, 70% of applications investigated after being prescreened through automated tools were found to contain fraud. Prior to the collection of data offsite, investigators prescreened the actual documents of applicants waiting to be interviewed, which yielded a 30% rate of fraud established in applications subsequently investigated in FPU. In addition to the applications that are identified through prescreening, FPU continues to investigate cases referred by line officers. ¶7. (U) FPU Investigators conducted 1,118 minor investigations mostly involving questionable employment documents, of which 284 (25 percent) were confirmed as fraud. In 236 cases, adjudicating officers suspected the supporting documents to be fraudulent and denied the applications 214b without referring the applications to FPU. Through the use of Internet Protocol (IP) addresses which are recorded by the DS-160, automated prescreening methods discussed above and consular officer vigilance, FPU identified five new document vendors. In addition, a validation study of all visa referrals revealed that out of 283 referrals for FY08, fraud was indicated in four referrals (1 percent). In each of these four cases the referral ended their employment with the Mexican government agency for which they were working shortly before being interviewed. All four could not be located in Mexico and are presumed to be living illegally in the U.S. ¶8. (U) FPU investigators carried out complex investigations on 123 cases which included indentifying document vendors, complete document packages, and the verification of L, E, H, and TN visas. Of the total number of complex investigations, 33 (27 percent) were found to be fraudulent. The insecurity bred by the surge in violence perpetrated by organized crime, and the preexisting unstable economy, has increasingly motivated a desperate population to turn to fraud. This is evident in the growing number of fraudulent applications in visa categories outside B1/B2/BBBCC, such as student and work visas. For example, investigators have seen an increase in applications involving virtual companies in which applicants document elaborate plans for expanding claimed businesses in the U.S.; however, they are unable to support their claims with any credible evidence of related business transactions. ¶9. (U) Post noticed an increased number of unqualified TN (NAFTA Professional) visa applicants. During this reporting period TN/TD applications increased by 10 percent. Refusal rate for TN/TD applications increased to 32 percent (versus a 16 percent refusal rate from the previous reporting period). Also, Post noticed an increase in F1 (student) applications made by upper class professionals wishing to study English at the community college in El Paso. FPU believes these increases are as a result of wealthy Juarenses attempting flee Ciudad Juarez to escape the high levels of violence. IV FRAUD ¶10. (U) Post processes all immigrant visas for Mexico, and given the 2,000-mile border Mexico shares with the U.S., certain fraud schemes are endemic. Central to these schemes is an irregular U.S. birth record that involves a suspect birth attendant, birth at home, or delayed registration. Because this fraud is pervasive, FPU investigates all IV applications supported by an irregular U.S. birth record. While the majority of the fraudulent U.S. birth records are associated with suspect birth attendants, a secondary source involves grandparents or other relatives who document non-biological children as their own. ¶11. (U) FPU completed 943 IV investigations during the reporting period. 597 were initiated and closed within the reporting period. The remaining 346 were opened prior to the March 2009, but closed during this reporting period. Fraud was established in 172 cases (18 percent),consistent with historical trends. Another 158 cases (17 percent) were resolved as inconclusive yet presumed fraudulent due to lack of cooperation from the petitioner and/or beneficiary, or the existence of common fraud indicators. The vast majority of these inconclusive cases involved petitioners and/or beneficiaries who failed to return for their scheduled follow-up interviews, but will be referred to FPU to continue the investigation if they return. Fraud was not indicated in the remaining 613 cases that were closed during the reporting period. CIUDAD JUA 00000516 003.2 OF 006 ¶12. (U) Of the 172 cases that were found to be fraudulent, 49 (28 percent) yielded fraudulent U.S. birth records. Blood relationship fraud accounted for another 47 cases (27 percent). Although DNA testing helped to establish fraud in some of these cases, skillful interviewing by adjudicating officers and fraud investigators resolved the greater part. ¶13. (U) During the reporting period, FPU investigated a total of 456 immigrant visa cases related to suspect petitioner birth records from the United States. Due to the complexity of the investigations and to the fact that events involving the births occurred as long as 30 to 40 years ago, FPU scrutinized the evidence submitted, interviewed the birth mother whenever possible, and collected existing information through vital statistics and civil registries. Through this method, FPU uncovered 49 fraudulently filed U.S. records, while identifying two suspect midwives whose names were added to the CA/FPP Suspect Birth Attendants (SBA) list. Also, FPU compared the CA/FPP SBA list with internal files and found two doctors and one midwife who had previously filed fraudulent birth records that were not included on the SBA list. This information, along with the supporting documentation outlining the fraud, was forwarded to CA/FPP who updated the SBA list. ¶14. (U) Interviews involving suspect marriage cases increased during the reporting period. FPU investigated 60 such cases. Fraud was found in 14 (23 percent) while 6 cases (10 percent) were closed as inconclusive and 40 cases were closed after fraud was not indicated. Half of the cases where fraud was found involved engaged (K1) or recently married (K3/CR1) couples. DV FRAUD ¶15. (U) Mexico is not eligible for the Diversity Visa Program. Nevertheless, Post received four third-country national DV cases for interview during the reporting period, representing a total of eight applicants. No fraud was found in any of these four DV cases. ACS AND U.S. PASSPORTS ¶16. (U) Demand for U.S. Passports surged as the Western Hemisphere Travel Initiative (WHTI) came into effect during the reporting period. At the height of the surge, weekly passport applications increased 800 percent above pre-WHTI levels. FPU completed 194 ACS investigations during the reporting period; an increase of 250 percent compared to the last reporting period. To meet this demand, FPU detailed two investigators to the ACS section to work full time. Previously, one investigator handled ACS cases on a part time, as needed, basis. 177 investigations were initiated and closed during the reporting period. Fraud was established in 27 cases (14 percent),consisted with historical trends and consistent with IV fraud levels. Another 30 cases were resolved as inconclusive yet presumed fraudulent, due to the lack of cooperation or response from parties to the application and/or the existence of common fraud indicators. ¶17. (U) Of the 194 ACS investigations, 132 were related to U.S. Passport applications and 62 were related to CRBA applications. Fraud was discovered in 20 U.S. Passport applications (15 percent) and 7 CRBA applications (11 percent). DNA testing resolved questions around blood relationships in 7 U.S. Passport applications and 12 CRBA applications. One of the DNA exams demonstrated fraud in a CRBA application, three of these DNA cases were closed as inconclusive because the applicants did not appear for their scheduled DNA test, and DNA proved the blood relationship in the remaining 15 cases. ADOPTION FRAUD ¶18. (U) Twenty suspect adoption cases, all related to immigrant visa petitions, were referred to FPU. The number of suspect adoption cases has increased for each of the past four reporting periods despite a drop in the number of adoption cases handled at Post. Eleven were confirmed as fraudulent. Seven of these adoption cases were fraudulent because the adoption was not irrevocable and therefore not valid for immigration purposes. In one case, the petitioner had apparently been defrauded by a Mexican lawyer who claimed to have arranged the adoption but had provided fraudulent adoption paperwork not filed with any Mexican family court. After an investigation that involved Mexican DIF (the equivalent to child protective services),the child was returned to the adoptive parents to formally complete the adoption in Mexico. ¶19. (U) Two of the fraudulent adoption cases were particularly CIUDAD JUA 00000516 004.2 OF 006 egregious. The adoption documents in both cases were completely counterfeit, and in one case the "adoptive parents" admitted to purchasing the child for $2,000. Mexican DIF took the two adoptive children into protective custody, where they remain. In one case the counterfeit adoption paperwork was being used to traffic the "adoptive child" to California to reunite with her biological mother who is living illegally. Also, FPU made progress but has not closed an investigation involving a Mexican child trafficked to the U.S. and adopted in Arizona. FPU strongly suspects that the "biological mother" who gave the child up for adoption is not the true biological mother based on an interview with the "biological mother's" mother (the child's apparent grandparent). The adoptive parents claim they cannot locate the "biological mother." The Consular Chief has recommended to the adoptive parent's attorney DNA testing to demonstrate that the woman who gave the child up for adoption is truly the biological mother. FPU continues to search for evidence that would prove there is no blood relationship between the purported "biological mother" and the child that was adopted after being trafficked to Arizona. DNA TESTING ¶20. (U) While blood relationships can often be substantiated through robust documentary evidence, Post policy recommends DNA testing to applicants as an expedient choice when there are lingering doubts regarding the legitimacy of a claim. DNA testing is of particular value in cases where grandparents or other close relatives have registered or raised children as their own biological offspring, a common cultural practice in Mexico. In these cases, because a close genetic match is expected, Post requests the presence of both alleged biological parents, in order to better discriminate among some of the genetic markers shared among familial and ethnic groups. This will be the last reporting period where DNA testing occurs through the Panel Physician clinics, as new guidance for DNA testing procedures was recently shortly after this reporting period. ¶21. (U) Nineteen ACS and 158 IV applicants opted to participate in DNA testing after their documentary evidence proved insufficient to resolve their cases. 23 of the cases (13 percent) involved applicants who never appeared for their designated appointment. Of the remaining 154 DNA cases, DNA results refuted the claimed blood relationship in 13 IV cases and one ACS case (9 percent). All other DNA cases verified the blood relationship, to a degree of certainty greater than or equal to 99.5 percent, in accordance with 9 FAM 42.41. ASYLUM AND OTHER DHS BENEFITS ¶22. (U) There is an active USCIS contingent at Post, which accepts and adjudicates a substantial number of applications for waiver of grounds of inadmissibility (I-601). USCIS at Post also processes a smaller number of immigrant-based petitions for persons resident in the consular district. During the reporting period, USCIS received over 9,100 waiver applications, and USCIS detected no fraud in any applications for DHS benefits. However, any waiver applications that cannot be adjudicated because of questionable qualification must be referred to a domestic DHS office where they are more thoroughly reviewed. ALIEN SMUGGLING, TRAFFICKING, ORGANIZED CRIME, TERRORIST TRAVEL ¶23. (U) As open source and unclassified reports have previously concluded, drug smuggling and associated violence, human trafficking, and alien smuggling continue to threaten the security of the U.S. border with Mexico. Given Mexico's status as a transit point for both lawful and unlawful entry into the U.S., Post continues to investigate all leads that may indicate large-scale fraudulent document and/or alien smuggling rings. Recent investigations reinforce that high-quality forged or counterfeit documents are readily available, with fraudulent birth records or fraudulently-filed genuine birth records being the most prevalent. In turn, the quality of fraudulent breeder documents has enabled applicants to obtain authentic Mexican identity documents, including passports and voter identification cards (the Mexican identity equivalent of a U.S. driver's license). While many suspicious document cases can be handled with a 214(b) refusal, Post encourages officers to refer any suspicious high-quality documents for investigation. DS CRIMINAL FRAUD INVESTIGATIONS ¶24. (SBU) Unfortunately, FPU's ARSO-I departed post after concluding his assignment in Ciudad Juarez. However, one new ARSO-I arrived shortly after the reporting period concluded and CIUDAD JUA 00000516 005.2 OF 006 has opened several investigations within his first two weeks at Post. Another ARSO-I is scheduled to arrive in 2010. MEXICO IDENTITY DOCUMENTS AND CIVIL REGISTRY ¶25. (U) 109 Mexican passports were returned to the local Mexican passport agency administered by the Secretary of Foreign Relations (SRE). The majority of these passports were returned because an FPU investigation determined the bearer was unlawfully registered with fraudulent information or documentation. Some passports were returned because they were lost at the Consulate and the holder could not be located. When the passport was returned to the SRE because of a fraudulent registration within Post's consular district, a corresponding birth record was sent to alert the Civil Registry Central Archives in Chihuahua. ¶26. (U) FPU organizes a one-week training course for newly arrived officers. Part of this training course includes a visit to the local Civil Registry in downtown Ciudad Juarez. Mexico's Civil Registry system is a "good faith" institution, meaning that when a parent registers a child, the relationship is presumed to exist because the registration is presumed to be made in "good faith." This system makes it very easy to fraudulently document a blood relationship. For example, it is common for grandparents to register a child as their biological child and because the Civil Registry system is a "good faith" institution, Civil Registry officials do not routinely scrutinize birth registrations. This can also allow for more sinister fraud schemes such as creating additional, fraudulent identities. Because of this system, anecdotal observations suggest creating a new identity is more common than stealing someone else's existing identity. However, on FPU's most recent training visit to the Civil Registry in Ciudad Juarez, FPU observed the Civil Registry requiring hospital or birth clinic records prior to allowing new parents to register their infant children. FPU views this as a positive, if small, step to reduce fraud in birth records. COOPERATION WITH HOST GOVERNMENT OFFICIALS ¶27. (SBU) Post continues to enjoy a high degree of cooperation with host government agencies and individual government officials. ARSO-I and the federal attorney general's office (PGR) in Mexico City have a good working relationship, cooperation to prosecute the most egregious users of fraudulent federally-issued Mexican documents in several cases. However, the ARSO-I has had no success in getting the PGR locally to prosecute document vendors peddling fraudulent employment documents. COOPERATION WITH USG AND OTHER STATE AGENCIES ¶28. (U) FPU collaborates with key USG contacts, including the El Paso Intelligence Center (EPIC),CBP inspectors at the local ports-of-entry, U.S. Border Patrol, USCIS adjudications officers in Juarez and in El Paso, the ICE, FBI, and DEA offices at Post, and fraud prevention managers in the various U.S. Passport Agencies. At the state level, Post submits alerts on all fraudulent birth records to investigative arm of the affected Vital Statistics office, the greatest part of which go to Texas. During the course of the reporting period, FPU staff have participated in ongoing FBI Human Trafficking Task Force meetings, exchanging information on smuggling operations, fraud trends, and providing updates on pending investigations headed by ARSO-I. ¶29. (U) In addition to a large number of routine outside requests, FPU assisted CA in supporting U.S. District Attorneys in four separate trials during the reporting period. Two of these cases involved locating potential witnesses in Mexico, and two cases involved located a birth record (one official civil registry record and one internal medical clinic record). In one case, a consular officer who was serving as the Deputy Fraud Program Manager and the Locally Employed Staff (LES) Supervisory Investigator have been cleared to provide testimony in a trail scheduled for the next reporting period. However, because the LES Supervisory Investigator located a key piece of evidence in Mexico the case may not actually go to trial. AREAS OF PARTICULAR CONCERN ¶30. (SBU) The unprecedented level of narcotics-related violence, coupled with the inability of municipal, state, and federal police forces to contain the violence in any substantive manner, is an area of significant concern. The violence serves as an incentive to applicants, qualified or not, to use the CIUDAD JUA 00000516 006.2 OF 006 services of local document vendors as applicants try to make the best case for issuance during the visa interview. Also, during the reporting period, several Consulate LES employees were victims of crime. While not targeted because of their association with the Consulate, the general breakdown of law and order has led to an increase in all types of criminal activity. ¶31. (U) WHTI implementation had a significant impact on IV cases where the petitioner possessed a fraudulently filed SBA birth record. Prior to WHTI, IV petitioners (who often accompany IV beneficiaries to Ciudad Juarez for their immigrant visa interviews) rarely held U.S. passports. However, of the 49 IV petitioners with fraudulently filed U.S. records discovered during IV fraud investigations during the reporting period, 36 held valid U.S. passports obtained by using the fraudulently filed U.S. SBA record. While FPU strongly supports WHTI, an interesting unintended consequence is that IV petitioners with fraudulently filed U.S. birth records now almost always possess valid U.S. Passports. While FPU enters PLOTS lookouts when one of these cases is discovered, Post has received no action for several years on passport revocation memos submitted to headquarters in these cases. ¶32. (U) Post recently discovered one case involving two fraudulent MRV receipts which are purchased through Banamex, the Mexican National Bank. A cashier working at Banamex stole receipt paper and forged the MRV receipt printing using a non-bank receipt printer. Although Post has only identified this one case, the significant vulnerability of MRV receipts to fraud -- which Post identified and reported to CA/FPP prior to this incident -- cause Post to be concerned that this case is only the tip of a larger iceberg. STAFFING AND TRAINING ¶33. (U) FPU staffing during the reporting period consisted of a permanent Fraud Program Manager (FPM),a GS-12 consular officer, a Deputy FPM that rotates every six months among consular officers at Post, one FSN-10 Supervisory Investigator, one EFM FP-5 Investigations Assistant position, currently unstaffed, nine FSN-9 Fraud Investigator positions, and one H/L FSN-9 Fraud Investigator position. ¶34. (U) FPU staff continues to complete a variety of distance learning courses, including PC-544 Detecting Fraudulent Documents, PC-128 Detecting Imposters and PC-103 Nationality Law/Consular Procedures. ACS cross-training, which was completed during the previous reporting period, allowed FPU to shift investigators to ACS as WHTI significantly increased passport demand. The Deputy FPM attended PC-541 Fraud Prevention for Consular Managers and one LES Fraud Investigator attended PC-542 Worldwide LES Fraud Prevention Workshop. Also, one FSN-9 Fraud Investigator elected to serve TDY to Embassy Baghdad and began training and processing for her assignment scheduled to begin during the next reporting period. ¶35. (U) Five officers participated in Post's 4-day accelerated training module, where IV, NIV, ACS and FPU have each organized a one-day agenda to discuss pertinent operating procedures. FPU's module provides an overview on consular district conditions, trains on Mexican civil documents and suspect U.S. birth records, discusses the formal fraud referral process, and reviews tools available to Post, including SBA fraud, SOPs, Visas Viper, CCD, the CA/FPP webpage, and Lexis Nexis. ¶36. (U) Seven officers took part in FPU's week-long orientation program, which expands upon the training delivered in the accelerated module. This program is designed for officers who have between 3-6 months of experience at Post. The training familiarizes participants with socioeconomic conditions at Post via tours of local maquilas (factories),neighborhoods, and an El Paso midwifery. It also orients them to the operations of key U.S. and Mexican government agencies including the Mexican Civil Registry, the Mexican Secretary of Foreign Relations (SRE),the Mexican Consulate in El Paso, USCIS, a CBP Port of Entry, ICE detention facility, DOJ Immigration Court, and an evening ride-along tour of the U.S.-Mexico border with Border Patrol. The training also represents an opportunity to observe fraud interviews, providing insight into investigative methods and techniques. MCGRATH