Smugglers involved in Phase IV generally believe that the risks of arrest and prosecution diminish, the farther they travel--away from INS border enforcement resources.

The overwhelming majority of illegal aliens apprehended on the Southwest border are from Mexico. Illegal migrants from other countries which transit Mexico, known as "Other than Mexican" (OTMs) constitute less than two percent of the total. The Mexican economic situation, coupled with the long-standing drought in several regions in Mexico, has forced mass migration to cities along the Southwest Border and into the United States.

Mexican cities along the Southwest Border identified as major staging areas for alien smuggling include from west to east: Tijuana, Mexicali, San Luis Rio Colorado, Naco, Nogales, Agua Prieta, Ciudad Juarez, Ciudad Acuna, Nuevo Laredo and Matamoros. Alien smugglers operating in these Mexican cities have developed a sophisticated infrastructure to successfully counteract U.S. Border Patrol operations along the Southwest Border.

OTMs transit Mexico by a variety of means including various combinations of private vehicles, commercial buses, rail and domestic air carriers. Once the OTMs reach these locations, they blend into the much larger volume of Mexican traffic, crossing by similar means. Accurate figures for OTMs are sometimes difficult to gauge, as Central and South Americans will often falsely claim Mexican citizenship to avoid repatriation to their true country of origin. OTMs are more likely than Mexicans to transit under the control of smuggling organizations, due to their illegal status in Mexico and lack of familiarity with Mexican transportation options. Generally, they also pay higher fees for the same smuggling services.

More than half of OTM illegal aliens apprehended at the Southwest border come from Central America, primarily from Guatemala, Honduras and El Salvador. Peaceful resolution of regional conflicts culminating in the recent Guatemalan peace accords may result in a long term reduction in the migrant flow. Currently, economic factors appear to play a greater role and will continue to spur migration at current levels (more than 20,000 apprehensions annually).

Central America is also increasingly serving as a transit zone for aliens from other areas. Transit through the region is facilitated by smuggling rings as well as by hundreds of independent traffickers.

The next largest category of OTM migrants originate from South America, primarily from the Andean nations of Colombia, Ecuador and Peru. South Americans transit to Central America primarily by air, but also by maritime vessel.

Apprehension figures, shown on the chart above, are an indication of increased smuggling activity at the Southwest border--a 24 percent increase in the last two years.

Prosecutions of Alien Smugglers at the Southwest Border. INS enforcement efforts are beginning to pay off in the number of prosecutions:

Criminal cases filed in Texas, Arizona, California and New Mexico against alien smugglers apprehended at the Southwest border totaled 817 in 1996--more than double the 349 cases file in 1995.

The number of defendants prosecuted in these cases totaled 1,186 in 1996, compared to 563 in 1995.

Defendants found guilty in 1996 totaled 790, and 340 in 1995.

Arrests and Prosecutions of Smugglers Nationwide:

In FY 1995, 1,998 smugglers were arrested and 1,325 defendants prosecuted.

In FY 1996, 2,215 smugglers were arrested and 1,975 defendants prosecuted.

ALIEN SMUGGLING AT THE U.S. CANADIAN BORDER

Both Canadian and U.S. immigration authorities believe that alien smuggling is intensifying and becoming increasingly more organized at key points along the U.S.-Canadian border.

The number of aliens seeking illegal entry to the United States from Canada is minuscule compared to illegal traffic crossing the Southwest border. Nonetheless, as Southwest border enforcement continues to stiffen and the price charged for smuggling escalates, many choose the alternative of illegally entering the United States from Canada.

According to the INS Canadian Border Intelligence Center (CBIC), major Canadian cities with large ethnic communities, including Montreal, Toronto and Vancouver, serve as transiting points for smuggled aliens who enter Canada as visitors prior to attempting illegal entry into the United States. Canada has waived visitor visa requirements for both Mexico and Costa Rica. Smugglers appear to be taking advantage of these visitor visa waivers and are using Canada as a stepping stone to the United States for their illegal clients from Mexico and Costa Rica. The CBIC reports that, during FY 1996 and the first quarter of FY 1997, approximately 90 percent of all Costa Ricans attempting to enter the United States from Canada relied on a smuggler.

The cost of an airline ticket from Mexico City to any of the major cities in Canada is less than $500--a price highly competitive with current smuggling fees for crossing the Southwest border. Citizenship and Immigration Canada (CIC) recently reported a significant increase in Mexican applicants for refugee status since 1994. Mexican refugee claimants more than tripled--from 256 in 1994 to 975 in 1996. According to the CIC, the vast majority of Mexican refugee claimants undergo six to eight weeks of English language training. Following completion of the English course, half of the claimants withdraw their applications and apparently attempt to cross the border illegally into the United States.

The Royal Canadian Mounted Police (RCMP) estimates that the majority of smuggled illegal aliens arriving in Canada are moved south, across the border into the United States. Most of the alien smuggling across the U.S./Canadian border emanates from Canada's population centers located in the Quebec City -Windsor corridor to the east and the lower mainland of British Columbia to the west. In Toronto alone, the RCMP has identified 50 alien smugglers.

Statistics reveal a substantial increase in alien smuggling through the Akwesasne Native American (NAI) Reservation which straddles Ontario, Quebec, and New York State on a narrow stretch of the St. Lawrence River. The Border Patrol Sector, Swanton, Vermont, has registered a four-fold increase in arrests of smugglers and illegal migrants in this area over the past three years--from 67 arrests in FY 94 to 299 in FY 96. The reservation has become a favored passage for smuggling illegal migrants across a narrow stretch of the St. Lawrence River less than five miles from Massena, New York.

ALIEN SMUGGLING INSIDE THE UNITED STATES--A THREAT TO PUBLIC SAFETY

Transnational criminal alien smuggling organizations now have footholds in a number of our larger cities and are operating in the interior of the United States.

Alien smugglers increasingly are using our interstate highways for movement of illegal aliens to worksites across the country.

Like visa overstayers who enter the United States legally, but overstay their visas, illegal border crossers are lured by jobs, not only in border states, but increasingly at interior locations around the country. Increasing numbers of illegal aliens are headed for jobs in every region of the country: poultry processing in North Carolina, Tennessee and Maryland; garment manufacturing in New York; agriculture and service industries in Florida, Texas and California; meat packing in Indiana, Nebraska and the Dakotas; and construction and service industries in metropolitan Washington, D.C.

Over-the-road smuggling is increasing as the demand for seasonal workers intensifies and as INS border control strategy continues to divert illegal crossers from "traditional" crossing points.

The continued tightening of enforcement along the Southwest border has forced smugglers to move their assembly, or staging, points for illegal immigrants farther north and away from the Southwest border. The Houston area, for example, is the major staging point for routing groups of illegal workers crossing at McAllen and Laredo, Texas. From Houston, they are moved eastward, along Interstate Highways-10 and 20.

Chandler Heights, Arizona, is a major staging point for routing along Interstates-70, 76 and 80.

This interstate, cross-country alien smuggling is a threat to public safety. The smugglers use stripped-down vans, small trucks and even tractor-trailers--many of which are in poor mechanical condition and often overcrowded. Inexperienced drivers are traveling long distances without sleep and often at

excessive speeds. Accidents, involving fatalities and injuries, are mounting. Earlier this month, four major accidents involving alien smuggling in the Denver area occurred during a 12-day period.

Small transportation companies, operated by smugglers and known as camionetas, are springing up in Texas. These camionetas operate under federal transportation regulations as "common carriers" and, therefore, are not required to check the documentation or status of their passengers. Consequently, these smuggler-operated camioneta buses are able to transport illegal immigrants anywhere in the United States, with little or no fear of prosecution. Unlike legitimate bus companies, both small and large, smuggler-operated camionetas have no scheduled routes or stops and deliberately plan their trips to avoid detection. Smuggler-controlled Camioneta operations are based primarily in the Houston and Dallas areas.

The challenges in meeting this multi-faceted alien smuggling threat are large. It requires constant reassessment and adjustment of our enforcement strategy. INS is attacking smuggling organizations at all levels--in source and transit countries, at our borders and in the interior, maximizing use of all of the INS enforcement divisions and resources.

The INS is building a comprehensive strategy. It addresses smuggling at the local, regional, national and international levels. It must include a wide range of investigative, intelligence and deterrence-related tactics designed to deter, disrupt and dismantle these organizations and related criminal activity.

Priority is given to targeting major smuggling organizations that transport illegal aliens and narcotics across our international borders. Operations also target use of fraudulent and counterfeit travel documents. These bogus documents are the hallmarks of smugglers. Several recent operations illustrate adjustments to enforcement activity and the need for more focus on what is happening past our borders--inside the United States.

Operation "Camioneta." A New Orleans Border Patrol Sector intercept effort, resulted in the apprehensions of more than 1,200 illegal aliens over a period of four days in February and March of this year alone. Assembled by smugglers in the Houston area, these aliens were headed for illegal work, but were apprehended on Interstates 10 and 20 in Louisiana and Mississippi.

Operation Mountain Passes. This was a joint operation involving the INS Denver District Office and Colorado State and local police that ran for one month in 1996. This operation resulted in the apprehensions of 1,300 illegal aliens on Colorado highways and revealed that Colorado is a major transit point for long-haul organized alien smuggling. While 20 percent of the arrested aliens were headed for Denver, 80 percent were traveling to Chicago, New York and Florida.

ANTI-SMUGGLING OPERATIONS BEYOND U.S. BORDERS

Examples of anti-smuggling efforts beyond our borders include:

Operations Disrupt I, II and III were conducted by the INS District Office in Mexico City over the past two years. These operations were designed to gather intelligence and disrupt alien smuggling activity in the Caribbean.

Operation Disrupt III was a joint operation conducted in the Dominican Republic last fall. It involved INS, other federal agencies and the Dominican Republic Government and immigration officials.

Five alien smugglers were arrested.

More than 400 would-be illegal migrants carrying fraudulent documents were intercepted at Dominican Republic airports prior to boarding planes for four major U.S. airports.

Four major counterfeit travel document manufacturers were arrested.

More than 70 corrupt employees and officials within the Dominican Republic government were arrested for involvement with alien smugglers.

A Joint U.S.-Canada-Hong Kong operation last fall resulted in the arrests of 13 alien smugglers. These smugglers were responsible for illegal entry to Canada and the United States of more than 600 Chinese illegal aliens over the past three years. Smugglers had moved these Chinese nationals from Canada into the United States across a narrow stretch of the St. Lawrence River and through the Akwesasne Native American Reservation on the U.S. side of the border. The Border Patrol arrested a number of these aliens in nearby Massena, New York.

The Costa Rica-based Gloria Canales smuggling organization was crippled in December 1995, with the arrest of the ring leader, Canales, in Quito, Ecuador, as part of a joint U.S.-Honduran-Costa Rican operation to combat alien smuggling through Central America.

The Canales pipeline was in operation for a decade and had smuggled thousands of illegal aliens through Central America and Mexico to the United States--including Indian, Chinese, Ecuadorian, Peruvian, Cuban, Dominican, Colombian and Pakistani nationals.

Canales was charged with alien smuggling and was extradited to Honduras where she is being held for trial. If convicted, she faces a possible maximum prison sentence of 30 years. Following the Canales arrest, Costa Rican authorities raided 14 locations in Costa Rica, including the Canales residence in San Jose, the basis of her operation.

TOP 10 ILLEGAL ENTRANTS, OTHER THAN MEXICAN/CANADIAN

The chart below provides statistics on apprehensions of the top ten nationalities, other than Mexican and Canadian, seeking illegal entry to the United States in 1995 and 1996. These totals represent apprehensions at the borders and ports of entry.

Central America historically ranks second only to Mexico as the primary source of foreign nationals entering the United States illegally. Nationalities elsewhere in the world, such as migrants from the People's Republic of China, require major logistical support to reach the United States and rely heavily on organized alien smuggling.

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WORKSITE ENFORCEMENT

SMUGGLING INVOLVEMENT IN ILLEGAL WORKER PIPELINES

Reducing unauthorized employment and increasing the effectiveness of worksite enforcement is also high among INS priorities. But the potential for alien smuggling involvement with employers requires dedication of more time and resources toward determining the extent and inner workings of smuggling pipelines.

The extent of direct employer involvement is an unknown factor in the alien smuggling equation. Anecdotal evidence indicates that some employers put out a request for specific numbers of illegal workers to alien smuggling organizations, drawing a link between alien home communities, primarily in Mexico, to worksites in the United States. Intelligence collection and enforcement operations have yet to establish these links.

Additional intelligence resources will be necessary to identify the interrelationships between smugglers, document vendors and employers in targeted industries. There is anecdotal evidence to suggest that there likely are informal, unwritten arrangements between middle and lower management at worksites and alien smugglers for recruiting and transportation of illegal workers. Anecdotal evidence further suggests that subcontractors providing services to larger businesses and industries often have similar arrangements with alien smugglers.

As most illegal immigrants are drawn to the United States by the magnets of high wages and plentiful job opportunities, the INS strategy for combating illegal immigration combines border controls with enforcement operations at worksites.

The objectives of worksite enforcement initiatives include: 1) to reduce illegal employment opportunities; 2) to reduce the use and marketability of fraudulent documents; and 3) to protect the rights of citizens and lawful permanent residents with employment authorization. Unauthorized workers often are employed in low-paying and semi-skilled jobs.

INS is targeting 15 industries in its worksite enforcement strategy. They include: farm labor and management; miscellaneous food preparation; nursing and personal care facilities; general farm and field crops; heavy construction (excluding buildings); services to dwellings and other buildings; forestry; eating and drinking establishments; hotels and motels; meat products; masonry, stonework, tile and plaster; landscaping and gardening services; apparel and garment manufacturing; and roofing, siding and sheet metal work.

INS continues to expand efforts toward deterring illegal employment. INS is increasing its investigation and prosecution of employers who intentionally violate immigration and labor laws. Efforts are being expanded to: increase apprehensions of unauthorized workers; facilitate the hiring of legal workers; and to provide additional assistance to employers seeking to comply with the law.

WORKSITE ENFORCEMENT STRATEGY

The INS has adopted a strategy designed to bring about change in the workplace. This strategy involves investigating and prosecuting employers in industries and locations with a history of reliance on unauthorized labor, who intentionally employ unauthorized aliens and violate criminal statutes, violate other regulatory requirements, and/or who are repeat offenders. Additionally, the Service is pursuing case-development strategies that renew the Service's commitment to apprehending unauthorized workers from the workplace and removing them from the workforce.

INS began to modify its worksite strategy in 1995 in an effort to promote a stronger, more effective law enforcement presence in the U.S. workplace. Beginning in 1995, the INS drastically reduced the number of random compliance inspections assignments from 3,000 to 500 per year. This allowed criminal investigators to focus the majority of their efforts on lead-driven cases. This change, however, resulted in fewer completed cases, since lead-driven cases are more complex and time-consuming. For example, the average compliance inspection takes approximately 25 hours to complete, while lead-driven cases take 70 hours or more.

Coupled with the above changes to the worksite enforcement tactics, the INS began to re-deploy Border Patrol resources to border control activities in 1995. This sharply reduced the Border Patrol involvement in worksite enforcement from approximately 30 percent of the total worksite program to less than 5 percent.

With these new strategies, the INS sought to identify and work those cases which, by their nature, were more complex and time-consuming. The result was that, while INS was focusing its resources on identifying and prosecuting the serious offenders, the number of completed cases continued to decline.

PROSECUTIONS INCREASE

The worksite enforcement strategy appears to be working. Employer sanctions criminal cases completed, prosecutions, and convictions substantially increased in 1996:

Criminal cases completed in 1996 totaled 50, compared to 32 in 1995;

Prosecutions increased from 10 in 1995 to 15 in 1996; and

Convictions jumped from 2 in 1995 to 24 in 1996.

OPERATION JOBS

An important part of the INS worksite enforcement program is Operation Jobs, begun in Dallas in 1995 and now underway in 18 states. Operation Jobs recognizes that most employers want to comply with immigration hiring laws and do not want illegal workers in their workforce. Once information is obtained by INS on possible illegal workers at a business, INS officers conduct an audit of I-9

documents at the business to determine if illegal workers have used counterfeit documents to obtain

employment. If found to have unknowingly hired illegal workers, the business is linked with both public and private entities who can enough legal workers to replace the identified illegal workers.

When INS removes the illegal workers, the business suffers no disruption in it productivity, and legal workers gain employment. Operation Jobs has resulted in the removal of more than 5,000 illegal workers from worksites, freeing up jobs for legal workers. The innovative and cooperative approach of Operation Jobs has been honored with the Hammer Award, established by Vice President Gore to recognize excellence, initiative and creativity in government, as well as the Ford Foundation's prestigious Innovations in American Government Award.

ORGANIZED CRIME AND ILLEGAL IMMIGRATION

Organized crime syndicates are known to use alien smuggling operations to support and further their criminal objectives. Alien smuggling operations run by organized crime provide a source of funds and money laundering. These operations also facilitate movement of criminals and other operatives into the United States, as well as illegal entry of undocumented aliens. Intelligence and enforcement programs are addressing directly the following areas of organized crime: Asian organized crime, Russian organized crime, and Nigerian criminal enterprises.

FORMER SOVIET UNION

Migrants arriving illegally in the United States from the Former Soviet Union (FSU), although low in number (FY 1996 - 336 apprehended; Russians comprised 56 percent of this total), are of concern because of the organized crime element and former intelligence agency background of some of these

migrants. Russia and the new republics have eased travel restrictions for citizens.

These criminals, most of whom are members of Russian organized crime (ROC), pose as impostors using high-quality lost and stolen passports with fraudulently-obtained B1/2 (visitor), H (temporary employment) or L (intra-company transferees) visas. Travel agencies easily serve as intermediaries for

Russian travelers by obtaining a passport, as well as a visa, for fees ranging from $120 to $200. Russians seldom resort to altering passports, when they can easily obtain a made-to-order passport from travel agencies or document facilitators. Blank Russian passports are easily obtained from document vendors.

The rise in travel to the United States by FSU migrants has paralleled an expansion in organized criminal activity by ethnic Russian organized crime groups operating within the United States, to include organized alien smuggling through air, sea and land ports of entry. Historically adept at counterfeiting and altering sophisticated travel documents, ROC crime groups became more deeply involved in immigration fraud for two reasons:

To continue illegally inserting its members into the United States in furtherance of criminal activity;

To exploit alien smuggling and fraudulent document vending as money-making ventures.

For example, smuggled aliens who are unable to pay their way to the United States become indebted to ROC syndicates. In order to repay this debt, men usually become low-level extortionists or drug

couriers, while the women are forced into prostitution. ROC members traveling with FSU alien groups

are attempting to illegally cross the Southwest Border from points in Mexico, Central America and the

Caribbean. These illegal migrants usually make their travel arrangements prior to leaving Russia and are known to pay from $800 to $3,000 for their flights to Mexico. Upon arriving in Mexico, these migrants hire local smugglers who charge at least $50 for a border crossing into the United States.

PEOPLE'S REPUBLIC OF CHINA

Organized alien smuggling organizations based in the People's Republic of China (PRC) are highly active and heavily entrenched in the United States, Central America, and Asia.

PRC alien smuggling has long been dominated by the Fuk Ching Gang based in New York City. While principal members of the gang have been arrested in the past, the gang has expanded to the West Coast. Reports are that other Asian organized crime groups also are becoming involved in alien smuggling. One triad that has participated in this effort is the Wo Hop To based in San Francisco, California.

Asian organized crime factions are involved in extorting money from PRC aliens after their illegal arrival in the United States. Kidnapping is a popular means of extortion. Family members fear calling authorities due to the victim's illegal immigration status and a general distrust of the police.

Many PRC nationals are using various forms of document fraud to illegally enter the United States. Alien smugglers obtain travel documents from vendors for use by aliens to transit other countries. Most

PRC nationals who enter the United States through an international airport arrive, either with fraudulent documents, including photo-substituted or stolen PRC passports with ADIT (Alien Documentation, Identification and Telecommunication System) stamps, genuine documents fraudulently obtained, or no documents at all (destroyed along the route).

Non-immigrant visa (NIV) fraud is also becoming the popular means of illegal entry. The NIV most often used in China is the intra-company transfer (L-1) visa. When State Department and INS officials are able to investigate the L-1 visa petitions, they sometimes find that the company is just a storefront, either too small to warrant a L-1 visa applicant, or nonexistent.

NIGERIA

The primary route for illegal entry into the United States from Nigeria is JFK International Airport, New York. Organized alien smuggling and fraud efforts are dependent upon fraudulent documents. The Nigerian organized alien smuggling structures range from freelance entrepreneurs to organized criminal syndicates.

Immigration fraud involves two basic elements:

Counterfeit documents: Use of counterfeit Nigerian and U.S. passports, valid passports with altered visas, photo-substituted or altered passports, valid passports with fraudulent alien registration cards, fraudulent Nigerian passports with genuine INS documents obtained under a false name, visa fraud, false claims to United States citizenship through false birth certificates, fraud relating to state identification cards and drivers license, fraud related to Social Security cards and INS documents, and fraud related to private business identification cards.

Immigration benefit fraud: marriage fraud, student fraud, registry fraud, temporary protected status claims as Liberians, political asylum fraud (or representing themselves as nationalities of protected or asylum based countries), legalization (including extended amnesty) and special agricultural worker fraud, INS identity document impostor fraud (request for replacement cards), naturalization fraud, and other relationship fraud.

Many utilize the services of a Nigerian "facilitator" who assists them in procuring the necessary documents and submitting a fraudulent application to the INS for a sizable fee. A facilitator may have access to an immigration attorney, an immigration consulting agency, or other person(s) or entities. Facilitators may charge from $2,500 to $5,000 per application

IMPLEMENTATION OF NEW IIRIRA ENFORCEMENT PROVISIONS

We are hard at work in implementing the recently enacted enforcement provisions in the Illegal Immigration Reform and Immigration Responsibility Act (IIRIRA).

These provisions complement the Administration's comprehensive efforts to combat illegal immigration and provide us with much needed tools. IIRIRA authorizes increases in enforcement personnel, including investigators. Our FY 1998 budget reflects our commitment to increase the number of personnel, along the border, at our ports-of-entry and in the interior -- including $21 million to support 156 new positions for worksite enforcement.

In addition, IIRIRA creates a new expedited removal proceeding for aliens attempting to gain admission to the United States by fraud, misrepresentation or without valid travel documents. As you know, regulations covering this new process were promulgated February 28 and became effective April 1. This new process will enable INS to quickly remove certain arriving aliens without compromising legitimate asylum claims.

The new law also increases penalties for alien smuggling and document fraud and grants INS with wiretap authority to investigate alien smuggling, document fraud, citizenship fraud and passport fraud. We are working on implementing these provisions in the context of existing resources.

Also, there are three provisions in IIRIRA which allow INS to work in cooperation with State and local law enforcement authorities to enforce immigration law. This allows us to expand upon our cooperative efforts with these agencies and we are currently working on regulations to put in place the framework for implementation of these provisions.

These and other major provisions in the new law will greatly help in the battle against illegal immigration.

Mr. Chairman, my colleagues and I will do our best in responding to any questions you may have regarding this endeavor so important to us all. Thank you, Mr. Chairman.

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