Feds Bust Nationwide H-1B Visa Scam

Federal authorities have busted an alleged nationwide H-1B scam ring, arresting 11 people in seven states and bringing a 10-count indictment against a New Jersey IT services company. The indictment charges Vision Systems Group with one count of conspiracy and eight counts of mail fraud and seeks $7.4 million in forfeitures.

The individual arrests were carried out Feb. 11 by federal, state and local law enforcement agencies in Iowa, California, Massachusetts, Texas, Pennsylvania, Kentucky and New Jersey.

According to Matthew G. Whitaker, U.S. attorney for the Southern District of Iowa, the federal investigation involves companies that sponsor primarily H-1B nonimmigrants. Vision Systems and five other companies under investigation have said their H-1B workers have been brought to the United States to fill existing IT vacancies. Whitaker claims the companies have not always had jobs available for these workers, placing them in nonpay status after they arrive in the United States.

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In some cases, according to the charges, the H-1B workers have been placed in jobs and locations not previously certified by the Department of Labor, replacing qualified American workers and violating prevailing wage laws. The companies and foreign workers have allegedly submitted false statements and documents in support of their visa petitions.  

Since the allegedly false statements and documents were mailed or wired to state and federal agencies in support of the H-1B applications, the companies are suspected of visa fraud, mail fraud, wire fraud, money laundering and conspiracy. In addition to Vision Systems, which maintains a branch office in Coon Rapids, Iowa, Whitaker said Worldwide Software Services and Sana Systems in Clinton, Iowa, are under investigation for document fraud. 

"This is a prime example of how the Department of Homeland Security identifies fraud," USCIS (U.S. Bureau of Citizenship and Immigration Services) Acting Deputy Director Michael Aytes said in a statement. "Our adjudication officers can spot inconsistencies during the application process that ultimately lead to the successful outcome we're seeing today. Visa fraud undermines the integrity of the immigration system."

A favorite of American technology companies, the H-1B program is a temporary work visa program allowing American companies and universities to employ foreign guest workers who have the equivalent of a U.S. bachelor's degree in a job category that is considered by the USCIS to be a "specialty occupation." The idea is to help companies hire foreign workers on a temporary basis when there is not a sufficient qualified American work force to meet those needs. H-1B visa winners can work in the United States for three years, with an option for an additional three years.

The Silicon Valley has repeatedly urged Congress to raise the H-1B cap, which is currently set at 65,000 visas per fiscal year, but lawmakers have resisted, citing concerns over fraud in the H-1B program.

In October 2008, a USCIS report found that the H-1B program has more than a 20 percent violation rate. The fraud identified in the report included jobs not located where employers claimed, H-1B visa holders not being paid the prevailing wage, forged documents, fraudulent degrees and "shell businesses."  

Even before the report was issued, Senators Charles Grassley of Iowa, Dick Durbin of Illinois and Bernie Sanders of Vermont were seeking reform of the H-1B visa program. A bill introduced in the 110th Congress by Grassley and Durbin would require employers to make a good-faith effort to hire American workers first. Employers would also have to show that the H-1B worker would not displace an American worker.

The bill, likely to be reintroduced in the new Congress, would require employers to advertise job openings on a Department of Labor Web site before submitting an H-1B application. In addition, the bill would give the Department of Labor a mandate to conduct random audits of any company that uses the H-1B program and would require annual audits of companies with more than 100 employees that have 15 percent or more of those workers on H-1B visas.

"This is about protecting the American worker," Grassley said in a statement accompanying the bill. "We're closing loopholes that employers have exploited by requiring them to be more transparent about their hiring, and we're ensuring more oversight of these visa programs to reduce fraud and abuse. A little sunshine will go a long way to help the American worker."