The Washington Post is reporting that Democratic fundraiser Johnny Chung, the figure at the center of a fundraising scandal being investigated by Congress, set up phony business in California in order to bring Chinese executives in on L-1 intracompany transfer visas. The executives eventually converted to EB-1 permanent residency through the businesses.

The executives who benefited from the fraudulent companies also are listed as contributors to the Clinton-Gore 1996 campaign.

Chung's top assistant, Irene Wu, testified to Congress that the businesses created by Chung had no real business activities. Wu claims that Chung used made up invitation letters to associates in China inviting them to come to the US to business meetings and to oversee business projects.

One company, Marswell Investment Inc. was created by Chung in 1996 and listed Chung as vice president and Liu Chaoying, daughter of a retired Chinese general, as president. The company described itself as being in the business of importing and exporting automobile accessories. Nearly $80,000 was transferred from Hong Kong to a bank account for the business, but Wu testified that no business was ever conducted.

Chung claims the $80,000 comes from Chinese military intelligence, but Liu denies this charge.

The INS and the State Department have in recent years seen an upsurge in fraudulent L-1 cases from China and, in fact, Chinese L-1 cases undergo tremendous scrutiny before a visa will be issued. It is common knowledge among immigration lawyers that L-1 cases from China undergo much greater scrutiny than almost any other place except the countries of the former Soviet Union.