BUSINESS

The Companies Scamming America’s H-1B Worker Visa System

BUSINESS
Feb 03, 2014 at 11:03 PM ET

Just days after Vishrut Kanoria graduated from a top American university on the East Coast this year, he thought he hit the job jackpot. The 22-year-old economics major, who had moved to the U.S. from India in 2009 on a student visa, knew he had to find a job at a company that would sponsor him for a work visa—or he’d be forced to move back to Bangalore.

He found Concepts Information Technology Inc., a tech staffing company that provides IT industry professionals to larger businesses, through his school’s on-campus recruitment program. While many of his friends struggled to find employment, Kanoria packed up his stuff and drove four hours to Vienna, Virginia, to start his new life as a “business analyst.” As a consultant for ConceptsIT, he was told his job would be to translate a client’s needs into technical language so that ConceptsIT’s tech department could “implement the solutions more effectively.”

Technically, while Kanoria would be working out of a client’s office—say, a major bank or telecom company—he would officially be on the ConceptsIT payroll as an employee. The company promised him nice housing, a starting salary of $65,000, free training and—this was the clincher—an H-1B, the three-year work visa created to allow American businesses to hire foreign workers with specialized skills.

But when Kanoria arrived in Virginia that first weekend, he realized it was all too good to be true. “There was no furniture in the living room and no beds in the bedrooms,” he says. “They provided us with a sponge mattress to sleep on. The bathrooms had insects and things really didn’t seem good.” Kanoria’s roommates, who also worked for ConceptsIT, informed him that the company would soon ask him to delete all of his social networking profiles, including his LinkedIn and Facebook accounts, so that there was no chance of them being discovered later by the company’s clients or U.S. immigration.

According to several former ConceptsIT candidates who spoke to Vocativ, the company was using a common scheme to recruit recent graduates on F-1 student visas, whose bachelor’s degrees make them eligible for H-1Bs. On the first day of training, a ConceptsIT staffer told Kanoria that the job was his and that they would sponsor his visa, but there would be a catch: Kanoria would have to use a new résumé, furnished by ConceptsIT, that would claim he had years of work experience he did not. It meant, he says, that ConceptsIT could market Kanoria to its clients as an expert and charge them more for his services. He learned that he would also be locked into a contract with ConceptsIT that would allow them to take a cut of his wages (Kanoria claims, for example, that they would charge a client $61 per hour and pay him only $27) and levy a heavy financial penalty if he left before his full year was up. As Kanoria puts it, “We would receive our H-1B visas by the following year if we did whatever they asked us to.”

In the training room, Kanoria says, “There wasn’t one single American citizen there. Something seemed fishy.”  The business cards he received from his superiors only had first names on them. By the end of that first day, Kanoria was convinced that the situation was all wrong, and he left the next morning.

***

ConceptsIT is just one of at least a dozen companies affiliated with a 43-year-old Indian national living in Virginia named Manish Sangal, who is listed as the director of ConceptsIT. While there appear to be many other individuals involved in the network, according to corporate filings with the Virginia Secretary of State, Sangal is the only person listed as an officer or historical agent at all of them.

Many of the companies linked to Sangal appear to share employees and provide essentially the same staffing services. Several  ConceptsIT’s employees, for example, claim on various LinkedIn profiles to also currently work for Techligent Inc., XcelTech Inc. or Enterprise Business Solutions Inc.

According to public records, Manish Sangal is listed not only as the director of ConceptsIT, but also as the director and president of Techligent and Technical Training Alliance Inc., president of Synchronisys Inc., officer of Business Intelligence System and former president of XcelTech (now in his wife’s name), though the only title he lists on his LinkedIn profile is CEO of Enterprise Business Solutions.

The bulk of the companies under his umbrella offer technical staffing services, which the Techligent website describes as “market leading IT Solutions,” operating under this mission statement: “We do more than just recruit people because we have an innate understanding of the business.” On its website, XcelTech claims to work with globally renowned companies like Wells Fargo, UBS, Lowe’s, Comcast, AT&T, Capital One, Sears and JPMorgan Chase. (Vocativ reached out to these companies but none were able to confirm that they have used XcelTech’s staffing services, though Wells Fargo, Comcast and Capital One informed us that they’re looking into it.) ConceptsIT claims on its website that it partners with “leading clients in the commercial and government sectors,” though a closer look at the partner section reveals only that it “will be avaiable [sic] shortly.” (ConceptIT’s privacy policy is a 404 error page.)

All told, Manish Sangal’s companies have been approved for 25,809 Labor Condition Applications for H-1B workers since 2004, according to public records database MyVisaJobs. An LCA, which certifies that an employer will comply with H-1B wage requirements in its specific region, must be approved by the Department of Labor prior to filing for an H-1B. According to MyVisaJobs, the DOL typically approves about three LCAs to every one H-1B that is eventually approved by U.S. Citizenship and Immigration Services, but that rate is likely much higher in this case. The total number of H-1Bs granted to Sangal’s companies is not publicly available, but by way of comparison, Apple Inc. was granted just 4,660 LCAs over the same 10-year time period. 

Each year, the U.S. caps the number of H-1B visas available to 65,000, with various exemptions. Manish Sangal’s companies eat up a disproportionately large number of those spots.

***

According to Mary, a 23-year-old former business analyst in training at ConceptsIT who asked that we not use her real name, the scam starts with the résumé. A candidate’s original résumé is disregarded and replaced with a ConceptsIT template specific to the field the employee will be working in, effectively adding at least six years of work experience. “I didn’t realize the extent of fraudulent activity this company engaged in until I was given résumés that weren’t me,” she says. “They ignored my entire résumé and thrust me a new one. A couple, actually. I was supposed to become the person on the ‘updated’ résumés.”

ConceptsIT employees, Kanoria says, “We’re all the same person with different names. All the prior internships and work experience I had gained during my life would be useless. I would not be allowed to talk about any of it.” Although their actual degrees would remain the same, he says, the graduation dates would be omitted so that clients wouldn’t become suspicious about a 22-year-old a few weeks out of college with six years of work experience.

Manish Sangal did not return repeated phone calls and emails from Vocativ for comment on this story. What we know about him from publicly available information is relatively limited. According to his very basic LinkedIn profile, Sangal graduated from the University of Tennessee-Knoxville. Records show that he obtained his first Social Security Number in 1992. He has a speeding ticket and a misdemeanor that was dismissed. He owns a condo purchased for $101,500 in 2000 and a single-family home purchased for $955,000 in 2004, both in Virginia, where he lives with his wife, Charu Bhagat. Bhagat is also listed as the president of XcelTech Inc. and Business Intelligence Systems. She did not return phone calls.

We did, however, reach Concept IT Senior Recruiter Vikas Malik on a phone number in one of his job postings. Malik, who is also an account manager at XcelTech, flatly denied that his company ever fabricates résumés or forces employees to delete their social media pages. “We are marketing the best guys,” he says, implying such tactics would be unnecessary. He was unwilling to reveal ConceptITs client list.

Vocativ obtained two template résumés from a trainee who says they were supplied by ConceptsIT on a USB flash drive with instructions that they be filled out with the trainee’s personal information. One is a template for employment in the health care field and the other for the air travel industry. Each lists five to six pages of experience going back to as early as 2004, at which time the employee in question would have been only 14 years old. The fake credentials include work experience at globally recognized companies like Walgreens, Cigna Healthcare and T.J. Maxx. One résumé claims that the candidate is currently employed at Jet Blue.

According to Mary, ConceptsIT trainers told candidates that they would make up for the fabricated résumé experience with real training, which also turned out to be untrue. “What they called ‘training to become a good business analyst’ was actually a crash course in pretending to be a good business analyst with years of experience,” Mary says.

“I was abhorred by the fact that no one was bothered that they are running a sham,” she says. “I was so disgusted with everyone.”

One former XcelTech employee, Anupam Sinha, who recently left the company after four years, had a slightly different take. Reached at a number on his LinkedIn profile and asked if his résumé was ever changed by the company, Sinha says, “Not exactly. People tend to update their résumés according to the job description to highlight, but I won’t say that they changed the résumé or something like that.”

Sinha first told us that XcelTech had sponsored him for an H-1B visa, but he quickly changed his story, insisting that he never applied for the H-1B because he had only worked at XcelTech in India and was currently living there. The phone number at which we reached Sinha appeared to be a landline registered in Pennsylvania, and his LinkedIn page states clearly that he currently works in Media, Pennsylvania.

***

For Kanoria, the fake résumé revelation was a deal breaker, but fortunately for him, he had yet to sign a contract—though not for lack of trying. He had asked Rahul Johar, the president of ConceptsIT, for a written contract from the start but had been repeatedly brushed off. Then he was told a contract would be provided on the fifth day of training. “We would not even have a chance to glance through it before that,” he says, adding that he was expected to sign on the spot without any outside vetting.

Mary, who actually signed her contract, says it contained a clause stipulating a fine of $7,500 for leaving before her full year was up. When she did eventually leave, ConceptsIT didn’t pursue her for the money. Mary requested that we not share the details about when she left and where she currently works for fear of reprisals. After Kanoria left, he spent a few months searching in vain for another job but eventually had to move back to Bangalore, where he now works as a Marketing Trainee at India’s largest online supermarket, BigBasket.com.  

Many claiming to be former XcelTech employees have taken to anonymous job review websites to vent their frustration with the company, though we were unable to substantiate the claims. On one MyVisaJob.com message board devoted to discussing XcelTech and a similar board on DesiCrunch, several users have complained about fake résumés, being trapped in contracts and being penalized or intimidated for leaving.

Additionally, there are at least five separate posts on these job boards that allege that XcelTech has asked employees to pay for their own H-1B visas, which if true would be a major violation. The cost of a visa, which can run up to $5,900, not including lawyers fees, legally falls at the feet of the employer. When we reached out to XcelTech for comment, the operator wouldn’t transfer our call, but she did offer this: “We are too big to do petty things like make them pay for H-1B.”

***

 Though a recruiter had promised Kanoria a yearly salary of $65,000, the trainer in Virginia told him he would be paid hourly instead, which Kanoria calculated would reduce his take home pay to about $40,000. And that figure would actually turn out to be even less, he was told, depending on how much time he spent “on bench,” a term used to describe the down time between projects with a client. “During this time,” Kanoria explains, “We would not be paid nor would that time be counted towards the one year that we are required to work for.”

It is illegal for employees to be benched without pay while on an H-1B visa. Additionally, any salary less than $65,000 places a much higher burden on employers to show that there are no U.S. citizens qualified for the job, according to William Stock, a vice president of the American Immigration Lawyers Association.

While on an H-1B, if a salary is reduced mid-way through employment, an employee can complain to the Department of Labor. Several people claiming to be ex-employees of XcelTech on job boards say they have filed such complaints.  But according to the DOL, because the nature of these complaints is criminal, it is unable to confirm or deny any complaints have been filed until a grand jury brings an indictment.

“This kind of ‘body shopping’ has been going on for more than three decades, and the firms, many of which are locating in New Jersey, can be unscrupulous,” says Ron Hira, assistant professor of public policy at Rochester Institute of Technology and co-author of Outsourcing America. “It’s a highly profitable business model.”

A “body shop” is a term used to describe a staffing company that hires H-1B beneficiaries who are then placed with third-party employers. And according to the Department for Professional Employment, a coalition of 21 national workers unions, many of these body shops are Indian-owned companies that provide IT staffing services to U.S. companies: in 2012, six of the top 10 H-1B employers were body shops with headquarters in India.

According to a 2011 report from the Government Accountability Office, Department of Labor investigators in the Northeast, where the highest number of H-1B complaints are received, say that “nearly all of the complaints they receive involve staffing companies and that the number of complaints are growing.”

DOL Wage and Labor investigators in the report say that H-1Bs are almost impossible to track for various reasons, but also that many “H-1B workers are likely to be reluctant to file complaints against employers for fear that the company might be disbarred, which in turn could result in the complainant and fellow H-1B workers at the company losing their jobs and potentially having to leave the United States.”

On the occasions when these body shopping firms do get caught, the consequences aren’t particularly punitive. Companies may be forced to pay back wages, or in some cases, get banned from applying for future H-1Bs.

“The reality is that the back wages that the firm might have to pay aren’t great,” Hira says. “And the worker will have to wait for the process, which can take a few years to work its way through the system.”

Recently, however, there have been a few high-profile exceptions to the rule. In March 2013, Indian national Phani Raju Bhima Raju, principal of a company called iFuturistics, pled guilty to “participation in a fraudulent scheme to obtain false H-1B immigration visas for foreign workers,” after a two-year joint investigation by ICE, the DOL and Homeland Security. Among his many crimes was not paying employees on H-1B visas while they were on bench, “contrary to the salary claims made in the application forms.” In February 2013, Dibon Solutions, a family-owned firm in Texas, was indicted on 11 counts of wire fraud for submitting false documents to the USCIS and DOL and for benching employees without pay. And Infosys, an Indian tech outsourcing company, recently agreed to pay a record $34 million in a civil settlement after a federal prosecutor in Texas found that the company committed “systemic visa fraud and abuse” with workers brought from India.

But cases like these appear to have little if any chilling effect on body shops like XcelTech, which continue to operate in plain sight.

“We will get you a job and make sure you all are placed. We start at $25.00 per hour. no flat salary We will do your H-1B and also make sure of your GC [Green Card]. You will have to pay for the H1 and GC cost,” wrote someone using the name Sourabh Arora, XcelTech’s vice president, in a recruiting post that has appeared publicly on PCReview.co.uk since 2010. “Our staff is excellent and knows everything about fake resumes, you will not get caught, our employees love us.”