Wright State settles 3-year federal visa investigation for $1M

Credit: DaytonDailyNews

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Wright State will pay the feds $1 million to settle federal visa probe.

Credit: DaytonDailyNews

After more than three years, Wright State University’s board of trustees agreed Friday to settle a federal investigation into H-1B visa misuse by the school for $1 million.

The U.S. Attorney’s Office will not pursue civil or criminal prosecution and for its part Wright State has agreed to pay $1 million in three installments over the next two years and has agreed to cooperate in any additional investigations stemming from the federal probe.

Per the agreement, Wright State is also required to have an outside counsel audit its university-sponsored H-1B visa applications on an annual basis for two years.

“This agreement is an important step for the university to put this matter behind us and allow us to move forward with the improved oversight system we put into place when this problem came to our attention more than three years ago,” Board chairman Doug Fecher said in a prepared statement. “We’ve done a comprehensive policy and procedures audit, we’ve expanded and improved our internal legal department, and we’ve made many organizational changes and numerous reforms to prevent this from happening again.”

» TIMELINE: Federal investigation into Wright State visa ending

Upon compliance with the terms of the agreement, Wright State’s involvement in the matter will be officially concluded, according to the university. Fecher declined to comment in person on the deal and a spokesman said WSU president Cheryl Schrader could not comment.

The deal includes “any crimes related to the conspiracy to commit visa fraud from at least December 2010 through 2015,” according to the non-prosecution agreement. The crimes include but are not limited to money laundering, perjury, “fraud and misuse of visas, permits and other documents,” and “conspiracy to defraud the United States.”

When the federal investigation came to light in 2015, it led to four administrators being suspended. University researcher Phani Kidambi, general counsel Gwen Mattison, provost Sundaram Narayanan and senior advisor to the provost Ryan Fendley were all suspended in 2015.

Mattison agreed to retire in August 2015 with a $301,331 separation payment, Kidambi resigned in August 2017, and the university fired Narayanan and Fendley.

“These employees fell well short of our high standards, which is why we held them accountable,” Fecher said. “We have made sweeping changes in how we handle H-1B visas and strengthened this university by implementing compliance reforms and transparency since the United States Attorney’s Office notified us of these issues.”

Following the 2015 suspensions, this news organization revealed that Wright State sponsored 19 foreign workers who came to the U.S. to work at an area information technology staffing company that paid the workers less than what local graduates typically make for similar IT work. Immigration experts have said it’s possible the arrangement violated immigration laws designed to prevent staffing agencies from trafficking in cheap labor from overseas.

Wright State must pay its first installment of the $1 million within the next 60 days, according to the agreement. Though Wright State is in the midst of a budget crisis, chief business officer Walt Branson said the university would be able to afford the $1-million payment and that it shouldn’t have an impact on this year’s budget.

» RELATED: Wright State moving forward with new $6.5-million archives center

In an attempt to begin correcting years of overspending, Wright State trustees slashed more than $30.8 million from the school’s fiscal year 2018 budget in June 2017. Those cuts ended up not being enough though and the university ended up reducing spending by around $53 million total that year. This June, trustees approved a fiscal year 2019 budget that projected another $10-million decline in revenue.

The end of the visa probe brings to a head years of a federal investigation that hung over Wright State like a cloud and is thought to have potentially damaged the school’s reputation and may have been part of what caused a decline in international enrollment, administrators have said. During the probe’s time, the university has had three presidents, including former president David Hopkins who abruptly retired in March 2017, interim president Curtis McCray and current president Cheryl Schrader.

In April 2017, Wright State released a 104-page audit that painted a picture of conflicts of interest, lack of fiscal controls and mismanagement at the school.

The audit named four area companies linked to WSU in the visa investigation, including Lexis/Nexis, UES, Inc., Universal Technology Corporation and Web Yoga. All four had contracts with Wright State Research Institute or its contracting arm Wright State Applied Research Corporation that included work done by people using H-1B visas obtained by Wright State between July 2010 and June 2015.

The audit’s revelations — which had been withheld for two years by the school as the federal investigation was conducted — received attention from several area lawmakers and statewide leaders, including Gov. John Kasich.

“What’s clearly evident is the previous administration’s disturbing, long-running practice of seeking to prop itself up by cultivating a regime of secrecy that allowed it to conceal problems from key leaders,” Kasich said through a spokeswoman in April 2017. “It’s incumbent upon this era of university leaders to turn the page, restore confidence and commit itself to the transparency and accountability essential to healthy organizations.”


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