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Cablegate: Fraud Summary-Kyiv, Ukraine

VZCZCXRO8703
RR RUEHDBU RUEHIK RUEHLN RUEHPOD RUEHSK RUEHSL RUEHVK RUEHYG
DE RUEHKV #1687/01 2740505
ZNR UUUUU ZZH
R 010505Z OCT 09
FM AMEMBASSY KYIV
TO RUEHC/SECSTATE WASHDC 8496
RUEHPNH/NVC PORTSMOUTH 0033
INFO RUCNCIS/CIS COLLECTIVE
RUEHZG/NATO EU COLLECTIVE
RUEHFT/AMCONSUL FRANKFURT 0534

UNCLAS SECTION 01 OF 04 KYIV 001687

SIPDIS
SENSITIVE

DEPT FOR CA/FPP (BILLINGSR), CA/VO/F/P, DS/CR/VG, EUR/UMB, G/TIP
DEPT ALSO PASS TO KCC
POSTS FOR FRAUD PREVENTION MANAGERS
DHS FOR CIS/FDNS

E.O. 12958: N/A
TAGS: CVIS KFRD CPAS CMGT ASEC UP
SUBJECT: FRAUD SUMMARY-KYIV, UKRAINE

REF: (A) STATE 57623; (B) KYIV 572; (C) KYIV 466; (D) KYIV 1271; (E)
KYIV 846

1. (SBU) The following is post's semi-annual fraud summary for the
period March 1, 2009, through August 30, 2009.

2. (SBU) Country Conditions: As reported in the previous fraud
summary cable (ref B), Ukraine is experiencing a severe recession,
with a 14 percent expected decline in annual GDP for 2009,
increasing unemployment, and a weakened and unstable currency. In
addition, the political situation remains unstable in the lead up to
presidential elections, scheduled for January 2010. These factors
are reinforcing already high levels of fraud in Ukraine. Post
earlier reported on the impact of the economic crisis on visa
applications in Ukraine (ref C).

3. (SBU) NIV Fraud: During this period, post completed a B1/B2
validation study for visas issued between June 01, 2007 and May 31,
2008. During this time, post issued 21,331 B1/B2 visas. The
validation study found a 4 percent overall overstay rate, virtually
all of which were unauthorized overstays. These results reveal an
increase in the number of applicants who did not return to Ukraine,
compared to a 2.7 overall overstay rate and 1.8 percent illegal
overstay rate based on a validation study of visas issued between
December 1 2006 and May 312007. However, the increase was within the
3.8 percent margin of error.

From March 2009 through August 2009, NIV officers referred 566 cases
to the Fraud Prevention Unit (FPU) for investigation. Fraud was
confirmed in 107 cases, and 69 cases are still pending investigation
results or officer review. Fraud was not confirmed in 390 cases.
Many of these cases were refused 214b because derogatory information
was uncovered during the course of the FPU investigation. The
average time for completing investigations on NIV cases remained
under two weeks.

NIV adjudicating officers generally do not consider documents
submitted by applicants due to widespread document fraud. As a
result, officers did not consistently use the Suspicious Documents
function, and checked the box only 49 times during the reporting
period. Consular will make it a priority for NIV officers to use
the function in appropriate cases, particularly cases referred to
FPU.

B1/B2 Fraud:

Post continues to encounter fraud in the form of fake employment,
relationships, and invitations; as well as groups used as a cover to
mask unqualified applicants.

During the reporting period, post experienced fraud connected to
local athletic organizations. For example, FPU interviewed a group
of kickboxing fighters purportedly going to compete in a martial
arts tournament in Orlando, Florida. The group was organized by the
president of the Ukrainian Kickboxing Federation, who held a valid
B1/B2 visa.

In the course of the investigation, FPU established that a number of
applicants were not bona fide athletes and were included in the
group by the president of the federation in order to get U.S. visas.
Further open source research on the president revealed his alleged
ties to organized crime and prior arrests on murder and extortion
charges, which he failed to indicate on his DS-156. When
re-interviewed by the Consular Officer, the president admitted the
arrests, but claimed he was innocent and was never convicted.

Post has identified a rapidly growing number of mala fide applicants
claiming employment with local travel agencies. FPU research
revealed connections between many local travel agents and a network
of visa fixers. Over the past few months, FPU has investigated
numerous cases connected with travel agencies involving
misrepresentation of employment, social ties, and purpose of travel.
Applicants often presented passports with unused UK or Canadian
visas and some Schengen travel history. Many were coached by the
travel agency before the interview to pose as either employees of
the travel agency or as friends of employees of the agency who had
been previously issued U.S. visas. The agency then arranged or
encouraged fake letters of employment and statements showing
non-existent bank account balances. In some cases, they also vouched
for the applicant's employment when contacted by the Consular
Section.

One recent case involved a female applicant who originally presented
herself as a legal advisor traveling to New York City for a weeklong

KYIV 00001687 002 OF 004


tour with a friend who works for the American Travel Group (ATG).
The ATG employee already had a U.S. visa. ATG is an international
business with offices located in Kyiv and Brooklyn, New York. The
agency is owned and run by an American citizen couple of Ukrainian
origin.

During the investigation FPU discovered that the subject had never
worked as a legal adviser and was, in fact, unemployed. As the
interview progressed, the applicant admitted that she was travelling
to the U.S. alone and was coached by ATG to pose as a companion of
one of the ATG managers. When FPU contacted ATG directly, the
employee in question stated that the applicant was her friend and
they were planning to travel together. During a subsequent FPU
interview, the ATG manager confessed that she was not friends with
subject and was not planning to travel with her. The manager's visa
was revoked. Subsequent text searches connect to ATG with several
other travelers who were later found to have misrepresented their
employment.

J1:

During the summer work and travel season, post experienced fraud in
the form of fake job offers and fake student credentials, as well
several cases in which seemingly bona fide applicants were supplied
with fraudulent or non-existent job offers by their agencies. (Ref
D) Post maintained a rigorous anti-fraud posture during the summer
work and travel season, increasing scrutiny of local agencies as a
source of bogus documentation and job offers.

H1B:

During the reporting period, post encountered a number of H1B
applicants who misrepresented their qualifications. In one recent
case, the applicant posed as the deputy chief of logistics for
Ukrainian company, with plans to work as the director of a childcare
center in Brooklyn. An FPU call to the applicant's employer
revealed that he was merely a dispatcher and had exaggerated his
title and responsibilities. During the interview, the applicant
admitted that he had no prior experience with any of the
responsibilities outlined in the position description for his future
job, and that he was hoping to learn these skills on the job. The
applicant also admitted that the petitioner was his mother, who
traveled to United States on a tourist visa several years ago and
was now an American citizen. Post sent the petition back to USCIS
with a recommendation for revocation.

4. (SBU) IV Fraud: From March 2009 through August 2009, IV officers
referred 48 cases to FPU. Fraud was confirmed in six cases and not
confirmed in six other cases. Thirty-six cases were still pending
FPU investigation, officer review, additional documents, or
information from the GOU or other agencies..

Post continues to see fraudulent CR1 and CR2 cases, which are often
connected to prior fraudulent DV cases.

In one recent CR-1 case, the Consular Officer suspected that the
applicant entered into marriage with an American citizen solely for
immigration benefits, and referred the case to FPU for
investigation. FPU established that the applicant, who claimed to be
employed as a cook since 2004, had been previously refused U.S.
visas three times. In 2005, she claimed to be a doctor and wanted to
visit her son, who won a Diversity Visa and immigrated to the U.S.
the applicant did not list a son in her DS-230 or I-130 petition.
Further FPU investigation revealed that the applicant's ex-spouse
received a DV-2 in 2005 as a pop-up spouse, and that her petitioner
was in fact still married to his real spouse in the United States.

Interestingly, a CCD text search conducted against this applicant's
purported son (as indicated in her 2005 NIV application) revealed
that from 2004 through 2007, nine different individuals applied for
U.S. visas claiming a close family relationship to the same "son" or
his spouse. Out of the nine applicants, eight were female, and three
of them claimed to be the "son's" mother. All of the applicants were
from Ivano-Frankivsk and Chernivtsi regions (high fraud areas). Five
of these applicants were issued B1/B2 non-immigrant visas, all five
traveled to the United States, and none complied with the terms of
their visas. FPU believes that the agency which handled the DV entry
for the "son" in 2005 retained his information (i.e. U.S. address,
phone number, etc.) and then sold it as part of fraudulent NIV
packages to other applicants.

Post forwarded the case to USCIS for possible revocation and the IV
applicant was found ineligible under INA 212(a)(6)(C)(I). FPU shared
its findings with Diplomatic Security and DHS in conjunction with

KYIV 00001687 003 OF 004


their ongoing investigation of Diversity Visa fraud in Ukraine.

5. (SBU) DV Fraud: The Diversity Visa program continues to be
exploited by individuals, "travel" agencies, and organized criminal
elements in Ukraine. Due to logistical constraints in Kyiv,
Ukrainian DV applicants have been processed at American Embassy
Warsaw for several years. FPU Warsaw reviews suspect cases and may
forward them to FPU Kyiv for further investigation. When suspect
applicants are detected remotely, post alerts Warsaw, and in cases
where the applicant appears connected to an ongoing DS investigation
or is of special interest, ARSO-I may request that the subject be
sent to Kyiv for an additional interview.

Post continues to see a significant percentage of Ukrainian DV
winners marrying (or divorcing and then remarrying a different
spouse) immediately upon notification of their winning entry. This
pattern is consistent with the established fraud scheme whereby a
third party pays an agency to be added onto a winning applicant's
package. In cases referred to post for investigation, comprehensive
relationship interviews have been very successful in identifying
this fraud and obtaining confessions.

Diplomatic Security Service (DSS) has an ongoing investigation
involving more than 3,000 suspected fraudulently-obtained Diversity
Visas to Ukrainian applicants over the last eight years, and FPU
Kyiv continues to assist this investigation. To date, post has
conducted dozens of DV fraud interviews and identified numerous
fraud rings located both in Ukraine and the U.S. DSS agents in the
U.S., working with DHS, ICE, Federal Task Forces, and local police,
have identified several key figures in these rings and obtained an
understanding of how the criminal networks function. These
interviews continue to demonstrate that Ukrainian DV fraud is a
highly organized and lucrative criminal enterprise. Last year,
Warsaw FPU, Kyiv FPU and ARSO-I Kyiv identified a new trend
involving Belarusian DV winners marrying Ukrainian and Russian
nationals. In many cases, these individuals were utilizing U.S.
points of contact and addresses previously associated with Ukrainian
DV agencies.

6. (SBU) ACS and U.S. Passport Fraud: Post experienced no change in
trends with respect to ACS and U.S. passport fraud. ACS staff
regularly communicate with NIV and FPU officers, and share
information when they encounter cases with ties to potential NIV and
IV fraud, as well as cases in which American citizens report being
defrauded by Ukrainian citizens (often marriage scams).

ACS staff recently discovered and investigated a potential passport
fraud case in which a Ukrainian citizen appeared at the consular
section to file a CRBA and passport application for her child, along
with the purported American citizen father of the child. ACS staff
noticed that the parents were not married, and the significantly
older father was in fact married to another woman in the United
States. The mother of the child had two prior NIV refusals. In
2005, she attempted to visit her mother in Chicago, who was married
to a person with the same name as the purported father of her child,
raising suspicion that the purported father is actually the husband
of her mother. In addition, an FPU interview with the subjects
revealed numerous inconsistencies in their story. ACS requested the
alleged father to provide a DNA test, and the case is pending the
outcome of this test.

7. (SBU) Adoption fraud: No change.

8. (SBU) Use of DNA testing: There was no change in trends
concerning the use of DNA testing at post. The IV Unit requested DNA
tests in approximately three cases during this reporting period. In
each case, the testing confirmed the relationship in question.

The ACS Unit requested approximately five DNA tests during this
reporting period. In each case, the testing confirmed the
relationship in question, or post is still awaiting test results.

9. (SBU) Asylum and other DHS benefit fraud: No change in trends.

10. (SBU) Alien smuggling, trafficking, organized crime, and
terrorist travel: No change in trends.

11. (SBU) DS criminal fraud investigations: The ARSO-I, FPU, and
the consular section as a whole maintain a strong working
relationship. The ARSO-I provides information from law enforcement
databases and other sources which are invaluable in detecting fraud.
The DSS investigation into Ukrainian DV fraud is progressing
rapidly. A network for information exchange has been established
between ARSO-I Kyiv and DSS agents in headquarters, field offices,

KYIV 00001687 004 OF 004


and task forces. Kyiv continues to provide DSS analysts with
suspect applicants, U.S. addresses, and U.S. points of contact as
they are discovered at post. In return, DSS agents have shared
Reports of Investigations confirming suspected fraud, identifying
visa fraud facilitators, and outlining larger fraud schemes.

12. (SBU) Host country passport, identity documents, and civil
registry: No change.

13. (SBU) Cooperation with host government authorities: No change
in trends.

14. (SBU) Areas of particular concern: FPU Kyiv enjoys excellent
cooperation in fraud matters from many other embassies in Ukraine.
In April, FPU organized a regional fraud prevention seminar
featuring presentations from the Office of Fraud Prevention Programs
(FPP), the Visa Office (VO), consular officers and staff from
American embassies in the region, and consular officers and staff
from a variety of foreign missions in Kyiv. The seminar was designed
to update participants on fraud trends in the region and the tools
to combat them, as well as promote cooperation and information
sharing between missions. (Ref E)

During this reporting period, FPU Kyiv conducted public meetings and
published advertisements in newspapers throughout the country to
support fraud prevention and educate the public about consular
issues and legal employment in the United States. Consular officers
and FPU staff conducted fraud prevention outreach trips in four
cities in Ukraine, which included press conferences and public
meetings to discuss visa fraud and legal employment in the United
States. A similar public outreach campaign is planned for September
and October of this year.

15. (SBU) Staffing and training: Post has a part-time FPM who spends
half of his time conducting NIV interviews. CA/EX approved an FS-03
FPM position and has paneled an officer for this position, to begin
in November 2010. Post currently has three FSN investigators, two
FSN clerks, and one temporary FSN clerk, with one temporary FSN
clerk position vacant.

Pettit

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