3 indicted in 'pay-to-stay' school scam that allegedly enabled foreign nationals to remain in US as 'students'

LOS ANGELES — Three Los Angeles-area residents responsible for operating a network of four schools were arrested Wednesday on federal charges for allegedly helping hundreds of foreign nationals remain in the U.S. as foreign students, even though they never attended classes.

The three defendants allegedly ran a "pay-to-stay" scheme through three schools in Koreatown – Prodee University/Neo-America Language School; Walter Jay M.D. Institute, an Educational Center (WJMD); and the American College of Forensic Studies (ACFS) – and a fourth school currently operating in Alhambra, Likie Fashion and Technology College.

The three defendants are named in a 21-count indictment returned Tuesday by a federal grand jury. The indictment alleges a conspiracy to commit immigration fraud, a host of immigration offenses and money laundering. The indictment also contains an allegation that would require the defendants to forfeit property and proceeds derived from the fraud scheme, which investigators estimate took in as much as $6 million a year in "tuition" payments.

“Immigration fraud schemes potentially compromise national security and cheat foreign nationals who play by the rules," said Acting U.S. Attorney Stephanie Yonekura. "In this case, officials at several schools allegedly abused their responsibility to ensure that only legitimate foreign students were allowed to the stay in the country. This type of fraud against the United States will be thoroughly examined to bring those responsible to justice and to protect the integrity of our immigration system."

Those named in the indictment unsealed Wednesday are:

• Hee Sun Shim (also known as Leonard Shim and Leo Shim), 51, of Beverly Hills, the owner and manager of the schools;
• Hyung Chan Moon (also known as Steve Moon), 39, of Los Angeles, who assisted with the operation and management of the schools; and
• Eun Young Choi (also known as Jamie Choi), 35, of Los Angeles, a former employee who assisted with the operation and management of the schools.

The defendants, who were taken into custody by special agents with U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), are expected to be arraigned on the indictment Thursday in U.S. District Court.

The investigation in this case began in 2011 after a compliance team from HSI’s Student and Exchange Visitor Program (SEVP) paid an unannounced visit to Prodee University’s main campus on Wilshire Boulevard. During the visit, the team observed only one English language class with three students in attendance, even though records for the Student and Exchange Visitor Information System (SEVIS) showed more than 900 foreign students were enrolled at Prodee’s two campuses. That same day, the SEVP team made an unannounced visit to ACFS where they found only one religion class in session with a single student present. At the time, SEVIS records indicated that ACFS had more than 300 foreign students in active status.

During the ensuing investigation, HSI special agents identified several dozen foreign nationals, primarily from South Korea and China, who originally entered the U.S. as F-1 non-immigrant students to attend other SEVP authorized schools, but subsequently transferred to schools in the Prodee network. These students lived across the nation, indicating that they were not actually attending classes at Prodee or the other schools.

As detailed in the indictment, Prodee and its affiliated schools were authorized to issue a document certifying that a foreign national had been accepted to a school and would be a full-time student. The document –"Certificate of Eligibility for Nonimmigrant (F-1) Student Status - for Academic and Language Students," commonly called a Form I-20 – made students eligible to obtain an F-1 student visa allowing them to enter and remain in the U.S. while making normal progress toward completing a full course of study.

The indictment alleges that Prodee and the other schools issued Form I-20s to foreign nationals who were not bona fide students, had no intention of attending the schools, and lived outside of California. As part of the conspiracy, Shim and Choi allegedly were involved in the creation of bogus student records, including transcripts, for some of the students for the purpose of deceiving immigration authorities. The indictment further alleges that Shim would transfer a purported student from one school to another to avoid arousing the suspicion of immigration authorities about "students" who had been in the U.S. for lengthy periods of time.

In exchange for the Form I-20, a student would make "tuition" payments of as much as $1,800 to "enroll" for six months in one of the schools, according to the indictment.

The indictment charges Shim, Moon and Choi with conspiring to commit immigration fraud. Shim is charged with 13 counts of use or possession of an immigration document procured by fraud; and Moon and Choi are each charged with one count of the same offense. Additionally, Shim is charged with three counts of encouraging illegal residence, as well as two counts of money laundering.

The conspiracy count carries a statutory maximum sentence of five years in federal prison. The substantive immigration fraud charges each carry up to 10 years in prison. The money laundering charges carry a potential penalty of 20 years.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty in court.

Effective immediately, Prodee and its affiliated schools will no longer be able to access SEVIS, and HSI will be seeking to withdraw the schools’ SEVP certification, which will bar the institutions from enrolling foreign students. Foreign students who are currently enrolled at any of these schools should contact SEVP representatives for further instructions at (703) 603-3400 weekdays between 7 a.m. and 8 p.m. EDT. Additional information for affected students has also been posted on the SEVP Web page on ICE’s website.

SEVP monitors approximately one million international students who are pursuing studies in the U.S. on F and M visas. It also certifies schools that enroll these students and manages the SEVIS database, which houses information on international students, exchange visitors and their dependents. In addition to unannounced site visits to SEVP-certified schools, SEVP’s compliance unit has implemented a number of measures to ensure that only bona fide U.S. schools can enroll international students, including the use of a risk assessment tool, requirements for regular recertification, and the deployment of field representatives to visit certified schools twice yearly.

The HSI-led investigation into Prodee is ongoing. HSI has received substantial assistance with the case from U.S. Citizenship and Immigration Services’ Fraud Detection and National Security Division.