Local
Thursday, April 16, 2009

Labor uncovers massive sponsorship scheme

By Ferdie de la Torre
Reporter

The Department of Labor has uncovered a massive sponsorship scheme involving 24 alien workers who paid money to their “employer.”

Labor Administrative Hearing Officer Jerry Cody sanctioned Leon H. Lizama in the amount of $500 for each sponsorship submitted, for a total sanction of $12,000.

Cody permanently barred Lizama from employing foreign national workers in the CNMI.

Cody also referred Lizama's case to the Office of the Attorney General for possible criminal investigation.

The hearing officer ordered 19 alien workers to report to the Labor Enforcement Section to make arrangements for their repatriation.

Cody, however, allowed five other alien workers to seek new employers after they came to Labor, admitted the fraud, and assisted Labor with its investigation.

“Such assistance was instrumental in framing the department's case and establishing the truth with respect to this massive sponsorship scheme,” he noted.

Labor records showed that Lizama had represented to Labor that he owns and operates a commercial farm and a health supply service.

Labor began an investigation after it noticed that Lizama filed 23 transfer applications in 2007, while at the same time declining to renew six out of seven of his current employees.

Labor subsequently denied 24 of Lizama's applications. The 23 workers appealed the denial.

Lizama first denied engaging in any sponsorship, but then changed his story at the second hearing on July 7, 2008, admitting that all the applications were actually sponsorship agreements.

Under the arrangement, Lizama would file employment application offering non-existent jobs to workers in exchange for a payment from the worker.

The workers each paid $50 per month for three months. Each worker would be responsible for paying his or her labor processing fees, including bonding.

Cody said Lizama and the workers committed fraud against Labor by submitting permit applications that purported to evidence actual employment when, in fact these arrangements were nothing more than sponsorships.