In addition, a police report may be needed to obtain the fraudulent application and other records the company has.

In all, the audit said, decisions by agency and state officials "greatly increased the number of apparently fraudulent applications."

The audit said the agency and the state "took action to address suspected fraudulent applications" once problems had been identified.

S.B.A. officials say they must be vigilant against fraudulent applications.

State and federal prosecutors said she submitted more than 1,300 fraudulent applications in 2004 and 2005, receiving an estimated $1 million from her customers.

Some 79 councils were able to provide a full or partial breakdown of the number of fraudulent applications detected over the last five years.

Now a variety of estimates by Federal officials and immigration experts place the number of fraudulent applications at somewhere between 250,000 and 650,000.

The exception concerns fraudulent applications for naturalisation (subject to a 10- year time bar after which action cannot be taken).

In its defense, the company said it haddetected many abuses itself and had thrown out fraudulent applications.

Many of the fraudulent applications were filed by Haitians and Jamaicans, he said.