H-1B visas used by firm to create low-cost workforce, U.S. alleges
If there was no work, H-1B visa-holding employees at Texas IT firm were 'benched,' say feds in indictment
Computerworld - A Texas IT services firm has been indicted by federal authorities for using H-1B visa workers to create an inexpensive "as needed" labor force.
A multi-count indictment filed last month charged that Dibon Solutions of Carrollton, Texas only paid Visa-holding employees when there was work.
The full scheme is outlined step-by-step in papers filed in the U.S. District Court for the Northern District of Texas, Dallas Division.
The indictment says that Dibon recruited foreign workers and sponsored them for H-1B visas to work at the firm's headquarters, but required them to provide consulting services to third-party companies located elsewhere.
The company only paid the H-1B workers when they were placed at a third party company, "and only if the third party company actually paid Dibon first for the workers' services," it said.
This scheme, the indictment alleges, "provided the conspirators with a labor pool of inexpensive, skilled foreign workers who could be used on an 'as needed' basis."
This operation "was profitable because it required minimal overhead and Dibon could charge significant hourly rates for a computer consultant's services," according to the indictment.
The IT firm "earned a substantial profit margin when a consultant was assigned to a project and incurred few costs when a worker was without billable work," the government wrote.
The scheme of only paying H-1B visas holder when work is available is called "benching," and has been cited in other, unrelated legal actions as well as in complaints filed by visa holding workers.
When H-1B employees are assigned to work at different locations, regulations require the petitioning company to inform the government.
As general rule, H-1B workers are supposed to be paid prevailing wages based on location. For instance, higher rates typically paid in places like New Jersey and California and lower rates in states such as Iowa.
Moreover, the H-1B rules don't allow employers for forego pay when there is no work.
The company is described as family owned. Named in the grand jury indictment Are Atul Nanda, Jiten 'Jay' Nanda, Siva Sugavanam, Vivek Sharma, Rohit Mehra, and Mohammad Khan. Efforts to reach the company were unsuccessful by press time.
The multi-count indictment also includes wire fraud for using email to execute the scheme.
In 2011, the U.S. brought a visa fraud case against New Jersey IT services firm Vision Systems Group that resulted in fines and probation.
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 firstname.lastname@example.org.
- Obama's options for tech immigration take shape
- Obama's options for tech immigration take shape
- U.S. Senator blasts Microsoft's H-1B push as it lays off 18,000 workers
- Court case offers a peek at how H-1B-fueled discrimination works
- Obama has big options for green card, H-1B reform without Congress
- An H-1B whistleblower tries again for justice
- If immigration reform is dead, so is raising the H-1B cap
- Many comments on new H-1B rule, but few are 'unique'
- Readers rant about IT worker who trained H1-B replacement
- Cantor, a reliable 'yes' vote for raising the H-1B visa cap, is unseated
Read more about Legal in Computerworld's Legal Topic Center.
- API Playbook: Drive API Adoption Through Developer Engagement Learn the best practices of how to engage developers, whether your goal is to attract external developers to your public APIs or improve...
- Leverage the Power of APIs to Turbocharge Your Mobile Strategy: 7 Steps to a Successful API Program In this guide, Intel® Services-which offers industry-leading API management solutions for over 150 top enterprises, including Best Buy, Netflix, Expedia, ESPN, and The...
- Troubleshooting Common Issues in VoIP Learn more about Voice over Internet Protocol (VoIP), including common VoIP metrics used, best practices in VoIP management and tips and tricks for...
- IDG Research Survey: Are you Paying Too Much for Your NMS? Feel like you're paying too much for network monitoring? You're not alone. This survey brief summarizes findings from research recently fielded by IDG...
- API Management: The Key to Improving the Consumer Travel Experience Join PhoCusWright's Senior Technology Analyst, Norm Rose, as he shares his insights on how travel suppliers and intermediaries can improve industry data flow...
- Tips to Simplify Database Administration and Development Make your job easier while getting the most from the leading productivity tool for database professionals. Learn tips from Dell Software's Oracle® ACE,... All Legal White Papers | Webcasts