Back in 2011, a retail store executive must have said "Let's stop using those expensive H-1B workers and switch to foreign workers on tourist visas."
A Virginia-based business, which runs some of those kiosks you see in malls, did just that and now 10 of its executives and other staffers face 34 criminal counts and the prospect of years in federal prison. The story came to light when one of the 10 pleaded guilty, an act that in similar circumstances leads other conspirators to do the same thing. (Aliens on tourist visas are not allowed to work in the United States.)
An observer can look at the case as either a glass half full or half empty; in the former case it is good that the feds caught up with the scheme, in the latter one wonders why this multi-million dollar fraud was able to survive for five years before it was discovered.
Pleading guilty in Newport News, Va., was Eyal Katz, an Israeli; he and the other nine worked for an inter-connected group of companies under the name Rasko. The kiosks mostly sold skin care products associated with the Dead Sea, and most of the people involved were from Israel.
This was not a modest business; the indictment speaks of $140 million in sales in a three-year period. There are many indications in the 49-page indictment that the employer frequently cheated both the government and the workers by paying in cash (and in gift cards!) and skipping income tax deductions and payroll taxes. There were some 140 workers on the B-2 visas.
As is usually the case with court indictments, many implied questions remain unanswered. For instance: The old ad agency hand in me asks why use the image of the hot, ultra-salty, skin-drying Dead Sea to sell skin-care products? And, more significantly, how could the government hand out H-1B visas to retail clerks? Those visas are supposed to go to skilled workers, usually college graduates. Finally, will the illicit workers be deported, as they should be, or will they be allowed to run around loose? (They were not among those indicted.)
The charges against the executives include visa fraud, encouraging and inducing illegal entry, harboring illegal aliens, and the conspiracy to launder money. The number on the PACER system of federal court records is 4:16-cr-00017-RAJ-LRL. (The initials at the end of these numbers, incidentally, are those of the district court judge presiding over the case, and that of the assigned magistrate judge.) The case is in the Eastern District of Virginia.