FRAUD SUMMARY - (SURABAYA)

UNCLAS SECTION 01 OF 04 SURABAYA 000087 SIPDIS DEPARTMENT FOR CA/FPP AND CA/VO/KCC DEPARTMENT FOR DS/EAP AND DS/ICI/CR E.O. 12958: N/A TAGS: KFRD CVIS CPAS CMGT ASEC ID SUBJECT: FRAUD SUMMARY - (SURABAYA) REF: A) 09 SURABAYA 025, B) 09 SURABAYA 009, C) 08 SURABAYA 0103 SURABAYA 00000087 001.2 OF 004 ¶1. Please find below the semi-annual fraud report for U.S. Consulate General Surabaya for the period March - August 2009. ¶A. Country Conditions Indonesia is an archipelago of over 17,500 islands spanning three time zones and 3,400 miles along the Equator. Its population of 245 million comprises more than 300 ethnic groups and six official religions. Inter-island economic migration is common (especially to and from Java). Indonesia is a poor country -- nearly half the population earns less than two dollars a day -- but about 10% of the population is part of the moneyed economy enjoying a middle class or higher standard of living. Bribery and corruption are common. Although the incidence of consular fraud in Surabaya was low during this reporting period, consular fraud in Surabaya generally ranges from medium to high, but is generally not very sophisticated. Visa brokers and document vendors take advantage of visa seekers' lack of familiarity with the visa process to charge them exorbitant amounts for mediocre documents. Consular Officers in Surabaya do not rely heavily on documentation and focus more on visa interviews in evaluating applicants' ability to overcome 214(b). When an applicant is suspected of being the client of a document vendor, adjudicating officers refer the cases to the Fraud Prevention Unit (FPU) for further investigation. When fraud is confirmed and/or follow-up investigative interviews are likely to yield additional information, the Fraud Prevention Manager refers the case for a secondary interview. Secondary investigative interviews generally involve the Regional Security Officer (RSO),the Fraud Prevention Manager, the Consular Fraud Prevention LES, and the RSO LES Investigator. Referrals have led to arrests and/or raids of document vendor operations. ¶B. NIV Fraud During the past six months, the incidence of non-immigrant visa fraud in Surabaya has declined significantly. Post only recorded nine (9) cases of confirmed visa fraud during the reporting period. No arrests occurred as a result of visa fraud investigations in Surabaya, although two document vendors/alien smugglers (and one client) associated with applicants who �A;applied at Embassy Jakarta were arrested in Surabaya's consular district (in Bali and Ponorogo). PPT - During the reporting period, no applicants applied using new passports with new identities. A3/G5 - Post only received one application for an A3 visa during the reporting period. B1/B2 - There were no arrests related to fraudulent B1/B2 visa applications submitted in Surabaya during the reporting period. While it is likely that some applicants who were refused visas in accordance with Section 214(b) had fraudulent documents in their possession at the time of their interviews, adjudicating officers do not routinely ask applicants for unnecessary documents unless fraud is suspected. In cases when fraud is clearly suspected, however, adjudicating officers ask applicants to submit all documents they brought to their interviews for follow-up investigation in an effort to determine if a document vendor supplied the documents. In August, FPM and the Consular Fraud Prevention Assistant visited the addresses of several B1/B2 visa applicants (both prior refusals and issuances) from the cities of Kediri and Malang in East Java. The visits provided additional credibility in regard to the qualifications of two applicants who had previously been refused and demonstrated misrepresentation on the part of one applicant who had been issued multiple visas. The latter has been entered into CLASS as a quasi refusal P6C1. Post plans to conduct its annual B1/B2 validation study this winter, covering issuances during the Dec 1, 2007, through May 31, 2008, time period (Ref C). C1/D - As a result of Post's occasional investigation of C1/D applicants' employment and training histories, three cases of fraud were confirmed during the reporting period. In total, the training and employment histories of 41 C1/D applicants were investigated during the reporting period. Three applicants (7 percent) were determined to have provided either a fraudulent training certificate or false employment history. In July, Post visited the three crew recruitment agencies in Bali responsible SURABAYA 00000087 002.2 OF 004 for most of Surabaya's C1/D applicants and discussed the aforementioned applicants. Each of the recruiters is registered with the Consulate and Embassy through the crew recruiter registration program. The recruitment companies appear to have quality operations and generally do a good job screening their recruits. A new crew recruiter in Bali has requested to register with the Consulate and Embassy. Post's Fraud Prevention Manager plans to visit the company in mid-September. H1B - Most H1B applicants who apply in Surabaya received their university degrees in the United States. For H1B applicants who do not have U.S. university educations, Post verifies their education credentials. The same practice applies to applicants for L visas. The incidence of H1B and L visa fraud in Surabaya is low. H2B - Surabaya began adjudicating H2B visas again on October 1, 2008, after they had been adjudicated only in Jakarta during the 2007 - 2008 time period. While post has experienced no H2B-related fraud since resumption of H2B adjudication, we have also received very few applications. Most of the recruiters who planned to begin recruiting potential H2Bs were unable or unwilling to meet the new DHS requirements regarding fees charged to workers as a condition of employment. Post did receive a few applications from applicants who had been charged fees that are no longer allowed by regulation and, therefore, requested a revocation of the petition. In July, FPM visited a labor recruitment company in Malang. The company plans to begin recruitment of H2B laborers for the U.S. market within the next year. During our discussions with the company director, he advised that both his firm and the U.S. recruiter planned to charge the workers fees as a condition of their employment. While his company planned to charge approximately $500 per worker as a processing fee, the U.S. recruiter reportedly planned to charge $2000 per worker. Following FPM's explanation of the latest rules regarding prohibited fees, the company has postponed plans to recruit labor for the U.S. market until it can find a more suitable U.S.-based recruitment partner and restructure its recruitment scheme. Currently, the core of the company's business is recruitment and training of domestic laborers for Hong Kong and Taiwan. Note: Post utilizes the same registration program for H2B agents that is used in Jakarta, similar to the registration process for C1/D agents. F1 - Among the least qualified applicants for F1 visas interviewed at Post are those who are enrolled in short-term English language programs in the United States, usually at stand alone ESL schools that are not associated with universities or community colleges. Students applying to participate in these ESL programs tended to be less capable of demonstrating sufficient finances and were often working age adults who had poor employment histories and were unable to demonstrate ties to Indonesia. In some such cases, the source of funds was from an American friend or boyfriend in the United States. J1 - Shortly after the H2B cap was reached, Post began to receive a few J1 trainee visa applicants who planned to work in jobs that would normally be filled by H2B workers. In one such case, APEX USA had recruited seven applicants to join a J1 trainee program in the United States. Several of the applicants had previously participated in J1 trainee programs arranged by APEX. None of the applicants could explain what if any training was provided during their previous trainee programs. All seven applicants were refused due to the fact that they were not qualified for J1 visas and the J1 trainee visas appeared only to be an attempt to provide H2B labor. Following the refusal, the applicants confirmed ConOff's suspicions and indicated that APEX USA originally planned to send them to the U.S. to perform exactly the same work on H2B visas, but the petitions were denied due to the H2B cap, thus the effort to obtain J1 visas for the seven applicants. Note: A validation study of APEX USA recruited applicants who were issued J1 trainee visas calendar year 2006 demonstrated a 33 percent non-return rate (Ref B). Post FPM and Fraud Prevention Assistant visited a hotel in Bali in July. The hotel is currently post's largest source of J1 trainee visa applicants. The hotel has a history of sending J1 trainees to its sister hotel in Miami for 12 month hospitality-related trainee programs and has maintained a good track record. We met with more than 25 returnees and confirmed not only their return but also that many had received promotions shortly after returning. M1 - No new M1 fraud cases during the reporting period. SURABAYA 00000087 003.2 OF 004 R1 - No new R1 fraud cases during the reporting period. ¶C. IV fraud. Surabaya does not adjudicate Immigrant Visas. ¶D. Diversity Visa (DV) fraud. Surabaya does not adjudicate Diversity Visas, but has assisted with occasional DV investigations and DV visa outreach efforts. ¶E. ACS and Passport Fraud. Post did not identify any cases of ACS or passport fraud during the reporting period, but did receive two applications for reports of birth and passports in which the American citizen parent was unable to demonstrate sufficient physical presence in the United States to transmit citizenship. ¶F. Adoption fraud. Surabaya does not process adoptions. ¶G. Use of DNA testing There are no special circumstances with regards to DNA testing in Indonesia and Post receives results in a timely manner. Post requests DNA testing for American citizenship cases when insufficient proof of parentage is provided. ¶H. Asylum/DHS benefit fraud. No cases during reporting period. ¶I. Alien smuggling, trafficking, organized crime, terrorist travel. During a fraud prevention site visit to the cities of Kediri and Malang in July 2009, we visited the office of a document vendor who was arrested in Malang in January 2009. We were able to confirm that his business is closed. The document vendor is incarcerated and serving a two year sentence. The Surabaya police arrested three document vendors and one human trafficker in the past two months. The police shared the biodata of those arrested, which we entered as CLASS lookouts. Likewise, police in Kediri reported arresting two human traffickers (internal trafficking) and one document vendor who was involved in producing fraudulent business licenses, although apparently bearing no relationship to visa applications. Additionally, there were raids on document vendor / smuggler establishments that led to arrests in both Bali and Ponorogo (East Java) during the reporting period. Both cases were related to fraudulent visa applicants who applied for visas at Embassy Jakarta. One client of the document vendor arrested in Ponorogo had applied for a visa in Surabaya some months in the past and was refused 214(b). His name was found on the document vendor's client list obtained by police. ¶J. DS criminal investigations. The FPM and the RSO enjoy an excellent working relationship. The Consular Section has employed a Standard Operating Procedure for referral of suspected visa fraud cases to the Fraud Prevention Unit and, when necessary, to the RSO for follow-up investigation. The FPU leads Post's fraud prevention activities up to the point of secondary investigative interviews and police involvement, at which time the RSO takes the lead. Results of investigations as well as police and court actions are always shared and discussed. During the past six months, the incidence of non-immigrant visa fraud in Surabaya has declined significantly. During the preceding twelve months, several visa fraud-related arrests were well publicized in local newspapers and may be a factor in the recent decline, as well as increased police efforts to take action against document vendors. ¶K. Host country documents. See Embassy Jakarta's latest Fraud Prevention Summary. ¶L. Host government authorities. The Consulate has requested the assistance of local police on a few occasions during the reporting period, receiving mixed SURABAYA 00000087 004.2 OF 004 cooperation. ¶M. Areas of particular concern / general remarks. There are no areas of particular concern during the reporting period. ¶N. Staffing and training. Consular Chief/FPM - has attended the ConGen course; Fraud Prevention for Consular Managers, Detecting Imposters; Detecting Fraudulent Documents; and DHS Fraud Prevention Workshops. LES Consular Fraud Prevention Assistant - has attended the Fraud Prevention Course for LES (PC-542); a Customs and Border Protection fraud prevention training session in Jakarta; and an ICITAP course on the prevention of smuggling and human trafficking in Jakarta. Regional Security Officer (RSO) - Has not yet attended fraud prevention-related training. RSO LES Investigator - has attended an ICITAP course on the prevention of smuggling and human trafficking in Jakarta. MCCLELLAND