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Computerworld - A federal H-1B fraud case against a New Jersey IT services firm has ended after two brothers that ran the company pleaded guilty to a felony charge.

Viswa Mandalapu, 43, president of Vision Systems Group, Inc., and Chandra Mandalapu, 40, an officer of the firm, were sentence to three years of probation. Each also paid a $100 special assessment after pleading guilty late last month to one count of unlawfully hiring aliens, the U.S. said in a statement on Friday.

The statement was released after a Computerworld query about the case.

The company paid restitution of $236,250 to the United Citizenship and Immigration Service (USCIS) as part of this agreement.

The government's initial case against the company was much broader. It included a multi-count indictment and claims for $7.4 million in forfeited assets.

A plea agreement was reached in December, and finalized in late April.

The government's case ran into trouble over the conduct of its search of Vision Systems' electronic records. The government took about 100 boxes of evidence, including records stored electronically, from Vision.

The defense challenged the searches, and the court ruled that the government had conducted "overly-inclusive" electronic searches. Instead of searching for specific keywords, the government searched for "all email files" and all documents.

Mark Weinhardt, a Des Moines, Iowa, attorney who represented the defendants, said Vision Systems "is not in business in its previous form and the assets have been sold."

As part of the agreement with the government, the two brothers agreed to be "permanently debarred" from further participation from U.S. Labor Department certifications, which are needed for the H-1B program.

The brothers "are happy to have this matter behind them," said Weinhardt. "They have moved on to other business interests, and they and their families look forward to continuing productive lives in the United States."

The government had alleged, in part, that Vision, with an office in Iowa, had paid workers based on Iowa's relatively low prevailing wage rate, and not the higher prevailing wages in states where they were employed. That charge was disputed in court by the company.

Under the agreement, Vision Systems Group, pleaded guilty to one count of mail fraud and unlawfully hiring aliens.

The mail fraud charge was related to information supplied by the company to USCIS, and the unlawful hiring charge was made in connection with the company's hiring of foreign workers that someone else had brought to the United States without properly obtaining H-1B visas, according to the government and the client's attorney.

Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is pthibodeau@computerworld.com.

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