Sham universities create student visa loopholes terrorists could exploit

Immigrant student Bhanu Challa unexpectedly traded her anticipated diploma for handcuffs in 2011, during a federal crack-down on universities suspected of visa fraud.

“I was blank, totally blank … ,” Challa said, recalling her shock. “I didn't know what to do, who I could approach.”

While still in India in 2010, Challa perused the website for Tri-Valley University and dreamed of coming to the United States to pursue her master’s degree. The site featured photos of smiling students clad in caps and gowns, and promised a Christian environment in a leafy San Francisco Bay-area suburb.

Months later, Challa was arrested, along with other Tri-Valley students, and questioned by federal investigators about her motives for being in the country. They told her Tri-Valley was a sham school and alleged it was selling both school and work documents to foreigners while providing very little actual instruction.

Unfortunately Tri-Valley is not alone. In recent years, several other schools have been raided or shut down by federal authorities on allegations of visa fraud.

Others include California Union University in Fullerton, Calif., College Prep Academy in Duluth, Ga., and Herguan University in Sunnyvale, Calif. Both California Union and College Prep are now closed and their former presidents convicted on a variety of visa-related charges. Herguan University’s CEO, Jerry Wang, is currently under investigation for visa fraud. Wang maintains his innocence, and the school remains open, for now.

The sham schools appear to be lucrative businesses. Susan Xiao-Ping Su, founder and former president of Tri-Valley, raked in more than $5.6 million in student fees that she spent on commercial real estate, multiple personal homes, and other luxuries.

“If there’s a way to make a buck, some people will do it,” said Brian Smeltzer, chief of the Counterterrorism and Criminal Exploitation Unit of U.S. Immigration and Customs Enforcement’s Homeland Security Investigations.

But the schools also are a potentially dangerous business. Since Sept. 11, 2001, 26 student visa holders have been arrested in the United States on terrorism-related charges. Every year, tens of thousands of students overstay their visas, and many of them remain indefinitely as undocumented foreign nationals. The Obama administration was sharply criticized last September when media reports revealed federal authorities couldn’t locate 6,000 foreigners who had entered the country on student visas.

“My greatest concern is that they could be doing anything,” Peter Edge, the U.S. Immigration and Customs Enforcement official who oversees investigations into visa violators, told ABC News. “Some of them could be here to do us harm.”

And the schools are a source of financial loss and heartache for students like Challa, who said she paid nearly $3,000 for her first semester at Tri-Valley, but never received an assignment or exam. At the time the school was raided she was in the process of transferring to another university. She later completed her MBA and now works in the United States.

“I had to pursue my studies here, I had to get a job,” she said. “I was the first person in my family to come to the U.S.”

Su was convicted last year on 31 counts related to the fraudulent activity at Tri-Valley and sentenced to 16 years in prison. The school is now closed.

The Associated Press contributed to this story.