Dominos Keep Falling in H1-B Visa Fraud Schemes
Federal, state and local authorities are tightening the noose on H1-B fraud schemes in the United States, where the Customs and Immigration Service claims 1 in 5 H1-B visas are obtained under false pretenses. New Jersey and Massachusetts are the most recent focus of H1-B fraud scams.
Two months before federal authorities issued indictments charging two New Jersey IT firms
with using small Iowa towns as mail drops in an H1-B visa fraud scheme,
the hammer had already fallen on a Massachusetts' scam where a state
employee allegedly created bogus H1-B job certifications.
In the scheme, four men were charged Dec. 4 with producing documents falsely stating that H1-B visa applicants had a job with the Commonwealth when, in fact, they did not. Richard Schwartz, a now former Massachusetts' employee, signed the documents and is charged with one count of visa fraud, which brings penalties of up to five years in prison time and a $250,000 fine.
Sridhar Reddy, Sudha Rani and Venkat Naidu are also charged with one count of visa fraud. Reddy and Rani face additional charges of visa fraud totalling up to 15 years of prison.
While the Massachusetts arrests were local in nature, the Feb. 11 raids conducted by the DOJ (Department of Justice) resulted in 11 arrests across seven states. According to the DOJ, the scheme involved hiring college-educated foreign workers to allegedly fill high-tech jobs in Iowa when, in fact, the workers were sent to the East and West coasts while being paid the lower prevailing Iowa wage rate.
The investigation seems to center on Vision Systems Group of South Plainfield, N.J., and Praveen Andapally, identified as president of VenturiSoft, also based in South Plainfield. The other indictments include Vishnu Reddy, who was identified as president of Pacific West of Santa Clara, Calif.
Vision Systems Group faces charges of one count of conspiracy and eight counts of mail fraud and is looking at $7.4 million in forfeitures. Andapally also faces one conspiracy count, six counts of mail fraud, three wire fraud counts and two counts of making a false claim on an immigration matter. Reddy is charged with various conspiracy, mail and wire fraud counts.
Mail and wire fraud carry maximum sentences of 20 years in prison and a $250,000 fine, while false statements to immigration officials can involve up to 10 years of prison time and a $250,000 fine.
U.S. Attorney Matthew Whitaker said at a Feb. 12 press conference that the indictments were "just the tip of the iceberg" when it comes to U.S. visa fraud. "This is an enforcement effort that points to a significant vulnerability in our visa process, and we're trying to close these loopholes and to take away the incentive to conduct these fraudulent schemes," Whitaker said.
The 15 now charged with visa fraud follows an October 2008 USCIS (U.S. Customs and Immigration Service) report found that the H1-B program has more than a 20 percent violation rate. The fraud identified in the report included jobs not located where employers claimed, H1-B visa holders not being paid the prevailing wage, forged documents, fraudulent degrees and "shell businesses." Both Vision Systems Group and VenturiSoft used mail drops in Coon Rapids and Clive, Iowa, as part of their scam.
If those charged in the current cases are pondering their ultimate fate, they might consider the case of Narendra Mandalapa (a.k.a Ramesh Dashrth), who received in early 2007 a 20-month prison term, forfeited more than $5.7 million and two luxury autos and was fined $25,000 after pleading guilty to visa fraud.
Mandalapa was the owner and president of Cybersoftec, a business consulting company based in Edison, N.J., from 2004-2005. Like Vision Systems Group and VenturiSoft, the New Jersey-based Cybersoftec claimed storefront operations in other states, in this case Maine and New Hampshire. Using those two mail drops, Mandalapa obtained more than 150 certifications in the two states for H1-B visas in 2004 and 2005 through the U.S. Department of Labor. Cybersoftec also filed about 50 labor-certification applications for green cards in Maine.
Although Mandalapa faced a maximum of 46 months in prison on 29 counts of immigration fraud, money laundering and mail fraud related to his applications for green cards, his sentence was considerably reduced because of his cooperation with law enforcement authorities. His cooperation included providing federal agencies with a list of companies and individuals participating in visa fraud scams.
Federal authorities refused to comment on any connection between Mandalapa's cooperation and the charges against Vision Systems Group and VenturiSoft almost two years later.