Author:  Harry J. Joe.

Job shops and staffing firms use of H-1B visas, but that do not actually and directly employ the alien workers, that assign such workers to third-party worksites and otherwise bench (practice of placing H-1B visa holders in nonproductive status, without pay, while they wait for placement with other employers), and not pay such workers when work is not available can be open to government prosecution. The H-1B visa system was intended for the H-1B worker to perform services for the petitioning company. When employers fail to disclose in their visa petitions and labor condition applications for H-1B alien workers that the workers would be placed at third-party worksites, would be benched, would be paid only for work performed at such sites, would not be employed directly by the petitioning employer and at an employer’s place of business, and that they would not be paid a salary as represented in the filings, they can be criminally prosecuted for visa fraud, wire fraud, harboring, employment of unauthorized workers and money laundering. Both employers and their principals can be open to accusations of criminally misuse of the H-1B visa program.
 
A criminal indictment was filed on February 20, 2013, in the U.S. District Court for the Northern District of Texas against six principals of Dibon Solutions of Carrollton, Texas. It alleged Dibon, along with its six principals, engaged in an unlawful conspiracy to commit visa fraud by sponsoring foreign workers for H-1B visas with the stated purpose of working at Dibon Solutions’ headquarters in Carrollton. In fact, the workers provided services to third-party companies located elsewhere. Moreover, contrary to statements in the petitions and applications, Dibon only paid the workers an hourly wage for work performed at the third-party worksites and only if such third-parties first paid Dibon for the work. When not working, the workers were “benched” and not paid as required by H-1B labor condition application regulations.

The government’s theory of criminal liability was that the H-1B visa system was intended for the worker to perform services for the petitioning company, i.e., Dibon Solutions. Not informing or disclosing in its filings that the workers would be employed at or assigned to a location other than the Carrollton address is contrary to the stated requirements in the petition and the application.
 
The Dibon indictment further alleged the named defendants had unlawfully engaged in wire fraud. The government also is seeking forfeiture of assets procured by the defendants that arose from their criminal enterprise.
 
In its latest criminal prosecution, the government alleged on March 19, 2013, in the U.S. District Court for the Western District of North Carolina that Phani Raja Bhima Raju, founder and principal owner of iFuturistics, recruited and hired foreign nationals with specialized skills in computers and information technology so they could work at other U.S. companies
 
Raju and others were accused of knowingly and willfully conspiring to conceal in iFuturistics’ H-1B petition and labor condition application filings that the workers would be employed at other locations, the actual terms of their employment as to wages and hours of work, and that the workers would be benched. Raju and others also were accused of unlawfully misrepresenting the place of employment as Pineville, North Carolina, and falsely stating that the workers would be employed full-time and paid the stated salary. In fact, the workers were benched and not paid until assigned to a third-party worksite.

According to the allegations against Raju, a bona fide H-1B petitioning employer is a “valid employer,” not a “job agent,” “subcontractor,” or “hiring agent” and the valid employer could not engage in “benching.”

On March 22, 2013, Raju pleaded guilty to five federal charges, ranging from conspiracy to file fraudulent immigration documents to money laundering in a fraudulent scheme to obtain H-1B visas for foreign workers.

Moreover, iFuturistics was ordered by the USDOL Wage and Hour Division on January 4, 2013, to pay back wages to seven H-1B workers in the amount of $149,009.51 and civil monetary penalties of $18,000.