Employers engaging in work visa fraud do not only face administrative penalties but also imprisonment if convicted.
An owner of a tech staffing company in New Jersey faced 6 months prison sentence and $50,000 fine for filing H-1B petitions for ineligible foreign workers and running fake payrolls. Another company owner in Iowa also faced a three year prison sentence for submitting H-1B petitions containing false statements about the beneficiaries’ jobs and work locations.
Various fraudulent schemes have been employed by employers who abuse the H-1B program. However, with the government crackdown on work visa fraud, the number of criminal convictions has also increased.
Last month, the owners of Dibon Solutions, an information technology consulting company, were indicted for multiple counts of conspiracy to commit visa fraud and wire fraud. The company operated like a staffing company which provided third-party companies the services of inexpensive foreign workers with computer expertise on an “as needed” basis.
Under this scheme, Dibon Solutions sponsored foreign workers for H-1B visa stating that the foreign workers will work for their company. In reality, Dibon did not require the services of the foreign workers. Instead, it hired these foreign workers to provide consulting services to third-party companies.
The scheme is lucrative business for both the employer and the third party companies as the employer profits by charging high hourly rates for consultancy services. Third party companies, on the other hand, save money because they do not pay workers when their services are not needed.
This is extremely unfair to the foreign workers who are generally paid only when they are placed at a third-party company. Worse, the workers do not usually get paid unless the third-party company pays their employer.
The nonproductive status of workers due to a decision of the employer is termed as “benching” by the Department of Labor. Employers are required by law to pay the foreign workers even if they are in a nonproductive status. These foreign workers, however, are not paid and are encouraged to find third party companies themselves.
The H-1B process starts with the filing of the Labor Condition Application (LCA) with the Department of Labor. The employer is required to state basic information about the proposed employment such as rate of pay, period of employment and work locations. The employer also makes several attestations. If the LCA contains false information, the LCA would be fraudulent.
Recently, the president of iFuturistics, an Indian national from North Carolina, pleaded guilty to conspiracy to violate U.S. laws by filing fraudulent immigration documents following an investigation. He had received a total of $13.2 million in payment from staffing companies. Records showed that he tried to cover his fraudulent scheme during an inspection visit by moving in furniture and setting up work stations.
Among the charges that may be filed against an employer for committing work visa fraud include conspiracy to violate United State laws, which carries a maximum prison term of five years and a $250,000 fine and presenting fraudulent immigration documents, which carries a maximum prison term of 10 years and $250,000 fine. Available remedies against the employer include restitution to victims of the fraudulent act. Also, properties, real and personal, used in the perpetration of the crime will be forfeited to the government.