Slap on the Wrist for Big Indian Outsourcing Firm with Hundreds of Visa-Fraud Charges

No Jail Time, No Debarment from Work-Visa Programs

By David North on September 23, 2019

The headline on the ICE press release sounded promising: "Indian management consulting firm agrees to $2.5 million global settlement in North Texas for visa fraud, inducing aliens to enter US".

The firm, Mu Sigma, with operations in Texas and its base, predictably, in South India (Bangalore), had faced two sets of charges:

  • It brought in workers from India on tourist visas (B-1, which do not allow one to work in the U.S. economy) and paid them at Indian pay rates for sustained work in the United States, while apparently charging its clients as if they had been paid U.S. rates; and
  • It forced its H-1Bs to sign illegal bond contracts with $10,000 penalties for workers who left their jobs before a set date; workers leaving their jobs early reduces the corporation's profits.

I had never heard of the firm, whose name refers to terms used in statistics, but it turns out to be a very large one — Forbes says it is worth $1.5 billion.

This was a massive, corporate-level fraud with nine executives identified as "actively participating in these schemes", including training the workers to lie about their intended destination in the States. The investigation went on for six years and must have consumed substantial amounts of staff time.

Further, the "investigation identified about 400 potential B1 visa violators and more than 300 instances of illegal visa bond contracts."

And the result?

No criminal prosecution of the corporation or its executives, an agreement that the firm will behave in the future, and the $2.5 million fine. This, in turn, is a mere 0.17 percent of the firm's net worth, or 17 pennies for every $100 of value.

Meanwhile, two days earlier, Dongyuan Li, of Irvine, Calif., pleaded guilty to one count of conspiracy to commit immigration fraud and one count of visa fraud for her part in running a large birth tourism operation in Southern California.

Her plea package included an agreement to forfeit $850,000 in cash and what appears to be $650,000 or so in real estate and "several Mercedes-Benz vehicles" for an estimated total of $1.5 million. Further, unlike the corporate executives, she faces up to 15 years in prison, to be determined on December 16.

Now, I am not a lawyer, but it sounds to me like the woman with a Chinese name is being punished — appropriately — but far more severely than the big corporation. And she is just one of a group of participants in the scheme.

If the lady goes to jail, she surely will not engage in promoting birth tourism while there.

The corporation — and this is not clear from the press release about Mu Sigma — is going to be able to continue hiring H-1Bs. Given the vagueness of the release, I called the ICE public relations officer on the case to see if the Indian outsourcing company had been debarred for its activities, i.e., prevented from using the H-1B program for a year or two.

He checked and responded a few minutes later to say that there would be no debarment.

The implied lesson: If you are going to break the immigration law on a large scale do it through a corporation.

On the other hand — and this is a nice touch on the part of the Department of Justice — the press release about Li spelled out her name in Chinese.