The YMCA of Greater New York joined forces two years ago with a man with a history of skirting immigration laws to import nearly 4,000 foreign workers and students under a federal visa program to work in hotels and resorts across the country.
At the time the business relationship began, David C. Marzano and his company, Global Staffing of Atlanta, were under investigation by federal authorities. The investigation centered on allegations that he was illegally transporting and concealing foreign workers from Czechoslovakia and other countries who were assigned to jobs at resorts from Missouri to California.
Then, early last year, the Georgia business executive was indicted on those charges by a federal grand jury in Atlanta.
YMCA officials say they knew nothing about the investigation and learned of the indictment months after it was filed. Nor did they learn, until told by a reporter, that another Marzano company entered a guilty plea to similar immigration law violations in 1989.
It was only then, they say, that they severed ties with the company.
Officials of the Y, a nonprofit organization, collected a fee of $132 for each visa application handled by Global Staffing during the two-year period, or more than $400,000 in all. But a spokeswoman asserted that administrative and other costs ate up any potential profit.
"This is not a money-making operation," said spokeswoman Lenore Neier. "We charge $132 a head and that just about covers costs."
The Y's relationship with Marzano is the second within the past year to raise questions about the nonprofit's use of the government-sanctioned J-1 Exchange Visa Program, through which it brings in 20,000 foreign workers each year. The stated purpose of the J-1 program is cultural exchange and training, typically under the auspices of nonprofit organizations such as the Y. "Ordinary employment or work is strictly prohibited," according to the regulations governing J-1.
Earlier this year, Y officials acknowledged they had failed to realize that another for-profit organization for whom they processed visas - Maryland-based USA-IT - was not providing promised training to hundreds of electricians brought in from Eastern Europe.
A Sun investigation showed that USA-IT rented out electricians at a profit to construction companies around the country for up to 18 months. Besides doing electrical work, for which they were paid half the prevailing union rate, they often performed menial labor, sometimes digging ditches.
Stanley Colvin, who heads the U.S. State Department bureau that oversees the J-1 program, said that the issue of whether third parties should be allowed to participate in the visa program was under review. He said an outright ban on use of the program by staffing agencies such as Global Staffing and USA-IT is also a possibility.
He said the State Department looks to official sponsoring agencies such as the Y to properly administer their programs and does "not consider it appropriate for them to delegate away their statutory or regulatory obligations."
As is the case with Global Staffing, Y officials said they were unaware until informed by reporters that the man who runs USA-IT, Dennis A. Laskin, had a history of legal problems, having been convicted in 1993 of bank fraud.
Marzano has pleaded innocent to charges of conspiring to induce and encourage aliens to live and work in the United States illegally. He, his wife and a codefendant are also charged with illegally transporting and concealing the workers. A trial date has not been set.
The indictment was returned Feb. 26, 2000, and a second, or superseding indictment, was returned a little more than a month later.
Marzano, who lives in the Atlanta suburbs in a gated community, declined to comment on his relationship with the Y or his case. He runs the business out of his home, which was raided as part of the federal investigation that led to his indictment.
The indictment was not Marzano's first encounter with the law. In 1989, another company he ran, Cleaning Maintenance Specialists, entered a guilty plea to charges of using "false documents in the employment of illegal aliens."
"We had no knowledge of it," said Neier, referring to the current or previous criminal charges against Marzano and his company. She added that the Y ended its relationship with Global Staffing after learning of Marzano's legal problems this year.
The Y's relationship with the company dates to the fall of 1999, Neier said. She said that in 2000, 1,387 foreign workers were brought in through Global Staffing. This year there were 2,332. Some of the workers were brought in under 18-month visas, while others came in under visas allowing a three-month stay.
Neier said no visas were issued to Global Staffing after the discovery of Marzano's legal problems, but the workers "already in the pipeline" were being allowed to complete their scheduled stays in the United States.