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Computerworld - A Texas IT services firm has been indicted by federal authorities for using H-1B visa workers to create an inexpensive "as needed" labor force.
A multi-count indictment filed last month charged that Dibon Solutions of Carrollton, Texas only paid Visa-holding employees when there was work.
[A LOOK BACK: H-1B at 20]
The full scheme is outlined step-by-step in papers filed in the U.S. District Court for the Northern District of Texas, Dallas Division.
The indictment says that Dibon recruited foreign workers and sponsored them for H-1B visas to work at the firm's headquarters, but required them to provide consulting services to third-party companies located elsewhere.
The company only paid the H-1B workers when they were placed at a third party company, "and only if the third party company actually paid Dibon first for the workers' services," it said.
This scheme, the indictment alleges, "provided the conspirators with a labor pool of inexpensive, skilled foreign workers who could be used on an 'as needed' basis."
This operation "was profitable because it required minimal overhead and Dibon could charge significant hourly rates for a computer consultant's services," according to the indictment.
The IT firm "earned a substantial profit margin when a consultant was assigned to a project and incurred few costs when a worker was without billable work," the government wrote.
The scheme of only paying H-1B visas holder when work is available is called "benching," and has been cited in other, unrelated legal actions as well as in complaints filed by visa holding workers.
When H-1B employees are assigned to work at different locations, regulations require the petitioning company to inform the government.
As general rule, H-1B workers are supposed to be paid prevailing wages based on location. For instance, higher rates typically paid in places like New Jersey and California and lower rates in states such as Iowa.
Moreover, the H-1B rules don't allow employers for forego pay when there is no work.
The company is described as family owned. Named in the grand jury indictment Are Atul Nanda, Jiten 'Jay' Nanda, Siva Sugavanam, Vivek Sharma, Rohit Mehra, and Mohammad Khan. Efforts to reach the company were unsuccessful by press time.
The multi-count indictment also includes wire fraud for using email to execute the scheme.
In 2011, the U.S. brought a visa fraud case against that resulted in fines and probation.
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is email@example.com.
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Originally published on www.computerworld.com. Click here to read the original story.