These are types of intangibles that never appear on balance sheets or income statements but that increasingly define success in a world driven by the production of intellectual capital that can't be weighed but that can definitely be counted.
US authorities recently conducted raids to halt a practice that represents a new feature of the global value chain: birth or maternity tourism, the practice of traveling to a country that offers citizenship to those born there despite the nationality of their parents.
The US and Canada are primary targets for this activity because with citizenship for the newborn comes qualification for a host of other benefits for him or her, as well as for their parents. Free education, protection under the 'host' nation's laws as well as economic and social opportunity.
The costs start at $38,000. Assessing what the market will bear for such intangible benefits is more art than science. Just for starters, tuition, room and board at a top public university could run $40,000 a year (though many are available for less. For a student with excellent grades and standardized test scores, those expenses can be waived. But the ability to live in a country which respects the rule of law (most of the time), offers the chance to start a business without fear of confiscation or bribery demands, or to work and live in a relatively free society? Priceless. Suddenly that $38K looks like a pretty good deal. JL
Victoria Kim and Frank Shyong report in the Los Angeles Times:
Agencies advertise services offering newborns a U.S. passport and the benefits that come with American citizenship, including public education and immigration benefits for parents. Taiwanese, Korean and Turkish mothers are also known to engage in birth tourism, but the practice has become particularly popular with the wealthy Chinese middle class.
Xiaoyan Zhang made it clear that she had one objective for traveling to the U.S. from China — to give birth so her child would automatically be an American citizen.
Rest assured, a representative of You Win USA, a company advertising “maternity tourism” services, told Zhang. For fees starting at $38,000, the firm guides pregnant women through the process, and she would soon be in the U.S. on a tourist visa to await the birth of her child at a luxury Irvine apartment complex.
The company instructed Zhang and her cousin to book tickets to a popular tourist destination, such as Hawaii or Las Vegas, purchase a tour package she had no intention of using and fabricate an employment history to convince immigration officials that she would not overstay her visa, according to a federal affidavit unsealed Tuesday.
In fact, the woman and her cousin were undercover Homeland Security Investigations agents, according to the affidavit, which documented their discussions with You Win USA officials. In a coincidence, the operators of You Win USA set up their operation in an apartment complex across the street from the federal agency’s Irvine field office.
You Win USA was one of three operations raided Tuesday by federal agents targeting “maternity tourism” schemes in which pregnant Chinese women travel to the United States, usually on tourist visas, so that their children will be born U.S. citizens.
The raids marked the largest federal investigation of its kind aimed at cracking down against the widespread practice of foreign nationals traveling to the U.S. solely to give birth.Swarms of agents descended on apartment complexes in Los Angeles, Orange and San Bernardino counties, carting out boxes of documents, diaper containers and trash, and interviewing pregnant women to the backdrop of wailing babies.
Investigators said they were looking for evidence of visa fraud, conspiracy and other crimes in which women were helped to fabricate documents for visa applications and coached to falsely claim that they were traveling to the U.S. for tourism. Women were instructed to travel early in their pregnancy and wear loose clothing to avoid detection, and enter the U.S. through popular tourist destinations rather than Los Angeles, where authorities are more likely to suspect birth tourism, according to the affidavits.
“U.S. might refuse entry [if] the belly is too big,” one business stated on its website, advising women to travel at 24 to 30 weeks into their pregnancy, according to an affidavit. “The size of the belly is quite important to determine when you should arrive in Los Angeles.”
The businesses, known as “maternity hotels” or “birthing centers,” present a headache for local government and law enforcement because it is not necessarily illegal for foreign nationals to give birth in the U.S. Many agencies openly advertise services offering assistance in getting newborns a U.S. passport and extolling the benefits that come with American citizenship, including public education and immigration benefits for parents.
Taiwanese, Korean and Turkish mothers are also known to engage in birth tourism, but the practice has become particularly popular in recent years with the newly wealthy Chinese middle class.
Cities have cited such operations for building, fire or zoning violations, but they often swiftly relocate and reopen for business. One affidavit quoted a law review article estimating that about 40,000 of 300,000 children born to foreign citizens in the U.S. each year are the product of birth tourism.
At a Rowland Heights apartment complex where Star Baby Care operated, about 40 personnel from various law enforcement agencies pounded on doors early Tuesday. Teams of agents aided by interpreters entered about a dozen apartments, conducting interviews and collecting evidence. Some poked flashlights into units where residents wouldn't open the door.
“Baby here,” said one agent, beckoning a colleague to an apartment.
Units that authorities said were used by Star Baby Care were lined with green AstroTurf mats and a row of plants on the outside and furnished inside with Ikea-style furniture.
One woman interviewed by federal agents Tuesday said she didn’t understand why investigators came knocking on her door.
“This is a good company and I've been treated well,” she said in Chinese, asking that her name not be used because she was concerned about legal ramifications.
She said she came from China late last year and went sightseeing throughout San Diego and Los Angeles — skipping Disneyland because of the measles outbreak — until she gave birth to a son a few weeks ago. She said that even though she has no intention of living here, she wanted her son to be able to apply to U.S. colleges because “America has the world's best universities.”
At another apartment raided by federal authorities, a man said he and his wife were not in the country for maternity tourism. The man, who only gave his last name, Chen, said they had green cards and were residents of Rowland Heights who were using Star Baby Care’s services for postpartum care, a traditional practice known as “confinement.”
Operators of the agencies in Tuesday’s raids could not be reached for comment.
No arrests were made, though authorities said those involved could face tax evasion and money laundering charges for hiding income from the lucrative business.
Agents wrote in affidavits that the schemes also defrauded the hospitals where the women gave birth. Even though the mothers paid birth tourism operators tens of thousands of dollars in fees, they paid local hospitals nothing or a reduced sum for uninsured, low-income patients, according to the affidavits.More than 400 women associated with the Irvine location have given birth at one Orange County hospital since 2013, agents wrote in the affidavit. One of the women paid $4,080 out of $28,845 in hospital bills when her bank account showed charges at Wynn Las Vegas and purchases at Rolex and Louis Vuitton stores, the affidavit said.
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