Federal complaint outlines H-1B fraud scheme

Would-be workers shared housing and got little or no pay until clients were found

Federal investigators have ended an H-1B fraud scheme in which people in India and in the U.S. were recruited for full-time jobs that did not necessarily exist.

According to a federal complaint detailing the scheme, job applicants were led to believe they were being hired for $50,000-to-$60,000-per-year development and analyst jobs. But once hired, they either weren't paid consistently or they were "benched" -- left temporarily unemployed.

One employee, a graduate of a U.S. college on a student visa, shared a company-owned apartment with four or five other workers after being promised a job that paid $50,000 a year. Roommates changed when new "batches" of employees arrived, according to the complaint.

The employee, who was able to work under the optional practical training program, wasn't paid during a two-month training period. He volunteered for "in-house" projects that involved client website development, but he was told that he would not receive his full pay until he was placed at a client site. His first H-1B application was denied, but a second one, filed by another company that was also part of the scheme, was approved.

The person charged with running the operation is Srinivas Doppalapudi, 45, a citizen of India with permanent legal residency in the U.S. Doppalapudi pleaded guilty last week in federal court in Wilmington, Del., to charges of visa fraud and money laundering, according to U.S. Attorney Charles M. Oberly in Wilmington.

Doppalapudi, according to the government's complaint, incorporated five computer consulting companies in Delaware and had filed employment-based visa petitions for both H-1B visas and employment-based green cards. One of the companies identified in the complaint is Technosoft, in Newark, Del.

Technosoft filed 335 visa applications, and on 33 occasions fraudulent records were submitted, according to the complaint.

Most of the aliens in whose names Doppalapudi requested H-1B visas were in the U.S. on student visas that were about to expire, the government said

A person who answered the phone at Technosoft declined to answer any questions. "We are only employees of this company," the person said.

Doppalapudi has been in jail since last week's plea deal, he said.

Investigators said Doppalapudi had transferred more than $1 million from his business bank accounts in the United States to India.

Doppalapudi faces a maximum penalty of 10 years in prison and a $250,000 fine. He had been on house arrest with electronic monitoring for 11 months since his arrest. The defendant's attorney argued against incarceration, but the judge granted the government's motion and detained Doppalapudi without bail, pending sentencing in September.

Patrick Thibodeau covers cloud computing 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 email address is pthibodeau@computerworld.com.

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Copyright © 2012 IDG Communications, Inc.

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