A Sting and a Sham College

Government undercover operation that led to indictments of 21 people sheds light on shadowy world of suspect colleges that abuse the student visa system and the agents who stand to profit.

May 24, 2016

In the fall of 2013 Jun Shen allegedly sent an email to officials at the brand-new University of Northern New Jersey offering her services as a recruiting agent for foreign students. According to the federal criminal complaint against her, Shen, a Chinese national and U.S. permanent resident who owned an international student consulting company in Levittown, N.Y., subsequently left a recorded message for UNNJ officials saying she had at least 50 students ready to transfer to the institution.

Between November of 2013 and March 2016 -- right before federal prosecutors announced that UNNJ was a fake university set up by the government as part of an elaborate sting operation -- Shen allegedly recruited approximately 150 foreign individuals to UNNJ despite knowing that they would not be attending classes. For her recruiting services Shen received a percentage of the “tuition” her clients paid: the criminal complaint estimates that Shen earned a total $164,775 in commission payments.

The tuition Shen’s recruits forked over didn’t pay for classes. UNNJ didn’t offer any. Nor did it employ any faculty. The university was nothing more than a website and storefront offices staffed with undercover agents posing as school administrators.

Federal officials allege that foreign nationals, with the help of recruiters like Shen, paid to enroll in the sham UNNJ as a way to maintain their status to live and work in the U.S. on student visas, though they weren’t genuine students at all. It’s what prosecutors describe as a pay-to-stay scheme.

The federal sting operation that ended last month in the indictment of 21 people, including Shen, on visa fraud-related charges, renewed focus on the problem of fake colleges, but its real target was the brokers, or agents, it ensnared.

Federal officials allege that the defendants -- many of whom worked as recruiters or consultants serving international students -- fraudulently obtained or attempted to obtain student or work visas for approximately 1,000 foreign nationals from 26 different countries. In many cases the recruiters allegedly obtained false student records for their clients, including UNNJ transcripts and diplomas.

Shen’s lawyer did not return multiple requests for comment. Lawyers for the other defendants identified by name in this article declined interview requests.

The 21 defendants in the case are variously charged with conspiracy to commit visa fraud, conspiracy to harbor aliens for profit, making false statements and H-1B visa fraud. Apart from the alleged fraud involving student visas, two of the defendants, who were affiliated with information technology staffing companies, are accused of a separate scheme in which they falsely represented their clients would work at UNNJ in applications for H-1B guest worker visas.

The arrests, announced in early April, shed light on a shadowy world of suspect colleges that abuse the student visa system and the agents who stand to profit from such abuse. In the middle are the UNNJ “students” who initially entered the U.S. on F-1 visas to attend other educational institutions. UNNJ offered a way for them to prolong their stay in the United States.

Supply and Demand

Many of the foreign nationals who enrolled at UNNJ gained authorization to work under a program for students on F-1 visas known as curricular practical training, or CPT. The program is intended to enable legitimate foreign students to work in an internship or practicum that is considered integral to a course of study. But at UNNJ there was only work, no study.

“We have a lot of students who are looking for a school to maintain F1 status and apply to CPT,” one of the defendants, Jiaming Wang, the president of the California-based American International Education Center, allegedly wrote to UNNJ in an email cited in a criminal complaint. Another recruiting agent named as a defendant, Yanjun Lin, allegedly wanted to know whether UNNJ would authorize CPT on the student’s first day of enrollment. “I want to make sure that our student [sic] don’t need to go to school. They can work full-time,” Lin allegedly stated in a recorded call cited in a criminal complaint.

“Schools exist where educated immigrants can find an avenue of staying longer in the U.S. under the guise of being a student and work under the CPT program,” said Neil G. Ruiz, the executive director of George Washington University’s Center for Law, Economics and Finance and an expert on foreign student enrollment trends in the U.S. “You’re basically paying for status and the chance of getting an H-1B visa” -- for which there is an annual lottery, and for which there are not enough to go around.

“What the U.S. government is trying to do is attack the demand side for this school,” Ruiz said of the UNNJ investigation, “but the real issue we have to also deal with is the supply side.”

“The government needs to tackle the supply side to ensure that we don’t have a lot of these schools popping up to become visa mills for foreigners to just work in the United States.”

A July 2012 U.S. Government Accountability Office report issued in the wake of a high-profile visa fraud case involving an unaccredited California institution, Tri-Valley University, found that the U.S. Department of Homeland Security's Student and Exchange Visitor Program had inadequate processes in place to identify and combat school fraud. There are more than 8,000 schools certified by SEVP to enroll international students.

Since the GAO report, federal officials have brought visa fraud-related charges against the operators of a few different schools. The former CEO of Herguan University, in California, pleaded guilty to submitting false documents to the Homeland Security Department and in September was sentenced to 12 months in prison and ordered to forfeit $700,000.

Three senior executives at Micropower Career Institute, a for-profit college with five campuses in New Jersey and New York, and the Institute for Health Education, in New Jersey, were sentenced in January on charges related to financial aid and student visa fraud.

A trial date has been set for August for the owner and manager of four Los Angeles-area colleges that federal officials say were at the center of another pay-to-stay scheme: the American College of Forensic Studies, Likie Fashion and Technology College, Prodee University/Neo-America Language School, and the Walter Jay M. D. Institute.

At least some of the defendants in the UNNJ case knew about these prosecutions and discussed them with the undercover agents posing as school officials, according to the criminal complaints against them. Shen, for example, allegedly advised UNNJ not to accept transfer students from Micropower so as to avoid becoming law enforcement’s “next target.”

Another defendant in the case, Avinash Shankar, a citizen of India and the president of an international student consulting firm in Bloomington, Ill., allegedly engaged in a text message conversation with an undercover agent posing as a UNNJ official in which Shankar described finding an online news article about the sentencing of Herguan’s president.

“I’m seriously wondering that [the school] will also fall in this limelight someday by some smart-ass trying to prove that we are also in the same trend like Herguan,” Shankar allegedly wrote.

The Students

The Department of Homeland Security devised the sting operation to catch the recruiters. Students who signed up for the fake UNNJ were not criminally charged, but the Student and Exchange Visitor Program terminated the student records of active UNNJ students as well as many former ones who had since transferred to other institutions. Students who could find another SEVP-certified school willing to accept them could seek reinstatement or, otherwise, leave the country. Some of the former UNNJ students have received notices to appear in immigration court, the first step in deportation proceedings.

Since the announcement of the sting operation in early April, some of the students have fought back, arguing, per the title of a New York Times article on this subject, that they were “collateral damage” in the government’s investigation. Inside Higher Ed spoke to several students who said they believed that the university -- and its unusual arrangement in which they could work full time and not attend classes -- was perfectly legal.

One student from China, who asked to be identified by his nickname, Mas, said he had found a job teaching painting in the Bay Area after he earned an M.F.A. at a California institution. His OPT period -- a postgraduation work authorization phase of one to three years available to international students -- was expiring, and he started looking for an education-related program he could enroll in while keeping his teaching job.

Going to school while working full time is not typically an option for an international student on an F-1 visa. Regulations require foreign nationals on student visas to be enrolled in a full-time course of study and prohibit them from working without specific authorization (such as through the CPT program).

But Mas found an agent -- one of the defendants in the case -- who, he said, “gave me some information about CPT. Before that I didn’t really know the CPT program.”

“She told me if I take the part-time CPT, I need to go to class, but if I take the full-time CPT program, I don’t have to go to class,” said Mas. “I trusted her.”

Another former UNNJ student who asked to remain anonymous described being persuaded by an agent’s assurance that it would be possible to obtain accounting credit through UNNJ without attending class and while continuing to work as a mergers and acquisition consultant (the student, who identified as a graduate of a top-tier American M.B.A. program, wanted accounting credits in order to sit for the CPA exam).

“You’re getting your credit by doing things related to your major,” said the student, whose agent was not among the 21 defendants. “This is pretty much like for medical students, their residency program. It totally makes sense to me and also as an M&A consultant I work a very tight, busy schedule. I appreciated the flexibility.”

The federal government identified 1,076 foreign nationals who fraudulently obtained student visa status with the assistance of the 21 agents and brokers indicted in the case. About two dozen of these students are identified (anonymously) in criminal complaints as co-conspirators: these individuals allegedly obtained, through their agents, false academic documents and, in one case, came into the school to sign fake attendance sheets in different colored pens.

The government has, however, maintained that all 1,076 students, not just the two dozen identified in the complaints, were "willing participants in the scheme." It does not intend to refund the money students paid in tuition because it was used to perpetuate fraudulent activity.

“There was no school,” said Matthew Reilly, a spokesman for the U.S. Attorney’s Office for the District of New Jersey, which is prosecuting the case. “There were no classes, there were no books, there were no tests.”

“This was an operation that was set up to get visas for people.”

But Barmak Nassirian, the director of federal relations and policy analysis for the American Association of State Colleges and Universities, said the students who say they legitimately believed UNNJ was offering a legal route for them to stay -- and work -- in the U.S. have a point. The institution, by design, had all the outward signs of legitimacy, including approval to operate by the state of New Jersey and accreditation by the Accrediting Commission of Career Schools and Colleges and the Commission on English Language Accreditation. The accreditors were knowing partners in the sting operation.

UNNJ was also, of course, certified by the Department of Homeland Security to enroll foreign students.

“What level of due diligence is a regular civilian supposed to engage in?” Nassirian asked. “Is it too good to be true? Of course it’s too good to be true, but it does happen in life that some amazingly good things become available to people, to desperate people.”

“You’re already more receptive. If you’re a person who was just denied an H-1B because they ran out of slots, the idea of being around for an extra year to take a second bite of the apple may be appealing. At that point you’re desperate and just trying to hold on. Here comes the University of Northern New Jersey,” Nassirian said.

Louis Farrell, the director of Homeland Security’s Student and Exchange Visitor Program, said in a written statement that international students need to know their rights and responsibilities when they hire agents or recruiters. “The Student and Exchange Visitor Program urges international students to do their research. They must ensure the school where they enroll meets their educational objectives, and they should be wary of any recruiter who promises they can work without restrictions while attending school.”

“Based on current regulations, international students are ultimately responsible for maintaining their immigration status while studying in the U.S.”

The Agents

The growing practice of colleges paying commissions to recruiting agents who send them foreign students has been hotly debated in recent years, but the UNNJ case brought attention to a little-known subset of educational agents who are serving international students already present in the U.S. As the number of international students has grown -- particularly at the undergraduate and even the high school level -- the pool of students who could turn to “onshore” agents to facilitate their transfer to other institutions, legitimate or not, is growing.

Three of the agents implicated in the UNNJ investigation, two of whom were from the same agency, had been screened by ICEF, a well-known company that vets and trains recruitment agents. ICEF’s director of marketing and communications, Korinne Algie, said both of the agencies had been vetted within the past two years. The agencies, Algie said, had received “glowing references from some well-known, well-thought-of U.S. institutions, both at university level and at the English language level.” (She declined to name those institutions.)

Algie said the agencies have been “blacklisted” from ICEF events pending the company’s investigation.

“That’s what is very interesting and very concerning about this news -- that you could have respected universities and in this case ICEF vouching for agents that are engaging in activity that leads to arrest,” said Eddie West, the director of international initiatives for the National Association for College Admission Counseling.

“I think it does beg a broader question of how effective quality assurance mechanisms are,” West said.

Federal financial aid law prohibits universities from paying per capita commissions when they recruit domestic students. This legal ban on commissioned recruitment doesn’t apply to “foreign students residing in foreign countries who are not eligible to receive federal student assistance.”

The language of the statute is such that NACAC warns colleges that they risk violating the law if they pay commissions to agents who recruit international students residing in the U.S.

NACAC in any case only permits its members to use commissioned agents “when recruiting students outside the U.S.” and calls upon universities that choose to engage with them to “ensure accountability, transparency and integrity.”

The American International Recruitment Council, an association that certifies overseas recruitment agencies, used the news of the UNNJ arrests as an opportunity to remind its certified agencies that AIRC standards require them to only place students at accredited institutions (though UNNJ was, on paper, accredited). Michael Finnell, AIRC’s executive director, said the association would be looking at the issue of agents providing services to students already in the U.S. to see whether that's something that should be addressed in the standards.

It is unknown how many agents are engaging in the type of fraudulent activity the UNNJ defendants are accused of. But in their own words there is student demand.

“Actually we already do this for about five years,” one of the indicted agents, Wang, allegedly said in a recorded phone call. “Every year we have, I can least 300 to 500 students … We send them to a different school … They want to keep the F1 status and … just a waiting for H-1B.”


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