Arrests of H1B Employers Increase
Posted Feb 27, 2009
©MurthyDotCom
Regular MurthyDotCom and MurthyBulletin readers are aware that the U.S. Department of Labor (DOL) and the U.S. Citizenship and Immigration Services (USCIS) have increased scrutiny of H1B employers. A number of articles on this topic can be found on our website, including H1B Benefit Fraud & Compliance Assessment Signals Change (24 Oct 2008). Many employers, particularly IT consulting companies, are having difficulty obtaining H1B approvals. The DOL is engaging in more frequent investigations of H1B practices to assess whether there are violations of H1B labor condition application (LCA) requirements. Enforcement was elevated with a recent series of arrests of company officials and one indictment against an IT company.
©MurthyDotCom
Recent Arrests of Eleven Individuals in Seven States
©MurthyDotCom
Federal agents from U.S. Immigration and Customs Enforcement (ICE) recently arrested 11 people in seven states for allegedly submitting false statements and documents in support of H1B petitions. These arrests occurred in Iowa, California, Massachusetts, Texas, Pennsylvania, Kentucky, and New Jersey.  
©MurthyDotCom
As explained in the ICE news release, the companies involved are sponsors of H1B nonimmigrants. The companies are alleged to have brought the workers to the United States without having positions to fill. They also are alleged to have placed workers in locations for which they did not have LCAs, thus violating prevailing wage restrictions.
©MurthyDotCom
Coordinated Effort of Various Federal Agencies in Arrests
©MurthyDotCom
The investigations were coordinated by a number of U.S. Government agencies, including: ICE, the USCIS's Fraud Detection and National Security Division (FDNS), the DOL's Office of Inspector General, the U.S. Postal Service Inspection Service, the U.S. Department of State (DOS), and the Social Security Administration's Office of the Inspector General. The investigations were supported by the office of the U.S. Attorney for the Southern District of Iowa.
©MurthyDotCom
Fraud, Money Laundering, Conspiracy Charges
©MurthyDotCom
The companies and their workers are alleged to have submitted false statements and documents in support of their petitions. Since these filings are mailed or wired when submitted, the charges levied include visa fraud, mail fraud, wire fraud, money laundering, and conspiracy. These are very serious charges, with sentences ranging from five to twenty years in prison. Each charge also carries a possible $250,000 fine.
©MurthyDotCom
Indictment : $7.4 Million Forfeiture Sought
©MurthyDotCom
The Department of Justice (DOJ) issued a ten-count indictment against IT services company, Vision Systems Group, Inc., of New Jersey, for conspiracy and mail fraud involving H1B visas. The indictment seeks $7.4 million in forfeitures against Vision Systems Group, Inc., while sending a warning that other IT companies are under investigation. The indictment alleges, in summary, that Vision Systems Group, Inc. established a branch office in Iowa and filed false H1B and labor certification cases based upon nonexistent Iowa employment. It further alleges that the company paid employees through the Iowa location and made Iowa-based tax filings, notwithstanding the fact that the employees were not working in Iowa. It alleges that cases were filed with false addresses for the employees, that LCA posting notices were made in improper work locations, and other such violations. A discussion of the arrests and indictment can be found in the February 12, 2009 U.S. Immigration and Customs Enforcement (ICE) news release, available online.
©MurthyDotCom
Conclusion
©MurthyDotCom
These arrests and indictment obviously are very serious, both for the individuals and companies involved, as well as for other companies that may have engaged in similar practices. Companies using the H1B program must recognize that we are in a new era of enforcement and scrutiny. Business practices that may have been overlooked in the past are now leading to DOL investigations and arrests. Employers must review their practices and revise their systems to ensure compliance with the law, including H1B requirements.
©MurthyDotCom
The Murthy Law Firm is working with employers to assist their companies with compliance matters by conducting internal audits of their H1B practices. Employers do not need to be afraid of sponsoring H1B employees, when needed, as long as they are in compliance. The Murthy Law Firm will continue to track changes to the U.S. government's labor and immigration policies and workplace enforcement and will update MurthyDotCom and MurthyBulletin readers to help guide employers and employees in their understanding of the law and regulations with which they must comply.