On Thursday, the U.S. Attorney's office in Iowa announced a multi-state operation that resulted in the arrest of eleven in a case of suspected H1B visa and mail fraud including Vision Systems Group. The operation was carried out by federal, state and local law enforcement agencies in Iowa, California, Massachusetts, Texas, Pennsylvania, Kentucky, and New Jersey.
Additionally, Vision Systems Group, an IT services firm was indicted on 10 counts, including conspiracy and mail fraud charges. According to Business Week, five other technology companies, including Worldwide Software Services and Sana Systems, remain under investigation for document fraud.
Given the recession and the bleeding taking place among American workers, H1B visas have re-emerged as a hot topic. In fact, U.S. Sen. Charles Grassley (R-IA) Microsoft to prioritize U.S. workers for retention in their ongoing layoff.
As part of the H1B program, the Department of Homeland Security (DHS) and the Department of Labor (DOL) require U.S. employers to meet specific labor conditions to ensure that American workers are not adversely impacted.
According to the press release:
The companies that are the subject of this investigation have asserted that the foreign workers have been brought to the U.S. to fill existing vacancies. However, the companies allegedly have not always had jobs available for these workers, thereby placing them in non-pay status after they arrive in the United States. In some cases, the foreign workers have allegedly been placed in jobs and locations not previously certified by the Department of Labor, displacing qualified American workers and violating prevailing wage laws. The companies and foreign workers have allegedly submitted false statements and documents in support of their visa petitions. The false statements and documents were mailed or wired to state and federal agencies in support of the visa applications. The companies are suspected of visa fraud, mail fraud, wire fraud, money laundering and conspiracy.
Specifically, Vision Services Group is accused of stating the H1B visa workers would be employed in Iowa, and thus paid lower wages, but were placed in locations on the West and East coasts where pay is higher. This undercut the wages of U.S. workers.
Matthew Whitaker, U.S. attorney for the southern district of Iowa, said in a press conference that these tactics used:
"... Iowa as a location to drive down the prevailing wage they can pay their workers and then farm them out to other more high-wage, populated areas. This is not about the workers at this point in time. Our investigation may lead to a review of those workers that came in under these various companies and their programs, but right now we're talking about these companies."
The current cap on H1B visas is 65,000; companies have been lobbying for an expansion of the program, despite the fact that there are thousands of laid-off U.S. workers who could potentially fill job positions.
One has to ask, in a common-sense vein, knowing as I do that there are many laid-off American workers in fields covered by the H1B program, why we even need it right now, short of enabling companies like Vision Systems Group to have access to cheap labor, that is?
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