
Judge sends two to prison for 7 years for H-1B fraud - us0r
http://www.computerworld.com/article/3079224/it-careers/judge-sends-two-to-prison-for-7-years-for-h-1b-fraud.html
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qxf2
I rarely comment but this story makes me happy enough to do so. I'm a former
H1-B with an American Masters degree in STEM. I think this conviction will go
a long way in making the system fairer.

Here is what happened. H1-Bs must be legally employed all (well most of) the
time they are in the USA. To get past that rule, these H1-B shops act as
employers and then farm out the employees to other companies. Employers need
to pay H1-Bs at least the prevailing wage that is mentioned in their H1-B
application. This employer did not. Instead, they reduced wages when the
employees were on the bench. That is the violation that they have been
convicted for. So this conviction is not that much about H1-B's replacing
American workers as much as it is about an unethical employer paying his
employees less than the promised wage.

Usually, people who join this kind of shop are people who have not been able
to land a direct employer on their own and desperately want to stay in the
USA. This judgment will go a long way in correcting the system because now all
shops (and there are many!) that run this scam will close down. That, in turn,
will decrease the number of people who end up applying for H1-Bs without a
real employer. Hopefully, that will improve the perception around genuine H1-B
VISA holders.

~~~
mh_yam
I am in the same boat (bachelors + masters from US universities and on H-1B).

I've been in the US for almost 10 years now since undergrad and have put down
roots (friends, acquaintances, credit history, etc). It is very unfair for us
to be put into the same bucket as body shop labor from India. I personally
know several people who were forced to leave the US because they didn't get
chosen in the H-1B lottery.

There needs to be a new visa that caters specifically to those in our
situation. USCIS needs to let the consultancy companies and body shops compete
among themselves for H-1B and stop screwing law-abiding international students
who have devoted 4-6 (or more) years of their lives to living in the US, who
suddenly might lose everything they've worked for because of the H-1B lottery.

~~~
vitd
Serious question - I don't in any way intend this to sound inflammatory. If
you've been here almost 10 years and have set down roots, why haven't you just
applied to be a citizen? It sounds like you want to stay, and frankly, it
sounds like it would be good for us to have you. Is there something holding
you back beyond just personal preference? (Or are you already in the process
but haven't completed it?)

~~~
dragonwriter
> why haven't you just applied to be a citizen?

IIRC, an H-1B can't apply to be a citizen, you have to be a permanent resident
to do that, which you can only do from an immigrant visa. The H-1B is a "dual
purpose" visa, which is a non-immigrant visa that doesn't require you to leave
the country before applying for an immigrant visa, but you still have to
qualify for one of the immigrant visa categories and make it through any
source-country-specific backlog for that category. (And the vast majority of
tech-industry H-1B's are from India, which is also near the top for waiting
list length in many of the immigrant categories -- including all but one of
the Employment-based categories.)

~~~
vitd
Ah, I see. Thanks for the clarification.

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moon_of_moon
If they made the H1-B system fairer for the immigrant workers, so that they
their employability wasn't tied to a sponsorship, it would actually be better
for American workers.

How?

Because H1-B employees cannot transfer out easily and live in fear of losing
their jobs, because it means packing up and going home. (I can only imagine
how much managerial abuse and in the worst case, sexual harassment this
situation can lead to.) Employers love this arrangement, because it allows
lower wages (the H1B worker isnt going to fight for a higher salary because he
knows its dangerous to walk without another sponsor lined up.) and this pseudo
indentured servitude arrangement makes for dependable employees.

Now if they took that away those restrictions, salaries would increase and
employers would have no incentive to hire an immigrant over a local worker.

~~~
unclebucknasty
Not that I'm in favor of the current system, but your argument is flawed.

How?

Loosening restrictions on sponsorships would invariably result in a net
increase in the available labor pool, which would put downward pressure on
wages for everyone. This is because the program as-is does not restrict people
from changing jobs. It just requires a sponsorship. So, what you are really
advocating is that people without jobs can remain in-country "off-visa". This
is not the purpose of the H1-B program.

So, if you were to allow this, yet still keep the notion of H1-B sponsorship
alive, then there would be the source of the net increase of available
workers.

Now, you could make arguments about lowering the expense and friction involved
for sponsoring companies, which would then increase the appeal of H1-B visa
holders and make finding new sponsors easier. That would probably go further
in the direction of increased salaries you mentioned, so long as you kept the
visa-holder cap constant. But, of course, part of the reason for this
cost/friction is to provide companies with incentives to source labor locally
before looking to non-U.S. labor markets.

It's a complex problem with no easy solutions.

~~~
eru
> Loosening restrictions on sponsorships would invariably result in a net
> increase in the available labor pool, which would put downward pressure on
> wages for everyone.

The labour market doesn't work like that..

~~~
TrickzOnU
How so? Isnt this just a typical supply and demand issue?

~~~
eru
People usually consume a significant part of their income, so they create more
demand.

Also, aggregate demand has more to do with central bank policies than the real
economy.

Yes, in each particular occupation, an influx of people willing to work for
less might lower salaries in that occupation (compare game programing vs CRUD
apps; or magazine journalism vs lawyers), but that doesn't exert downward
pressure on everyone's wages.

In addition, if it's easy to start up new competing companies, the employers
are forced to pass on the savings.

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MrTonyD
I had a friend at HP - who worked in a group arranging for "tourists" to staff
HP projects. It was a "secret" group offsite from HQ and they got lists of
major development projects. Then they worked with recruiters worldwide to find
staff. They would arrange cars at the airport, long term hotels, and rotated
teams in and out of the country to keep the project going. They did this for
years and years.

We need some real laws with real enforcement. Right now, there are too many
ways to evade the H1B program. My understanding it that most foreign workers
aren't using that program - and that other programs were specifically set up
with minimal monitoring in order to provide a way to get around the H1B
program. So the numbers of foreign workers being reported is a complete
fiction.

~~~
jmspring
I think if H1-B, and skilled visas in general, was truly about skill level and
best fit, fine. However, every situation (like Disney) where visas are used to
bring in labor to be trained to replace technical workers who may not
necessarily be the HN crowd, but are a vital part of business, should be
disallowed. If a company wants to offshore, fine, but it shouldn't use the
Visa system to have workers being replaced training their replacements.

~~~
MrTonyD
I don't really know if skill level should be the only consideration. I think
that every country has an obligation to consider its citizens. I'm not saying
that citizenship should be the only consideration - but I do think that it
should be a strong one. Here in the US, I know many technical people who hit
mid-forties and couldn't find a job anymore, in spite of having great
technical skills. So maybe there should be some obligation to make sure that a
country's citizens are doing OK before allowing skill to be the primary
consideration? I don't know -- but I do know that something is wrong with the
way we're doing it now.

~~~
jmspring
I personally hate the H1-B/visa system for anything but skilled graduates
being targeted for specific roles. I also hate the loss of the social contract
where companies actually invested employees and helped them grow.

IBM, Disney and others are trying for a race to the bottom.

I also know that it is incumbent on people in our field to stay on top of
things, continue to learn, etc. But not everywhere has the same access to
knowledge (or may not know how to find it) as those of us already naturally
curious.

In no form should Visas be granted to bring workers over to be trained by
those replacing them. Unless maybe it's something insane like $100k/head going
into training programs. But, that's all fantasy on my part.

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verst
This abuse of the H-1B program also hurts the many students attending US
universities, hoping to gain work experience here post graduation.

Remember that the number of H-1B visas granted every year are capped. Plenty
of students from top US universities (and often at the top of their class)
cannot accept jobs (or only do so for a very short term under the F-1 OPT
program) for which they are the most qualified candidate because they cannot
attain the right to work.

~~~
verst
This might be interesting to some:

The big tech companies in the Bay area may initially hire recent international
student graduates on F-1 OPT status and then attempt to apply for their H-1B.
If this fails the common approach is to move them to Europe (usually Dublin)
to work there for a year. After that time they can return on L-1 (company
internal transfer) visas.

Note that these candidates are extremely competitive in terms of performance,
don't replace anyone, and are paid the same kind of salaries as any other
highly qualified individuals.

~~~
selectron
The don't replace anyone statement doesn't make any sense. Instead of training
foreign workers we could be training American workers for these jobs.

~~~
verst
Are you suggesting that companies should not be able to hire the most
qualified individuals who went through the same system as everybody else?

[EDIT (rephrasing): There is no particular training provided. The
international students received the same education as US students at US
institutions.]

International students generally have to pay for everything out of pocket
(they are not eligible for any public/tax-payer based assistance, not even
subsidized loans). This in effect often subsidizes the cost of tuition for the
domestic students. [EDIT: This is the case in the University of California
system where the percentage of out of state and international students
admissions increases to deal with budget problems.]

The companies in question here expect individuals to have worked on
significant projects, demonstrated ambition and passion outside of their
regular coursework. Those who can generally have no problem being hired.

~~~
bogomipz
Are you seriously saying that foreign students subsidize the education of US
citizens? That is one of the most absurd statements I've ever read on HN. US
student's educations are paid for by student loans, they fund their own
tuitions I can assure you.

Attending university in the US is a privilege and that does not mean you
should be guaranteed a job in the United States upon graduation. You seem to
have a real sense of entitlement that because you went to school in the US the
US owes you a job. Wow.

This idea that the most talented people can only be found from outside the US
needs to just die. If the US were so bereft of talent none of these companies
that these H1B visa folks want to work for would exist. Ditto for the US
universities they attend.

This idea of relocating people to London for year is just gaming the system.

~~~
DrScump
<Are you seriously saying that foreign students subsidize the education of US
citizens?>

It may be a reference to the fact that many public colleges have tuition
breaks for residents.

The other side of that coin is availability. That practice gives those schools
a financial incentive to grant full-retail foreign students admission
_priority_ over residents. That's certainly the case in California.

~~~
verst
The University of California system is exactly what I was referring to.

They increasingly admit more out of state and international students to deal
with their increasing budget problems and to counteract otherwise necessary
larger tuition increases.

I'm not saying this is good or bad. Just stating that this is happening.

------
dangjc
The H1B system favors inexperienced grads straight out of school over truly
experienced workers bringing unique skills. Grads get 3 years on OPT while the
company can navigate the labyrinth H1B application process. A company looking
for a critical senior position for which they cannot have a large class of
intakes is at a huge disadvantage. With the level of unemployment of recent
grads still high, I think we need to seriously rethink how to structure the
H1B program to actually be for uniquely skilled, highly paid workers who would
otherwise be "irreplaceable".

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Animats
Another 50 convictions like this and the H1-B problem will be over.

If your employer is considering replacing you with an H1-B, give them a copy
of this article.

~~~
jordanb
It'll just encourage companies to stick with the big body shops that can
manage the legal risk.

~~~
lallysingh
Concentrate the crimes to a few places, then prosecute those places.

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a_small_island
So what is actually being paid on these H1B as salary? Using something like
h1bdata.info, you can look into any company's filings. For example, the most
recent Uber h1b filing[0] has a rate of pay from 110-140k but only a
prevailing wage of 68k. Any insight as to what these employees are getting for
base salaries?

>"F. Rate of Pay

1\. Wage Rate (Required) From: $ 115,000.00 To: $ 140,000.00"

>"9\. Prevailing wage $ 67,683.00 "

[0][http://h1bdata.info/lca.php?id=4536234&em=UBER%20TECHNOLOGIE...](http://h1bdata.info/lca.php?id=4536234&em=UBER%20TECHNOLOGIES,%20INC.&job=DATA%20SCIENTIST)

~~~
TheCoelacanth
"Wage rate" is what they are actually being paid. "Prevailing wage" is the
legal minimum to be paid for the visa application to be approved for that
specific position. Which just goes to show how much of a joke the prevailing
wage requirement is, since this person is being paid twice what the supposed
prevailing wage for their position is.

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vthallam
As long as the DHS doesn't find a way to shut all these shops and reform the
immigration rules, nothing will ever change.Part of the problem exists with
the thousands of universities which gives admits to everyone who applies
without even a GRE. These universities are pumping the market with resources
these H1B shops rely on. The problem with consulting companies which get
thousands of visas which actually replaces some American jobs is a whole
different story.

All of this takes a comprehensive immigration reforms which encourages merit
based visa assignment than a ridiculous lottery, guess this will takes years
to happen, sadly.

------
known
Indian regime is trying to protect Bania hegemony
[http://www.livemint.com/Leisure/3u2QUPuXBEFPaBQXU2R8mJ/When-...](http://www.livemint.com/Leisure/3u2QUPuXBEFPaBQXU2R8mJ/When-
will-the-BrahminBania-hegemony-end.html)

------
known
Not surprised. [http://business.rediff.com/report/2009/sep/24/indians-
among-...](http://business.rediff.com/report/2009/sep/24/indians-among-most-
corrupt-while-doing-business-abroad.htm)

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splooge
This will definitely curtail the abuse. Nonetheless this is a double-edged
sword. Many so called STEM grads just do it to land a software job. They just
invest a couple of years in some anon university and then bring their self
entitlement and half-baked semi-polished language skills feeling entitled over
guys who invested time and try to find an opportunity to work in the US. These
"Grads" are copious in numbers and sickeningly pretentious. Sadly the system
runs on money and keep feeding these idiots to attract tuitions into half-
arsed universities. Most of them are rich douches with mediocre skills and
can't do a lick without begging around for help. part of the rut.

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someguydave
I think all visas (employment or otherwise) should be auctioned off to the
highest bidder. The "most fair" way to allocate resources is in accordance
with how much people are willing to pay.

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yanilkr
* * un popular opinion alert * *

I don't think the employers in this case deserve prison time. I understand
they are being made example of. This law breaking of h1b ranges from subtle to
glaringly wrong. Where should we draw the line?. What about all the other
consulting companies that do the same thing but have enough influence that
they can get out of being caught? Out of all the people abusing this system,
how is that the names of the convicted people look foreign?

The employment model of these convicted people benefits from a very bad and
outdated h1b law. They find talent every year and get the paperwork done, hope
the lottery wins them some visas and then rent out the talent. In good times,
the employer saves and in bad times shares the misery with the employees. Some
employees might understand this and some don't. They are meeting the demands
of market that allowed them to sustain. The employees sign up for this knowing
all well what is happening.

The employer should compensate the other employees for their losses and they
should be not allowed to hire any other foreign worker. Anything beyond that
is excessive.

This is another case of a developer blaming the user.

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mimo777
Now can Disney go to jail for the same in conspiracy with the outsourcing
company to replace employed tech workers with cheaper H1Bs when that's not
what the visa program is about?

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cplease
About time.

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cloudjacker
> These two brothers created a highly profitable, and highly illegal business
> model at the extreme expense of the alien workforce that they recruited

Independence Day: Resurgence

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dominotw
computerworld hits a jackpot .

