An ongoing US federal probe into an H-1B visa fraud has led to the arrest of 11 people in seven states and the indictment of IT services firm Vision Systems Group founded by an Indian-American.
Announcing the arrests in Des Moines, Iowa, Thursday, US Attorney Matthew Whitaker alleged that the arrested people had filed false documents to obtain visas for Indian and Pakistani computer engineers and programmers.
US computer companies, he said, set up bogus offices in Iowa as part of a complicated scheme to exploit immigration rules and pay foreign workers less than they would typically earn elsewhere. It allegedly involved a false address in West Des Moines and falsified documents sent to the Iowa Workforce Development.
Vision Systems Group Inc., based in New Jersey with an office in Coon Rapids, was ordered to turn over $7.4 million in alleged profits from the scheme.
Representatives of the company founded by Viswa Mandalapu could not be reached for comment immediately.
The coordinated, nationwide enforcement effort began 18 months ago and continues, officials said. It is the first to specifically address frauds in the H-1B visa system, which critics say brings lower-cost tech workers into the US, displacing American workers.
"This is an enforcement effort that points at a significant vulnerability in our visa process," Whitaker said. He called the case the "tip of the iceberg", in an investigation that includes Iowa and six other states. He declined to elaborate but said more arrests are likely.
Two executives from Pacific West Corp., a California computer firm, set up offices in Urbandale and Clive as part of the scheme, prosecutors allege.
The executives claimed that foreigners were employed in Iowa between October 2004 and December 2008, and sent fake work reports to the Iowa Workforce Development and the Iowa Department of Revenue, the prosecutors say.
Vision Systems Group was charged with mail fraud and conspiracy in addition to being targeted with the "notice of forfeiture" for the alleged profits.
US Sen. Charles Grassley, an Iowa Republican, has said the programme steals American jobs and introduced a bill in 2007 that set limits on the number of visa workers that US companies can use.
Former Microsoft chairman Bill Gates told a congressional panel last year that the US needs the visa programme to maintain its competitive edge in computer technology.