Some 570 Filipino and Korean nurses were brought into the United States on illegal visas and placed in U.S. nursing homes and hospitals under a scheme uncovered by U.S. diplomats in Manila.
The scheme paid the foreign nurses substandard wages and housed them in poor conditions while driving down wages for U.S. nurses, U.S. officials said.
On Jan. 14, federal prosecutors in Dallas announced guilty pleas by five people involved in the scheme. There was no indication charges would be filed against the institutions employing the nurses.
The ringleader, Billy Denver Jewell, a nursing home operator in Lubbock, Texas, pleaded guilty to money laundering, wire fraud and aiding and abetting felonies. He filed so many applications for H-1A visas that the U.S. Embassy in the Philippines took notice and initiated a 33-month investigation, the government said.
The H-1A program was created in 1989 to allow more foreign nurses in to ease the nursing shortage. The program ended in 1995. It required healthcare operators to certify that domestic nurses could not be found to staff a specific facility. Operators also had to certify the nurses would be paid prevailing U.S. wages.
The program has long been a bone of contention between the American Nurses Association and hospitals and nursing homes that petitioned for H-1A visas. The ANA charged that foreign nurses were undercutting U.S. wages as the nursing shortage turned into a surplus.
In the latest case, most of the nurses brought in under the smuggling ring did not end up working at the facility that petitioned for them but were sent to nursing homes and hospitals in 35 states, prosecutors said.
At deadline, the government released a partial list of the nursing homes that employed the nurses but didn't identify the hospitals involved.
Others who pleaded guilty include:
Holly Arthur Estreller, who owns Nurses Exchange of America in Los Angeles. According to the U.S. attorney's office in Dallas, Estreller made a deal to pay Jewell $1,000 for each nurse he brought in. Then Estreller charged the nurse $2,500 for his services, knowing the nurse would not be employed by a Jewell nursing home. He pleaded guilty to visa fraud and aiding and abetting.
Haesook Kim, owner of International Nurses Exchange of Wayne, N.J., who agreed to furnish 20 Korean nurses for employment at Jewell's Southern Manor Nursing home in Lubbock. She paid Jewell $19,000. She pleaded guilty to visa fraud and aiding and abetting.
Sidney and Veronica Hewitt, owners of S&V Health Care Recruiting of San Diego, brought in nurses under visa petitions signed by Jewell, on the pretense they would work in Texas. They then placed the women in California facilities, where they worked as nurse's aides for $5 an hour. The Hewitts charged the nurses $5,500 each. Sidney Hewitt pleaded guilty to visa fraud and aiding and abetting. Veronica Hewitt pleaded guilty to unlawful entry of an alien and aiding and abetting.
Nelson Sin, owner of International Medical Personnel of Houston, paid Jewell at least $504,000 to bring in about 351 nurses from the Philippines, prosecutors said. Sin charged the women $5,000 to $7,500, but 268 of the nurses didn't end up working for the facility that petitioned for them. Sin, of Sugar Land, Texas, has been charged with 274 counts but is now a fugitive.
The five have yet to be sentenced.
Cheryl Peterson, a senior policy fellow at the ANA, said the scheme had such an effect on nurses wages in Lubbock that the Texas Nurses Association filed a complaint with the regional office of the U.S. Labor Department's wage and hour office. Prevailing wages for registered nurses dropped to $11 an hour from $14, the nurses association said. The federal task force estimated that U.S. nurses lost $13 million annually in wages because of the illegal visa ring.
In a news conference, U.S. Attorney Paul Coggins said: "It's very likely that those nursing homes, hospitals and clinics were not aware of what was going on."
But Peterson disagreed. "I'm less likely to believe that the hospitals and nursing homes didn't know they were exploiting these people," she said. "How can they not know that? They know what they're paying domestic nurses."
Even though they knew they were being exploited, the illegal nurses were unlikely to complain because they feared they'd be deported to even lower wages and worse living conditions, Peterson added.
"These hospitals and nursing homes were buying their silence by threatening they'd be sent home," she said.