Tiny Firm with Eight Workers Wants 1,646 H-1Bs — How Does DoL React?

Update: DoL rubber-stamps more than 1,000 applications filed by a fraudster

By David North on January 12, 2022

On January 8, we wrote about a little labor brokerage firm that apparently filed for over a thousand more H-1B slots than it currently has, and how the U.S. Department of Labor (DoL) rubber-stamped all of the applications even though more than 900 of them were for the same job title, had the exact same salary, and all were to work out of an apartment in Schaumburg, Ill., in the Chicago suburbs.

We have since been informed that the little firm filed for only a handful of the job slots and that the great bulk of the applications were filed by someone named Sumanth Voruganti. The relationship, if any, between Voruganti and the firm, is not known. DoL was told by the firm that they disowned the applications filed by Voruganti.

The little firm, Tekorg, Inc. of Sterling, Va., may or may not be seeking an unreasonable number of labor condition applications, as we wrote previously, but DoL, ignoring the clues noted above, did rubber-stamp its approval of at least 1,646 LCAs for the firm before the firm alerted Dol of the fraud.

We are currently awaiting answers to several questions regarding this case, as Tekorg has told us that all of its answers must be cleared by their lawyers.

So, an incomplete grade for Tekorg, Inc., and a resounding F- for DoL.

Our original January 8 article is below, with new information in bold italics.

January 8, 2022 — There is a tiny labor brokerage firm, apparently headquartered in Northern Virginia and/or in the Chicago suburbs. Dun and Bradstreet estimates that it has eight workers; the Myvisajobs website says it got certifications for 35 H-1B workers in 2020. (These two statements, as will be explained later, are not necessarily in conflict.) Other sources suggest that it may have as many as 50 workers.

It operates out of what appears to be an apartment in Schaumburg, Ill., and a small office or apartment in Sterling, Va. The genuine firm is in Sterling.

Dun and Bradstreet estimates the revenues of Tekorg Inc. at $281,063 a year.

If you google the firm, you will find that its CEO is Ajay Kumar Boyapati; if you google him, you find that he is a young student in India, or was when we last looked at this part of the internet. We do not know, but he could be an H-1B himself. An informant tells us that Boyapati, a U.S. citizen, is dead, and repeated efforts to have Tekorg tell us the name of the current CEO have been made in vain. Why Tekorg permitted the misleading data about it regarding its CEO, its payroll, and its visa application record on myvisajobs.com to remain on the internet has not been explained, despite my queries.

We have examined several databases in this regard, and find that at least 942 of the 1,646 applications came from the apartment in the Chicago suburbs and every one of the 942 applications in that group is for a single job title: “Senior SQL Data Manager” (SQL is database management system software) and every worker is to be paid exactly the same amount — $79,768 a year — not a very impressive wage in the high-tech field. In another set of files, covering all would-be H-1B hires, the average Tekorg wage for FY 2021 is shown as $80,210.

The Myvisajobs website can be seen here and the DoL decisions on the group of 942 are here.

What do you suppose happened when that firm told the U.S. Department of Labor (DoL) by way of petition filings that it will pay 1,646 H-1Bs more than $132 million a year if it will grant 1,646 approvals of labor condition applications (the first step toward an H-1B visa)?

Those approvals would expand the firm’s workforce from perhaps eight to 1,654 (a more than 200-to-one ratio). The payroll, again using the Dun and Bradstreet estimate, would inflate by a ratio of 470 to one. All of the numbers come from calculations made from public documents, and all of the information about the company and its late CEO is available to anyone using a computer, including DoL employees

So how did DoL react to this crazed proposal? Laughter? A letter full of bureaucratic language saying “no”?

Not at all. Of the 942 applications filed from the apartment in Schaumburg, none were rejected but several hundred were subsequently withdrawn by the employer, or maybe we should write “employer”.

The Myvisajobs website, using data obtained from DoL and apparently combining the little firm’s applications from both the office or apartment in Sterling and the apartment in Schaumburg, shows a total of 1,646 certifications in FY 2021 and 885 (I assume other) applications marked as certified and withdrawn. There is no indication of a single application being rejected by DoL in the Myvisajobs tabulations. Whether the 885 is in addition to the 1,646 or a part of it is unknown.

Welcome to the crazy math of one part of the H-1B program and to DoL’s rubber stamps.

Background. Let’s step back a bit, and see why such a bizarre set of applications and subsequent decisions could be made in this program, which has an annual congressional ceiling of 85,000 new H-1B visas for the profit-making part of the economy, and some 300,000 or so applications for those slots. H-1B workers are temporary nonimmigrant workers and there probably are 900,000 or so of them in the nation at any one time. They are concentrated in the high-tech industries and are usually college grads, most from India and China.

Until this hiring season, a would-be H-1B employer had to complete a full, long application for each worker and had to pay the government upwards of $6,460 in fees, these fees to be returned to the employer months later if it did not win the lottery. These fees, plus in many cases fees paid to lawyers to write the applications, could easily reach $10,000 to $15,000 for each desired worker. These requirements kept the number of applications down to a reasonable number.

The $6,400 total includes a specific fee of $4,000 per worker if the employer, like many of the "body shops" (staffing firms) such as Tekorg, has a workforce where 15 percent or more are H-1Bs. They are called "H-1B-dependent employers". Big “solution” companies, like Microsoft and IBM, are not in this category and don’t pay the $4,000.

Then, for last year’s lottery, the government changed the rules: An employer did not need to file the full application unless it won the lottery, and the various upfront fees were reduced to $10, which could not be refunded. The employer only had to fill out the long form and pay the full set of fees if it won the lottery.

Suddenly, marginal shops like Tekorg found that they could file for many more workers than before, at little cost, so they some of them filed large numbers of applications in the hopes of securing visas for these workers and then renting them to other firms.

And the industry, which has always understated the availability of citizen high-tech workers, could look at the number of filings and claim — falsely — that there is a labor shortage. DoL apparently — at least in this instance — played along and allowed all of Tekorg’s applications to enter the lottery, from which employers usually get about a third of the applications filed.

The Calculations. While it is nominally correct to say that an organization filing for 1,646 H-1B jobs has made a promise to pay those workers a total of more than $132 million for their services, it is also appropriate to say, as we did above, that usually an employer gets only about one out of three slots applied for in the lottery. Thus, the little firm, unless it withdrew some of the approvals, would have to meet a payroll of $132 million divided by three, or about $44 million a year — still an unlikely accomplishment for one with an estimated income of a little over $280,000 a year.

The one-hit-for-three-tries figure also supports our earlier statement that having 35 certifications and eight actual workers on the job were not in conflict.

A Typographical Expression of Shame. One of the advantages of DoL’s H-1B data system is that it provides critics of the program with oodles of raw data. In this instance — and I have been dealing with the program for decades and have never encountered anything like it — we see what can only be described as a typographical expression of shame.

In many, if not all, of applications one can review online we see the following:

The managers of Tekorg apparently do not like admitting that theirs is an H-1B-dependent firm and have responded to a yes-or-no question on the subject with a “yes” in the tiniest type available while responding to other, less threatening questions with full-sized type. I saw no other variations in type size elsewhere in Tekorg’s filings. Both the genuine and the fraudulent applications carried the tiny type for "yes".

The Bottom Line. The Department of Labor’s staff handling these applications always has the chance to ask questions of those seeking H-1B benefits to make sure that the applications are, in fact, approvable. One of the potential problems with lavishing so many visa slots on such a small company is that some of the newly arrived workers will not, in fact, be placed in actual jobs and that they will be, in the words of the industry, “benched” without pay.

That is against the rules. For more on that illicit practice, see here.

That possibility is a real one even if the numbers were much smaller, and even if there were no other tell-tale signs of problems — like all those jobs going to a single, narrow skill set, and all the jobs getting the same pay.

It makes sense if you are hiring field workers that all the tomato pickers are given the same piece rate, but if you are looking for high-tech skills and the industry says that it wants the best and the brightest, why do 942 jobs have the exact same requirements and exactly the same wages?

The broader problem, of course, is that instead of taking steps to protect American workers, which should be the aim of the department, DoL is just making it easier for employers to use semi-indentured, compliant alien workers rather than making those employers compete in the American labor market.

Should we secure more information from Tekorg or its lawyer, we will share it with our readers.

The author is grateful to two people who assisted with this blog: Matthew Bonness, an activist, and my son, Rodney North.