Recent $9.9 Million Visa Fraud Settlement Shows Potential for False Claims Act Cases

TAF Blog Post: Recent $9.9 Million Visa Fraud Settlement Shows Potential for False Claims Act Qui Tam Cases to Address a Broad Scope of Frauds Against the Government

On April 10, 2023, the United States Attorney’s Office for the District of South Carolina announced that L&T Technology Services Limited (“LTTS”), an India-based company that provides engineering services and personnel to companies in the United States, had agreed to pay $9,928,000 to resolve allegations that, between 2014 and 2019, LTTS had violated the False Claims Act by underpaying visa fees. Specifically, when LTTS staffed projects in the United States with foreign nationals, it allegedly acquired inexpensive B-1 visas rather than more expensive H-1B visas.

The case was initiated by a whistleblower, Mark Harmon, who stands to receive between 15 and 25 percent of the settlement amount. Outsourcing companies’ improper use of B-1 visas rather than H-1B visas is not uncommon, and the settlement with LTTS shows the potential for whistleblowers to use the False Claims Act to bring these types of fraud to the attention of the government, and to earn a reward for doing so.

Sponsoring employers may seek H-1B visas for citizens of other countries who come “temporarily to the United States to perform services . . . in a specialty occupation.”[1] Congress limits how many of these can be issued each year, and they’re expensive. By contrast, foreign company employees entering the United States temporarily for “business” purposes may be eligible for a “B-1” temporary visitor visa, for which there is no cap and which costs only $160. Government regulations prohibit the use of B-1 visas for “labor for hire.”[2]

The LTTS settlement is not the first time the government has used the False Claims Act to crack down on an outsourcing company that brought foreign nationals into the United States to work using B-1 visas rather H1-B visas. In 2013, for example, Infosys Ltd., another large India-based outsourcing company, agreed to pay $24 million to resolve False Claims Act allegations that it used B-1 visa holders to perform skilled labor and to circumvent the requirements, limitations, and governmental oversight of the H-1B visa program,

These settlements show that whistleblowers can bring qui tam suits under the False Claims Act suits to seek redress for many types of fraud against the government. Most False Claims Act cases involve health care fraud or defense contracting fraud, because spending on health care and defense are the two largest components of the federal budget. But unscrupulous businesses can defraud a wide variety of government programs, including visa programs that exist to protect American workers from losing their jobs to non-citizen “labor for hire.” The False Claims Act enables people to blow the whistle on all of these frauds.

Gregg Shapiro of Gregg Shapiro Law

[1] 8 U.S.C. § 1101(a)(15)(H)(i)(b).

[2] 22 C.F.R. § 41.31(b)(1).