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United States Businesses The Courts IT Politics

Federal Prosecutors Actually Prosecute H1-B Fraud (ap.org) 111

Slashdot reader McGruber reports that federal prosecutors "have filed conspiracy charges against a part-owner of two information technology firms and an employee for fraudulently using the H-1B program". Both were reportedly recruiting foreign IT workers, according to the AP: Prosecutors said the conspirators falsely represented that the foreign workers had full-time positions and were paid an annual salary [when] the workers were only paid when placed at a third-party client, and the defendants sometimes generated false payroll records... The defendants are charged with conspiracy to commit visa fraud and obstruct justice and conspiracy to harbor aliens.
They're now facing up to 15 years in prison for an "alien-harboring conspiracy" charge -- with a maximum penalty of up to 10 years in prison and a $250,000 fine -- and a separate visa fraud and obstruction of justice charge with a maximum 5-year penalty and a $250,000 fine.
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Federal Prosecutors Actually Prosecute H1-B Fraud

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  • by sethstorm ( 512897 ) on Saturday October 01, 2016 @04:42PM (#52995297) Homepage

    It's not news to hear them take down trivial targets, let's hear it when they actually take down bigger fish - the kind that result in citizens (especially long-term unemployed) being hired in their place.

    • Not a chance, big fish have too many campaign contributions.

      • So the hatred for citizens continues.

      • by Alomex ( 148003 ) on Saturday October 01, 2016 @04:59PM (#52995395) Homepage

        Which is exactly why Trump proposes a useless wall that anyone with a ladder can get climb over.

        If the real goal was to stem illegal immigration simply having and enforcing high penalties on employers of illegal workers would take care of the problem.

        The whole idea of the wall is to convince simpletons and the uneducated that you will do something, when you really don't intend to.

        Same with the H1B visa program. On paper it is actually a very good thing: it allows you to bring workers from abroad in cases of local shortages. However, in practice it is being used to bring Indian IT workers which are trained by the US IT workers they are replacing. We do not need to change the H1B program, we need to make sure it is used the way the law says it should. Why it doesn't? just like the parent post side, employers make the proper campaign contributions to make sure it doesn't happen.

        • I challenge you to cross the border in 2020 with a ladder.... Be careful when you are on the other side... These H1-Bs should simply walk across the current border... its easier than attempting to commit fraud. Or they cold simply set up shop next to the FORD plant and offer these same services in the Mexican Cloud.
          • by Alomex ( 148003 )

            Not a problem. The border is thousands of miles long, so crossing it without being noticed is a piece of cake.

            For example, Israel has two big walls, one relatively small and heavily guarded with the West Bank, another with the Gaza strip and not heavily guarded. This last one is riddled with tunnels and serves no good effect.

            Once you heavily guard the border the wall itself is actually not necessary. So as I said, the whole wall proposal is meant to capture simpletons who cannot think this through. A much c

          • Dude, there are literally thousands of pictures of people crossing the current wall in every way you can imagine.

            Ladders, Cool ropes that unwind you to the bottom, Tunnels that you can literally ride a full size truck thru, gaping holes that appear over night in solid steel sections of the fence, bridges that unfold over the wall, and of course people simply boosting others up who then pull them up. It takes them under 60 seconds to cross the wall.

            Any wall will not work unless you have officers every 300 f

        • I'd personally prefer a village. A 2000 mile long, three city block wide, village.

          That way, you could have newcomers to the country welcomed with a place to stay within three blocks of the border. Include a 2000 mile long sewer and water system, and have the back yards of the interior row of houses be farms to feed everybody.

          Problem solved for the rest of the nation, and such a village/city could probably absorb all of the immigration possible from all of Latin America.

    • by lgw ( 121541 ) on Saturday October 01, 2016 @05:40PM (#52995579) Journal

      It's not news to hear them take down trivial targets, let's hear it when they actually take down bigger fish

      Taking down easy targets is what the beginning of taking down hard targets looks like. Enforcing H1-B laws at all is rare enough that even the small fry are newsworthy. Lets hope there's some actual follow-through.

      The H1-B laws as written are pretty good: you have to pay at least average, and you must have at least tried to hire a US citizen. We all know companies that cheat on this, but I've worked for plenty that don't cheat. It's easy to know the cheaters, because all, or nearly all, low-level employees are H1-Bs.

      Companies just trying to fill reqs with qualified people will have a real mix of citizens, green cards, and various visas. That's what it looks like when you're desperate to hire, and you'll find a way to hire anyone who gets through your interviews: a diverse mess of immigration statuses. And, importantly, they're all employees, not any outsourcing going on.

      OTOH, if you're a body-shop outsourcing company that just competes on price, it's almost all H1-Bs (except some management), no one on green card track, everyone underpaid, so damn easy to see what's happening there. If only the federal government gave a fuck.

      • by Anonymous Coward

        If only the federal government gave a fuck.

        It's amazing what a few hand-written letters to your congressman from a constituent in their district, especially one who works in the technology business, can do. You should try it sometime. All the lobbying money in the world cannot match the authenticity of a genuine hand written letter from a constituent and doubly so if there is a story about a layoff or other hardships to go with it.

        • by Anonymous Coward

          All the lobbying money in the world cannot match the authenticity of a genuine hand written letter from a constituent and doubly so if there is a story about a layoff or other hardships to go with it.

          Triply so when you enclose photographs of the congressman cruising for gay sex in the men's room at the Indian restaurant.

        • by Uberbah ( 647458 )

          It's amazing what a few hand-written letters to your congressman from a constituent in their district, especially one who works in the technology business, can do.

          Only if they have checks to the sum of four or five figures attached to the letter.

      • When they were written 15 years ago. not today. the salary hasn't been adjusted for inflation.
        Adjusted for inflation, it would be over $100,000. It is still about $60,000.

        And that's a root issue.(not the only one). At my last company, we paid Infosys people 2/3 of what we paid u.s. citizens onshore (and offshore it was 1/3 the rate but they needed onshore resources to function-- bad english skills).

        • $60,000 in 2001 is $80,000 in 2016 when adjusted for inflation, so where are you getting $100,000 from?

          • ...probably from real prices, instead of the phoney govt statistics
          • You are right... it's since 1990. So 26 years.

            The H1b Minimum salary was set at $60,000 in 1990. That's $110,000 today adjusted for inflation.

            And that's probably why bills submitted to congress to set a new minimum are written with $110,000.

            Good point.

            I think instead of being $110,000, it should be top 10% income. That would adjust automatically.

        • by lgw ( 121541 )

          The law doesn't specify an amount, it specifies that you pay at least average. Infosys is one of the cheaters, perhaps the most famous. They just ignore the law, have from the start, and will keep ignoring it unless the government actually bothers with enforcement. Thus far there have been enough campaign contributions to keep that from happening.

      • by Uberbah ( 647458 )

        The H1-B laws as written are pretty good: you have to pay at least average, and you must have at least tried to hire a US citizen.

        Nah, they were a travesty from the start - increase the size of the labor pool to benefit corporations, with the intended side effect of forcing down wages for the worker. Supply and demand for thee, not for me. The invisible pimp hand of capitalism, bitch-slapping the unskilled worker with its hand - and then the skilled worker with the backhand.

    • it puts the less egregious violators on notice. It's not unusual for the fuzz to drop the hammer on the worst offenders first and give the rest time to clean up their act, especially when they've been getting away with it for a long, long time. Word gets around ya know.
    • by Anonymous Coward

      It's not news to hear them take down trivial targets, let's hear it when they actually take down bigger fish - the kind that result in citizens (especially long-term unemployed) being hired in their place.

      Does it make sense to practice first before suiting up for the big game? Why do patent lawyers go after the small fish first? Think about it. If you're an attorney or a prosecutor do you go after the targets with the best defenses first? What if, instead of starting with the strongest opponent, you practiced on the smaller ones first? That way you can refine your arguments, see what works and what doesn't and (hopefully) get a few wins under your belt before you challenge the heavyweight champion for the ti

  • by Anonymous Coward

    The defense will counter-offer with: 'plead guilty to 1 count of conspiracy, no jail-time, and $10,000.'
    I'll delay opinion if/when the conviction details materialize: EditorDavid, please report back when that happens.

    • by Anonymous Coward

      That offer has probably already been accepted. Hell my company ripped off medicaid and Medicare for tens of millions and all they got was a small fine, don't do that again, and no admission of guilt.

  • by ErichTheRed ( 39327 ) on Saturday October 01, 2016 @04:56PM (#52995381)

    The problem with this whole program is that they can't go after companies that violate the spirit of the law. In this case, the government was clearly responding to an actual fraud (falsification of records, etc.)

    I don't really have a problem with the H-1B program, in its original form. Before all the loopholes were discovered, it provided a useful way to get very highly skilled people into the US to work on projects. The thing I don't like seeing is the whole wave of body shops that are clearly using the law to bring people in house who are clearly not highly skilled, but work cheap enough to displace a native employee. I'm a reasonably senior systems integration engineer, and it's clear that the Tatas and Infosys's of the world aren't bringing in Ph. D. geniuses to work as routine DBAs and coders. My team and I get a lot of the output of these folks and have to make it work in the real world...it isn't ground breaking innovative stuff. The other thing that I've seen the offshore firms use H-1Bs for is a rotating "train your replacement" team. When they hook another company for an IT outsourcing deal, this is the team that gets sent in to collect procedures and send the work offshore. When the press picks up on stories like this, these teams are usually the ones the workers are talking about when they say they're being shadowed and forced to document their jobs.

    I really think it's going to take massive unemployment in sectors other than IT for the loopholes to be closed. When the BPO firms start coming for the professional accountants and other "expensive" talent as well as IT, people might notice and/or sympathize. I think lots of people really think that IT folks are way overpaid and don't totally understand the job, cost of living differences, etc. It also doesn't help that there are a lot of people inside and outside of IT that express the opinion that all of the displaced workers were "old fossils" who don't keep up. I'm old and spend a ton of time keeping up, so I hate getting lumped in with this crowd....but at least I'm still employed!

    • by Anonymous Coward

      I work a major ITO/BPO firm. Hp services sized entity. we outsource even our own jobs. It's not just IT. We shipped all of accounting to India. HR is moving too. All call centers are long gone. There are almost no US workers left in our company except upper management. I'm with the small group who still has to have boots on the ground here... But now we are doing this landed resource shit where you lay off the US workers and replace them with imported h1b visa labor.

    • This is already starting. McDonald's is the latest to let go of 70 Accountants and there are more companies in the past (New York Life/ToysRUs I believe). This is an epidemic that needs to be eliminated in this country.
  • by Anonymous Coward

    Outright fraud is easy. But the real problem with H1B isn't what is illegal, it is all the parts that are legal.

    No more using H1B to bring in people for training as the first step in off-shoring work.
    No more letting them bait-and-switch labor condition applications [cringely.com] in order to circumvent the prevailing wage requirement.
    No more using the 5+ year green card process to prevent H1B holders from switching to better paying jobs.

    But the DoJ can't fix those problems because those are all baked into the current H1B

    • Simply dropping the per-country quotas for Green Cards would solve the latter 2 issues overnight. There's a lot of people I know who are here on those visas (with their families) who would become citizens in a heartbeat, but they have a 20 year wait. At this rate their (US born) children will be sponsoring them before the simple "I live and work here" method works its way through...

  • by bfmorgan ( 839462 ) on Saturday October 01, 2016 @05:15PM (#52995467)
    An the pour worker gets $40/hour. This is a story I see more and more often. An authorize contracting company will supply us a candidate. We hire the candidate at the agreed upon rate of $100/hour. We find out later after he is on board that he has a second contracting company who is his prime contracting agency. This prime agency is not an authorize company to deal with my company. The resulting pay per hour after the authorized contracting company takes their 30-40% and the prime contracting company takes their 30-40% is that pour worker gets $40-$50 per hour. It gets worse, after the period of time that the worker has performed well and we wanted to hire them and transfer the H1-B to my company, the prime contracting company says that if he does this they will report to the government that he didn't actually work in the US. We found out later that they were paying them in Rupee in India. Loopholes are for the dishonest and greedy.
    • by Anonymous Coward

      This happens domestically too. Someone we employed as a contractor from our "preferred vendor" at Rate X was subbing the work out to TEKSystems (land of the naive and the newbie contractors.) I accidentally saw what TEKSystems was paying him...Rate X became Rate 0.3X after both companies took their cut. When his contract was up, we weren't able to hire him, but I was sure to mention to him that he should find another contracting company...he was really good and didn't realize he was being taken advantage of

      • I only subcontracted via Tek. It was a short contract for what I was hoping would work into a permanent position. I told them as much, and they still tried to stick me with a "cannot take a permanent position unless authorised by Tek" (aka pay them money). I fought with them until eventually that clause was removed.

        At the end of my term, I get offered the full position only to find out that they've put in a similar clause to the employer, who then had to pay Tek a fee to take me on. This was after I'd burne

    • they will report to the government that he didn't actually work in the US. We found out later that they were paying them in Rupee in India. Loopholes are for the dishonest and greedy.

      I am struggling to see the illegality here, apart from the rate at which the worker was being paid. The fact that he was paid in Rupees? So what? As long as the relevant taxes are paid, there is no issue. In fact, it appears that the illegality was committed by the contracting agency and they have more to fear from it being r

      • by Qzukk ( 229616 )

        The fact that he was paid in Rupees? So what? As long as the relevant taxes are paid

        As long as the relevant taxes were paid, then the employee would be able to prove that they were employed in the US.

        I'm guessing the IRS didn't get a single Rupee from this employee, nor the employer's contribution in payroll taxes.

        • I'm guessing the IRS didn't get a single Rupee from this employee, nor the employer's contribution in payroll taxes.

          I would guess that someone at GGP's company knowingly set up a shady (and possibly illegal) deal to employ cheap labor. Lower down the hierarchy, they don't realize the illegality. The illegality is why they can't actually hire any of these "good" H1-B holders, but it's not because the illegality is limited to the H1-B holder or the contracting companies.

    • How is this cheaper? Can someone explain that? Are benefit payments really that large in US industry.

      If benefit payments are that large, why aren't US corporations openly for single payer healthcare?

      Corporate-think is destroying the US INHO.

      • Are benefit payments really that large in US industry.

        H1-B workers are entitled to the same benefits as any other employee, so this is not an issue.

        If benefit payments are that large, why aren't US corporations openly for single payer healthcare?

        Managing corporate healthcare programs is much easier for big companies than for small companies, so big companies see it as a competitive advantage. Small companies don't come out for single-payer because they are generally not politically engaged at all.

        Single-payer healthcare would likely be a big win for American businesses if it was managed well, but that is unlikely. Medicare and Medicaid are very badly man

    • What sort of elitist fantasyland do you live in, that $40/hr is pour [sic] pay?
  • They are going after small fries. Meanwhile, most H1b visas are used by companies like Infosys or Tata Consulting who bring people from India, have them work as H1b low-paid slaves to get the training required so that their jobs can be outsourced to India where they return to and continue with much lower wages...

  • I noticed that the /. title - and description does not show the names of the companies. Both linked articles do not reveal the names until the second paragraph.
    The Slashdot title should be more like "SCM Data and MMC Systems prosecuted for H-1B VISA Fraud".
  • by Anonymous Coward

    One possible side benefit of all the crappy code written by H1B body shops is the rich market for bugs and exploits of all kinds. With every government in the world stockpiling cyber weapons and gearing up for cyber warfare, there should be plenty of opportunities in the future for selling of exploits to the highest bidders. Let the games begin.

  • Let us know when they go after Disney. Nobody gives a shit about these small potatoes.

  • Did anyone catch the name of the prosecutor who filed the charges? I'd like to nominate him or her for president if it's not too late.

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