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Are the Feds finally cracking down on H-1B visa fraud?

It looks like the federal government might finally be cracking down on H-1B visa fraud. The controversial program, which many unemployed and underemployed IT workers will tell you is the reason they’re not earning a decent living, has been under fire in recent years. And last week the U.S. Attorney’s office in Iowa announced that the federal government has arrested 11 people in six states under suspicion of committing H-1B visa fraud. The U.S. Attorney has also indicted Vision Systems Group Inc., a New Jersey-based  IT services company on 10 criminal counts, including mail fraud and conspiracy (You might notice that all of the links on Vision Systems’ web site appear to be inactive at the moment).

The H-1B visa system was designed to allow companies to bring highly skilled foreign nationals, particularly foreign nationals with IT skills, into the United States to fill jobs for which there is a shortage of domestic skilled labor. Companies are required by law to pay H-1B visa holders a salary equal to the prevailing regional wage for the role he fills. For instance, network administrators are paid more in New Jersey than they might be in Mississippi, so a company that hires a foreign worker to work in New Jersey should be paying that worker a New Jersey salary, not a Mississippi salary.

However, critics of the H-1B program, particularly Senator Chuck Grassley (R-Iowa), say that many companies are gaming the visa system, using the program to important cheaper foreign labor and displacing domestic workers. (Note that the U.S. attorney heading this particular investigation is from Grassley’s home state). Critics say companies frequently forge documentation about the qualifications of these workers and violate the prevailing wage requirements of the visa program. Last October, Grassley released a report which suggested that as much as 20% of such visas could be fraudulent.

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