Last week one of my informants sent me an article headlined "US: 4 Indian-Americans charged with H-1B fraud".
Since I had written a blog post a few days earlier involving five Indian-Americans in a case of H-1B fraud, my initial assumption was that the headline writer simply had the wrong number of culprits.
It turned out, however, that the five earlier ones were in Virginia, while the four current ones were in California. Two completely separate cases, but with many of the same characteristics:
- Both centered around an Indian-American and his wife;
- Both involved the rent-a-programmer business (aka Indian outsourcing companies);
- Both involved phony, small corporations as the "employers" of the H-1Bs;
- Both involved a totally or almost totally Indian work force;
- Both were at the fringes of the IT sector;
- Both falsified innumerable government applications;
- Both were accused of not paying, as they should, H-1Bs who were benched, i.e., temporarily without an employer; and
- Both apparently, though this is less clear, charged the workers for obtaining the H-1B status, which is totally against the law. (This is standard in these cases.)
You might say that a pattern is emerging, one that should have tipped off the authorities years before they began investigating these cases.
But when thinking about using such patterns in law enforcement, there is an understandable concern that I share about ethnic profiling — think of the white cop in Alabama stopping only African American drivers for traffic infractions.
There is a way around the profiling hesitations, however, which requires only the most basic of computer skills, and what should be open records (at least open to other government officials). Why don't those handling H-1B applications check the names of all the apparently small corporations with the IRS list of those paying the Federal Unemployment Tax Act (FUTA) tax; this would show all companies that have paid at least $7,000 to one or more workers; at the same time, check to see if the corporation has a website and/or a phone number. Further one could check the firm against the list of employers who have, as they should, taken out workers' compensation insurance. (The latter would be a state, as opposed to federal, set of records.)
If a would-be employer of H-1Bs did not show up on any of these checks, or only on one or two of them, then further investigation would be warranted and none of this activity could be called racial profiling.
A Shout-Out to the Big Indian Outsourcing Companies. These criminal H-1B employers are taking away H-1B slots from you, the Cognizants and Tatas of the world! To further fatten your profits, you should do something about it!
Why don't you use a tiny portion of your (frankly ill-gotten) gains from the H-1B program to create software programs along the lines just suggested, for at least the states with large numbers of H-1B workers, and give that software to the feds.
That act (if the software were used) would reduce the competition for H-1B slots in the annual lottery and perhaps produce a bit of good PR for your firm.
I am certain that at least some H-1B fraud would be brought to light in this manner.
A Lesson from the California Case. In the case against the couple in California, Venkat and Sunitha Guntipally, the complaint (in PACER case 5-16-cr-00189-LHK) suggested something that I should have thought about before, as to the size of the phony firms applying for H-1Bs.
The couple deliberately used many small firms, instead of a couple of mid-sized ones, as they fraudulently filed some 100 H-1B applications. If a firm has fewer than 50 workers the fee is $4,000 less than it would be if the firm has both the 50 workers and if more than half of them are H-1Bs. Hence, more non-existent companies were formed — and the more of them there are, the more likely they would show up in the checking process just described.
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