Bogus loans used in student visa scam
Guy Healy, Higher education writer
Article from: The Australian
October 24, 2009
FALSIFIED Indian bank and loan statements are being used to underwrite a people-smuggling operation centred on student visas, forcing the cancellation of at least 500 applications from Indian nationals.
Sources familiar with the racket say it is based on false bank loans with a face value of up to $90,000 being put forward as evidence that student visa applicants from the subcontinent had the means to study in Australia .
The Department of Immigration and Citizenship yesterday confirmed that more than 500 Indian nationals had their student visa applications refused over bogus financial documents, including loan statements, in the three months to September.
Another 150 immigration agents have had their access to the eVisa online visa application system suspended.
Immigration investigators were now “targeting” scams in the vocational education and training sector, the department said.
“Very high levels of document fraud, largely relating to financial capacity … have been detected in India mostly but not exclusively in the VET sector,” it said in a statement to The Weekend Australian.
The development comes as a second education figure backed revelations by this newspaper that highly integrated networks of education agents and college and other business owners had created “a chain of exploitation”.
Criminal networks operating at the bottom end of Australia 's $16billion export education industry were abusing the student placement system to smuggle people into the country, the head of the peak body of overseas student educators warned yesterday.
“It's not surprising that criminal elements have found ways to creep between the cracks in the student migration process,” said Dennis Murray, executive director of the International Education Association of Australia.
Mr Murray's comments follow claims by the head of the country's largest overseas student recruiter, IDP's Tony Pollock, that the networks were offering a one-stop shop to improperly access study placements in Australia, including false English credentials, access to a college, accommodation and even part-time work.
“This could be construed as people-smuggling,” Mr Pollock said.
Indian students said that users of the student visa racket pay up to $18,000 to education agents in “interest” on a non-existent $90,000 bank deposit to circumvent Australian student income support requirements.
“Most of the time there's no actual lending of large sums of money. The education agent has a corrupt mate in a bank who creates a fake bank statement,” said one overseas student.
Hundreds, possibly thousands of students are entering Australia via the illegal pipeline, industry sources say. “They (the networks) are family enterprises end to end,” one diplomatic source said.
Mr Murray stressed that official data showed more than 80 per cent of overseas students were happy with their experience in Australia . However, some took out excessive loans and “painted themselves into a corner”.
All International Students Association president Navjot Singh said exploitation by overseas education agents was so serious that Australia should abolish them and process applicants through a central admissions centre.
UNSW business school international banking and finance expert Vic Edwards said the mechanism was virtually undetectable by the banks' senior management, since the corrupt regional bank manager would create the documents offline.
“It's credible, invisible and clever,” Mr Edwards said.