Largest H-1B fraud case ever in the US

The U.S. government filed a new, expanded indictment last week against a New Jersey IT services firm that it alleges fraudulently used H-1B visas through a scheme that delivered it millions of dollars in profits.

If federal prosecutors win their case against Visions System Group Inc., in South Plainfield, NJ- part of apparent government H-1B enforcement push- they will ask the court to approve $4.9 million in forfeited assets, which is an amount "representing the total amount of gross proceeds obtained as a result of offenses," the government said.

But that amount is also a reduction from the $7.4 million the U.S. sought from Visions Systems in its initial indictment, filed earlier this year.
The reduction was not explained in court documents.

Visions Systems and its executives named in the indictment are fighting the allegations in U.S. District Court in Iowa. The government alleges H-1B workers were paid based on Iowa's lower prevailing wage rates through the creation of shell firms in that state, and not the prevailing wage rates of the higher paying locations where they worked.

An attorney representing Vision Systems disputes the government's charge. "Workers were paid at or above the prevailing wage rates of the places that they were working," said Mark Weinhardt, a Des Moines, Iowa attorney who is part of a team representing the defendants.

Visions System's defense has not yet been outlined but is hinted at in the U.S. filing. The government says Vision Systems told its H-1B hires that it could get a green card faster outside of New Jersey, based on regional office processing differences in effect. In other words, Vision Systems may have been using the Iowa offices as a recruiting tool for H-1B workers interested in a green card.

"Vision Systems Group's business was to bring highly trained computer specialists to the United States to serve a need that was unmet or underserved by our native population. We don't think bringing people from abroad to meet that need is or should be a crime," Weinhardt said.

Weinhardt said his team believes the "indictment is based on a number of misconceptions about immigration law and procedure."

Despite the reduction to $4.9 million sought, this case is likely to remain the largest H-1B fraud case ever brought by the government. The U.S. believes methods used by Visions Systems and by similar companies "have substantially deprived U.S. citizens of employment."

Among the other issues that Visions Systems will have to address in its defense are government allegations that H-1B visas holders were "benched," or not paid. These workers were allowed to live in a guest house with other benched workers.

In February, the U.S. arrested nearly a dozen people in on H-1B fraud related charges but appeared to direct most of its attention against Vision Systems, which was originally charged with a 10-count indictment that has since grown to 18 counts.

Released late last year, the U.S. Citizenship and Immigration Service study estimated that as many as one-in-five H-1B visa applications had something wrong with them, including fraud.

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