Feds: 3 Collected Millions in Fraudulent School Scheme
Michael Martinez and Paul Vercammen, CNN, March 11, 2015
Three area residents were arrested and charged Wednesday for allegedly operating four Southern California schools for Korean and Chinese students who never attended classes and lived in other states on student visas in a “pay-to-stay” scheme.
The three educators collected as much as $6 million in annual tuition from an enrollment of about 1,500 foreign students who were largely from South Korea and China, said federal prosecutors.
The arrests came after a federal grand jury indicted the three defendants Tuesday on charges of conspiracy to commit immigration fraud, money laundering and other immigration offenses.
Hee Sun Shim, 51, of Beverly Hills, is the owner and manager and of the postsecondary schools and is charged with 13 counts of use or possession of an immigration document procured by fraud, authorities said.
The two other defendants are each charged with one count of that same offense: They are Hyung Chan Moon, also known as Steve Moon, 39, of Los Angeles who assisted in the operation and management of the schools; and Eun Young Choi, also known as Jamie Choi, 32, of Los Angeles, a former employee who also assisted in the operation and management of the school.
Shim, who also went by Leonard Shim and Leo Shim, is also charged with three counts of encouraging illegal residence, as well as two counts of money laundering, prosecutors said.
Three of the schools are in Los Angeles’ Koreatown neighborhood: Prodee University/Neo-America Language School; Walter Jay M.D. Institute, an Educational Center (WJMD); and the American College of Forensic Studies (ACFS), authorities said.
The fourth school is currently operating in Alhambra, California: Likie Fashion and Technology College, authorities said.
“What we’ve broken up is a pay-to-stay scheme,” said Claude Arnold, special agent in charge of the Los Angeles office of U.S. Immigration and Customs Enforcement.
“That’s a scheme where institutions purport to be schools, but are really not doing any education whatsoever,” he said.
Prodee University/Neo-America Language School was located on the fifth floor of a Los Angeles office tower near the Koreatown neighborhood, but Homeland Security Investigations agents said they found the school “abandoned” during their raid on Wednesday. The agents allowed CNN to attend the raid.
The school featured classrooms, administrative offices and a small library, but no one occupied the spaces.
In fact, the abandoned school brought to mind a movie set, filled with props and decorations, but no actors.
In one small room, a CD player serenaded empty desks with classical music. The tiny library featured USC and UCLA pennants. The television wasn’t even plugged in. One federal agent said many of the students listed on the school rolls were older, in their 30s, 40s and 50s.
Another document with the state bureau indicates Prodee had a 73% graduation rate in 2011 and a 60% rate in 2010.
But the indictment alleges that students actually lived Nevada, Texas, Washington state and Arizona.
The schools were authorized by the federal government to issue a document that certified a foreign student had been accepted to a school and would be attending classes full time in the United States, authorities said. The document, called a Form I-20, made a student eligible for a F-1 student visa.
In exchange for that form, students paid $1,800 tuition to enroll in one of the schools for six months, authorities said.
During their investigation, authorities interviewed 35 students, mainly from South Korea, and found none resided in Los Angeles, officials said.
An unannounced federal inspection of Prodee’s main site in 2011 found only one English class with three students, though the school listed an enrollment of 900 students for its two sites, prosecutors said.
On the same day, federal authorities also visited the American College of Forensic Studies found only one religion with one student, though the school claimed an enrollment of more than 300 foreign students, prosecutors said.