Three Indian-origin high-tech consultants have been arrested and charged with H1-B visa fraud in a California federal court, according to US officials.

Kishore Dattapuram, Kumar Aswapathi and Santosh Giri were charged with allegedly submitting fraudulent H1-B visa applications for non-existent jobs, according to federal prosecutor David Anderson.

A citizen’s panel known as grand jury made the determination after initial hearings, he said.

They will be tried on the charges to determine their guilt later.

The three have denied the charges and were released on bail, officials said.

According to court papers, they ran a consulting firm, Nanosemantics, Inc., which placed workers with other companies, and submitted the fake H1-B visa applications so that they could have a ready pool of workers for placement with other customers.

Several visa applications submitted by them “stated that particular workers had specific jobs waiting for them at designated companies when, in reality, the defendants knew that these jobs did not exist”, the officials said.

In one case, they allegedly orchestrated payments by their company to someone for permission to list his company as the employer even though they planned to place the workers elsewhere, according to court papers.

H1-B visas are non-immigrant visas given to professionals or highly qualified people. According to US government data, 309,986 H1-B visas, or nearly 74 per cent, were held by Indians last year.

President Donald Trump’s administration has announced a crackdown on visa fraud and changes to the H1-B visas system to give greater preferences to applicants educated in the US and to tighten the regulations governing the work visas.

Because the number of applicants far exceeds the 65,000 visas available every year, they are allotted through a lottery.

IT major Infosys has flagged off concerns around increased rejection of work visa applications, and said this could result in delays and increase in project costs for its clients.

The Bengaluru-based company has already been ramping local hiring in key markets like the US to tackle increasing scrutiny around work visas by various governments.

“Recently, there has been an increase in the number of visa application rejections. This has affected, and may continue to affect, our ability to obtain timely visas and staff projects. As a result, we may encounter delays or additional costs in managing such projects,” Infosys said in a recent regulatory filing.

Infosys also noted that the company may have to apply in advance for visas or could incur additional cost in maintaining such visas that could result in additional expenses.

The company also warned that its international expansion strategy, and business could be materially adversely affected if change in immigration and work permit laws impairs its ability to staff projects with local workers.

Previously, Infosys had stated that stricter work visa norms across various markets like the US and Australia will not “constrain” its business growth as the IT firm is focussing on hiring locals and training workforce in these geographies.

“….what we are building with this localisation approach is really gearing towards making sure that our business model evolves in the right way, without sacrificing the best elements of the business model for the future. So, I don’t think we see that this is going to constrain our business growth,” Infosys CEO Salil Parekh had said.

Over the past many months, there has been increased scrutiny over the temporary work visas in various countries like the US and Australia. This has prompted many Indian IT companies to tweak their business models by reducing dependence on visas and hiring more people overseas, instead.

Infosys has announced that it is setting up four technology and innovation hubs and hiring about 10,000 locals in the US over a two-year period. Of this, about 4,000 people have already been hired.

Tightening of H-1B work visa norms by the US is likely to put cost pressures on the Indian IT services firms and impact their margins due to increase in compliances and rise in onsite hiring, according to a report.

However, the impact will be company specific and relative to H-1B visa dependence, rating agency Icra said in its report.

“The changes will disqualify certain positions currently eligible for H-1B visas, thereby impeding the movement of low-cost skilled labour from India and will have direct bearing on margins,” said Gaurav Jain, vice-president, corporate sector ratings, Icra.

The US is also contemplating on awarding visas to the most skilled or to highest-paid beneficiaries.

Icra feels this move will work against the Indian IT services sector (H-1B dependent) as the average wage is approximately lower by 25 per cent compared to companies that are not dependent on H-1B visas as per estimates.

A firm is defined as H-1B dependent if more than 15 per cent of its US full-time employees are on an H-1B visa.

Jain said awarding of H-1B visas based on highest skill or compensation, will leave less headroom for Indian companies to get such visas.

Consequently, increased onsite hiring or raising the compensation for H-1B visa applicants will impact companies’ margins and will be credit negative, he said.

“However, the impact will be company specific and relative to H-1B visa dependence,” he added.

The US government is also planning to permanently end work authorisation (H-4 visa) granted to spouses of H-1B visa holders.

Icra feels revoking such visas will have an indirect negative impact on workers currently employed on H-1B visas or seeking such visas whose spouses are working professionals.

Jain said Indian companies have started to ramp up onshore hiring.

“Leading firms are also increasing their proportion of offshore work to reduce dependence on such visas, though the magnitude of such shifts is expected to be marginal as only certain services are amenable to higher offshoring (testing, IMS) compared to others,” he said.

Overall, Icra expects a ramp up in onshore hiring, particularly for entry-level programmers to maintain a competitive cost structure, while reducing dependence on H-1B visas for such low-cost skilled

In 2016 technology professionals from India accounted for 74.2 per cent of the total number of H-1B visas issued by the US and the next year the figure increased to 75.6 per cent, a government report said here today.

However there has been a drop in the number of new H-1B beneficiaries from India, the official report has said. China with a little over nine per cent, comes a distant second after India in terms of number of H-1B visas. The figures for China were 9.3 and 9.4 per cent respectively for 2016 and 2017.

The number of beneficiaries from India approved for initial employment decreased by 4.1 per cent in fiscal 2017, while the number of beneficiaries approved for continuing employment increased by 12.5 per cent in fiscal 2017, the USCIS said in its latest report titled ‘Characteristics of H-1B Specialty Occupation Workers’.

United States Citizenship and Immigration Services (USCIS) said petitions for initial employment are filed for first-time H-1B employment with an employer, only some of which are applied to the annual cap. Examples of petitions for initial employment that are exempt from the cap include petitions submitted by nonprofit research organisations or governmental research organisations.

Continuing employment petitions refer to extensions, sequential employment and concurrent employment, which are filed for foreigners already in the US. Extensions generally are filed for H-1B workers intending to work beyond the initial three-year period up to a total of 6 years, the maximum period generally permissible under law.

In 2016, as many as 70,737 Indians received initial H-1B visas, which dropped to 67,815. During the same period, Indians accounted for 185,489 visas for continuing employment, which increased to 208,608 in 2017. In all there were 256,226 Indians on H1B visas in 2016 and 276,423 in 2017.

A copy of the report, sent to US lawmakers on April 10, became public this week.

Dismantling several myths about H-1B, USCIS said the median salary of beneficiaries of approved petitions increased from USD 82,000 for fiscal year 2016 to USD 85,000 for fiscal 2017.

While the number of H-1B petitions filed increased 1.24 per cent from 398,718 in 2016 to 403,675 in 2017, the number of H-1B petitions approved increased 5.9 per cent from 345,262 in 2016 to 365,682 in 2017.

According to the report the number of H-1B petitions approved in 2017 for workers between the ages of 25 and 34 was 66.2 per cent, the number of H-1B petitions approved in 2017 for workers with a bachelor’s degree was 45.2 per cent.

In addition, 44.5 per cent of approved petitions were for workers with a master’s degree, 6.8 per cent had a doctorate, and 3.3 per cent were for workers with a professional degree. The number of H-1B petitions approved in 2017 for workers in computer-related occupations was 69.8 per cent, it said.

The number of H-1B petitions approved for workers in computer-related occupations increased by 6.6 per cent from 237,837 in 2016 to 254,592 in 2017. The number of H-1B petitions for all other occupation groups increased by 3.4 per cent from 106,418 in 2016 to 110,009 in 2017, the report said.

An Indian-American owned IT company in California was today asked to pay USD 173,044 in wages to 12 of its foreign employees, most of them from India, in violations of the H-1B visa program salary requirements.

Investigations carried out by US Department of Labour’s Wage and Hour Division revealed that some of the H-1B employees that information technology provider Cloudwick Technologies Inc. brought from India with promised salaries of up to USD 8,300 per month instead received as little as USD 800 net per month.

Notably, the crackdown on the company came just a day after many countries in the world celebrated the International Labour Day (International Workers Day or May Day).

Based out of Newark in California in the famed Silicon Valley Indian-American Mani Chhabra is the founder and CEO of the Cloudwick Technologies, as per the company’s website.

It describes itself as leading provider of bimodal digital business services and solutions to the Global 1000. Its services include big data, cloud, advanced analytics, business intelligence modernisation, data science, big data pilot-to-production, IoT, mobile application development.

According to the company, its clients include the likes of Bank of America, Comcast, Home Depot, Intuit, JP Morgan, NetApp, Target, Visa, and Walmart.

Investigators found that the company paid impacted employees well below the wage levels required under the H-1B program based on job skill level, and also made illegal deductions from workers’ salaries.

“The intent of the H-1B foreign labour certification program is to help American companies find the highly skilled talent they need when they can prove that a shortage of US workers exists,” said Susana Blanco, Wage and Hour Division District Director in San Francisco.

“The resolution of this case demonstrates our commitment to safeguard American jobs, level the playing field for law-abiding employers, and protect guest workers from being paid less than they are legally owed,” Blanco said.

In addition to the recovery of back wages, the IT employer has also signed an enhanced compliance agreement requiring them to hire an independent third-party monitor to help ensure future compliance, a media release said.

To further deter and detect abuse, US Citizenship and Immigration Services has established a dedicated email address which will allow individuals (including both American workers and H-1B workers who suspect they or others may be the victim of H-1B fraud or abuse) to submit tips, alleged violations and other relevant information about potential H-1B fraud or abuse.

Silicon Valley companies and high-tech ventures are among the largest employers of foreign workers with H-1B visas. The number of visas awarded each year is capped at 85,000.

Lakhs of H1-B visa holders in the US have heaved a collective sigh of relief over the Donald Trump administration’s decision not to change its non-immigrant permit policy.

Of late, over half a million H1-B visa holders, a majority of them are Indians, have been on tenterhooks over reports that the US is seriously considering to curb giving work permits to foreigners as part of President Trump’s “ Buy American and Hire American” policy. In fact, pressure is building up on the Indian government to persuade Trump not to go ahead with the move, using Prime Minister Narendra Modi’s good offices.

Had the Trump administration gone ahead with the proposed restrictions on issuing H1-B visas, lakhs of Indian techies working in the US would have been badly hit. The American Dream of those who have applied for green cards would have been shattered. And, for those who have been waiting in India hoping to go to the Land of Dreams on H1-B that would have been the end of the road. But, now, they are all relieved.

According to a statement made by US Citizenship and Immigration Services Chief of Media Relations John Withington, “US Citizenship and Immigration Services is not considering a regulatory change that would force H-1B visa holders to leave the United States by changing our interpretation of section 104(c) of AC-21, which provides for H-1B extensions beyond the 6 year limit. Even if it were, such a change would not likely result in these H-1B visa holders having to leave the United States because employers could request extensions in one-year increments.”

Before the Trump administration clarified its policy, rumours were rife that green card applicants whose visas had expired would be deported en masse despite the fact that there was widespread resentment to the move from top American IT titans. They had said that the proposal would stymie growth and acquisition of knowledge and free flow of talent.

Amid reports of the US administration’s plans to introduce stricter norms for issuance of H1-B visas, which are largely availed by Indian IT firms, the US-India Business Council (USIBC) has voiced its opposition to the move.

“It would tremendously be a bad policy to tell highly skilled individuals who are applying for permanent residency and have been working in the US for several years that they are no longer welcome,” a USIBC spokesperson said in a statement.

“This policy would harm American business, our economy, and the country,” the spokesperson said. “Further, it is inconsistent with the goals of a more merit-based immigration system.”

Last month, US-based news agency McClatchey’s DC Bureau reported that the Department of Homeland Security is considering new regulations that would prevent H-1B visa extensions. The measure potentially could stop hundreds of thousands of foreign workers from keeping their H-1B visas while their green card applications are pending.

According to the report, the proposal is part of US President Donald Trump’s “Buy American, Hire American” initiative promised during the 2016 campaign.

The act, under its current form, allows the administration to extend the H-1B visas for thousands of immigrants, predominantly Indian immigrants, beyond the allowed two three-year terms if a green card is pending.