Lots of folks don’t knoq/understand that once they apply for a US citizenship then their whole immigration journey to US becomes a part of scrutiny, this includes any application that applicant made with US Consulate and USCIS in the past, even at the port of entry in US upon arrival. Also, many people mistakenly argue that all these issues should have been raised during the time of LPR and not at the time of citizenship. But they are completely wrong. During Citizenship time, their whole record is reviewed very carefully and investigated thoroughly. During the citizenship time, officer can question even a small trip that applicant might have made 30 yrs ago to US, wherein applicant is found to have lied about something. A lot of times, adjudication officers don’t pay attention to certain crucial facts during the time of Permanent Residency because of their mistake or lack of experience in adjudicating job, but that doesn’t mean that those mistakes cannot be pointed out/rectified during Citizenship time. I’ve seen thousands of cases, wherein applicants were easily able to secure LPR like a piece of cake, but during the time of citizenship, officers were able to detect something. Then, not only these people's citizenship applications got denied, but also they were deported for lying to US govt. in order to obtain immigration benefit. That’s why, it is very important for an applicant to have an immigration attorney reviewed their whole immigration file before filing citizenship application. Trying to save money, or thinking that they can handle their case by themselves without an attorney, sometimes can put them in a limbo situation.
Also, there is now a very strong possibility that USCIS might be in the process of placing you under Removal proceeding because sometimes it takes some time to start a removal proceeding. I hope this is not the case with you, but you cannot rule out this possibility now, especially when they were able to detect a Fraud, even though you are not ready to accept that your past action was indeed a fraud/lie in your part. I know that you don’t agree that you were involved in any lying or fraud, but your past action is indeed seemed to be a fraud if you carefully pay attention to all this as an impartial person, or you may ask a prominent attorney about all this, who have handled this kind of situations previously. Don't talk with those attorneys who want to tell you what you want to hear out.
Do not forget that you did not leave the US when you found out that you could not be able to attend the school because your brother had lost job in Europe. And, you did not leave the US as well when your application for extension of F-1 visa denied. Instead, you deliberately chose to ignore immigration laws and overstayed here without USCIS permission. But only now, when you are caught/questioned, you are telling that you were a “victim” of "unfortunate situation". Could you enlighten us how you were a “victim”? Nobody told you to disregard/violate immigration laws by staying here illegally if you had no means to go to school at that time. You could have left happily without being a "victim" of "unfortunate" circumstances, and could come back on some other time when you could have means to attend the school, rather than completely disregarding immigration laws and choosing your own discretion on whether to attend school or not at that time. My whole point is- nobody pointed the gun on you to force you to stay here if you had no means to go to school. Then, how can you justify that you did not do anything wrong. I'm not criticizing you, nor I'm blaming you for anything. Instead, I'm telling the logical facts, which make sense. Besides, you know that I don't play diplomacy in giving right information, nor I sugar coat. I believe that I better tell the right information than telling something diplomatic. Further, I’m fully aware of many cases similar to yours, wherein USCIS deported people for lying to them. You will be very lucky if USCIS won’t initiate a Removal Proceeding against you.
About your case, all I can say that you unfortunately got very strict Adjudication officer/Supervisor, even though your interview went so smoothly. Actually, it all depends on individual officer. Some officers are easy-going than others. That’s why many people who lied more terribly than yours got away easily. And, it could also be possible that the reason for your record to have highly scrutinized is because you are from a country of US “watch list”. But one thing I am very sure about that you should not have pressured them so hard about disposing your case. I remember you visiting local district office many times, repeatedly pressuring them thru congresspersons, writing to Director of local district office and indirectly threatening to sue them in the Court under 120 days law. I mean- if you would have laid low and waited for a while, this might not happen. In my personal opinion, you made yourself vulnerable to all these scrutiny, which made your case to have reviewed very carefully. Because of all those pressure, I believe USCIS purposely found this reason in your case to deny your CZ application, or maybe they are in the process of placing you under deportation. Who knows all your pressure pissed them off a big time. You should have known that USCIS could find even a little reason to deny your citizenship application and to place you on Deportation Proceeding, especially when you have such a big issue in your case.
Since you don’t reside in a big city then obviously you don’t have the advantage of choosing good immigration attorney. Because, mostly immigration attorneys make their living in this field by practicing in a big city, where many immigrants live; otherwise they cannot make their living by practicing alone in this field if they practice in a small city/town. Immigration is a federal matter, hence you can hire immigration attorney from anywhere in the country to represent you, but then it might cost you a fortune. Because, then you might need to pay all their travel expenses, and attorney may charge you hourly too. Therefore, it is better for you to do some search to find a good one in your area. Don’t retain just any other attorney. Mostly attorneys are very manipulative. They would tell you what you want to hear. For example-they will try to convince you by saying that you have a better chance in overturning USCIS decision, and that USCIS has no case against you as they are alleging based upon their assumption alone, and etc..etc. Therefore, it is very important that you should talk to at least 3-4 different attorneys before making a final decision. You should not forget that your life is in stake here. Therefore, you should not think about money also as people can always make money so long they would be allowed to live here. And remember: Sometimes money do buy happiness and peace.
Attorney’s fee would depend on many factors, such as- (1) how complex your case is; (2) how much time and efforts need to be spent on your case; (3) how prominent an attorney is, who will handle your case. Because, a reputed attorney who has so many years of experience in his/her belt would normally charge more than other attorneys. (4) If you need to be represented only for a hearing with USCIS then attorney’s fee won’t be that much. But if you would need attorney’s representation in appeal matter in front of Immigration Judge/BIA/Federal Courts then attorney's fee would be very high. Because, then it would be A LOT of work for an attorney.
You need to now start out with filing a Motion for Reconsideration with USCIS first. You have a very limited time to file such Motion. During that hearing, there would be only one or two officers at most who would argue the matter. You (or your attorney) would have the chance to refute anything they will allege. I’m not saying that you don’t have any chance at all to prevail even though it looks very slim, but the truth is-situation doesn't look good in your case given all the facts of your case. However, try to focus primarily on your initial intent when you entered on F-1 than any other irrelevant issues like saying that you have a proof that your brother lost his job (nobody would care whether your brother lost his job or not, and why should anyone care about this anyway as F-1 visa was not issued to you with the condition that if your brother would lost his job then you would not attend the school and would remain in the US), and that you met your wife and married her a year later (nobody is questioning the bona fide of your marriage, so it would be useless to bring up something about your marriage), and that you were a “victim” of "unfortunate situation" (do not even think to say to anyone this; otherwise some people who might be interested in buying your stories, would go against you), and any other tales to justify it. Because, all these tales still don’t prove your initial intent otherwise as alleged, nor those prove that you really had bona fide intent to attend school at that time when you entered on F-1 visa. Rather than being emotional, you should think a logical answer to your situation.