A Hyderabad-based technology company operating in the United States has admitted to committing fraud to bring Indians on the H-1B visas, according to a federal prosecutor. The firm is accused of running a ‘bench and switch’ scam, where contracts were allegedly forged to bring workers from India to the US. Jomon Chakkalakkal, the corporate representative of Cloudgen, made the admission before a federal court in Houston, Texas, on behalf of the company on May 28, said acting federal Prosecutor Jennifer B. Lowery.
The prosecutor's office in a news release circulated on Monday described the scam as a "bench and switch" ruse. It said that under the scam, in order to obtain the H-1B visas, Cloudgen submitted "forged contracts" showing that third parties had work for the persons it wanted to bring over. But once the employees came to the US there was no job for them and they were housed in different locations across the US, while Cloudgen would try to find work for them, according to the office.
"Such action gave Cloudgen a competitive advantage by having a steady 'bench' or supply of visa-ready workers to send to different employers based on market needs when the true process actually takes some time. Once workers had obtained new employment, the 'switch' would occur when the new third-party company filed immigration paperwork for the foreign workers," the prosecutor's office said.
Cloudgen took a percentage of the worker's salary, which amounted to nearly $500,000 from 2013 to 2020 when the scam took place, it said. Chief Judge Lee Rosenthal of the Southern Texas Federal Court is to impose a sentence in September and it could be a fine of as much as $1 million and probation for five years. The prosecutor's office said that Cloudgen was based in Houston, but on its website, the company lists an address in Manassas in Virginia. The firm also has offices in Hyderabad’s Gachibowli area and at locations in Canada and Romania. Chakkalakkal is described on the website as the senior Vice President for Sales. Sasi Pallempati is named as the President of Cloudgen.
Earlier in 2019, four men including 2 persons from Andhra Pradesh were arrested in the United States on charges of using the H-1B visa program to gain an unfair advantage over competitors. The accused were operating the recruiting firms - Procure Professionals Inc. and Krypto IT Solutions Inc.
In this instance, the accused recruited recruit foreign nationals and sponsored them for H-1B visas through the recruiting firms. This allowed the recipients of the visas to live and work temporarily in the US in positions requiring specialised skills. To expedite their visa applications, the accused in the case filed H-1B applications falsely asserting that the foreign worker/beneficiaries had already secured positions with a client, when, in reality, no such positions existed, informed.