On March 22, 2013, U.S. Immigration and Customs Enforcement (ICE) reported that an Indian national owner of an IT company pled guilty to five federal charges for his participation in a fraudulent scheme to obtain false H-1B visas for foreign workers.
The company in question was run like an IT staffing agency - a third party would contact this company if it needed an IT professional and would pay the company for providing the IT professional. The professional would not be paid unless the company was paid.
The charges leveled against the Indian national are quite serious and seem complex but resulted from seemingly minor actions by the IT consulting company. Some of the serious acts of the company that led to the Indian national owner being charged include:
- Placing H-1B employees at work locations other than those specified in the LCA’s and H-1B petitions
- Failing to pay H-1B employees the proffered wage listed on the H-1B petitions and/or LCA’s
- Unlawfully ‘benching’ (placing employees in a non productive status) H1B employees, with little to no pay, if the company could not find qualifying employment for such workers
The above actions, along with others, lead to the Indian national owner being charged on 5 counts:
- Count 1: Conspiracy to violate United States laws (carries a maximum prison term of 5 years and a $250,000 fine);
- Count 2: Presenting fraudulent immigration documents- specifically a Labor Conditions Application(carries a maximum prison term of 10 years and a $250,000 fine);
- Count 3: Hiring at least 10 individuals within a one year period with actual knowledge that those individuals were foreign nationals who were unauthorized to be so employed and were brought into the U.S. in violation of law (carries a maximum prison term of 5 years and a $250,000 fine);
- Count 4: Hiring and referring for a fee for employment in the U.S. a foreign national knowing that the person was unauthorized with respect to such employment (carries a maximum prison term of 6 months and a $100,000 fine); and
- Count 5: Money laundering conspiracy (greater than $10,000) (carries a maximum term of 20 years in prison and a fine not to exceed the value of the funds involved).
It is important to note that:
- where the company entered into staffing contracts for third party placements to hire out individuals who were in the U.S. based on fraudulently obtained H-1B visas, any money then gained by the company was considered to be “criminal proceeds.”
- The Department of Labor’s Wage and Hour Division also ordered the company to pay back wages of about $150,000 to 7 employees, and about $18,000 in civil penalties.
H1B Compliance: Evaluating Your Exposure
The above case is not an isolated instance of an H1B employer being penalized for ‘staffing’ activities. As immigration becomes increasingly wary of IT staffing companies and staffing arrangements, it is critical for companies to have a clear understanding of what they may or may not do and what they must do under the H-1B program, including in situations where they are sending employees to work at third-party sites, or when they ‘run out of work’ for an H1B worker.
Submissions made in the LCA and H-1B petition are treated as ‘representations’ to the US government, and any deviation from them could lead to serious charges like presenting fraudulent documents or conspiracy to violate US laws (if the crime is committed by several individuals), each carrying serious prison terms and/or civil penalties, as seen in the above case.
Hence, it is extremely essential for H1B employers to periodically evaluate their exposure to claims of H-1B violations, such as failure to pay H1B prevailing wage, and carry out necessary adjustments to stay in compliance under the program and avoid criminal or civil consequences.
How VisaPro Can Protect Your Company’s Interest?
To help your company remain in compliance with all relevant immigration and related labor laws, experienced VisaPro immigration attorneys can assist in multiple ways, including:
- Perform an audit of company files and procedures NOW and help correct any violations.
- Run periodic audits to help avoid penalties.
- Develop a comprehensive immigration policy with a list of “best practices” to remain in compliance.
- Educate you regarding the entire immigration process, from hiring foreign nationals to dealing with the different government entities, to ensure that all relevant immigration and labor laws are complied with.
Consult an experienced VisaPro attorney today to discuss immigration needs and issues specific to your company.