Indian American company indicted for defrauding H-1B visa system

NEW YORK (TIP): An Indian American company based in Texas has been indicted by federal authorities on charges of fraud and misusing the H-1B visa to create a low-cost workforce for third party clients in the US. The multi-count indictment filed last month and unsealed this month against top officials of the Dibon Solutions of Texas – Atul Nanda, Jiten ‘Jay’ Nanda, Siva Sugavanam, Vivek Sharma, Rohit Mehra and Mohammad Khan – alleges that the company paid H- 1B visa-holding employees only when there was work. It also alleges that the Nanda brothers – the owners of the company – conspired to fraud the H-1B system. The indictment alleges that Dibon hired foreign workers on H-1B visas and instead of paying them, used them to work for a third company and gave them salaries only when they worked for the said third company. The company “sponsored the workers on H-1B visas with the stated purpose of working at Dibon headquarters in Carrollton, Texas, but, in fact, required the workers to provide consulting services to third-party companies located elsewhere,” the indictment alleges. “Contrary to the representations made by the conspirators to the workers (and the government), the conspirators paid the workers only when the conspirators placed the workers at a third-party company and only if the third- party company actually paid Dibon first for the workers’ services,” it said. Additionally, in Dibon’s visa paperwork, it falsely represented that the foreign workers held full-time positions and were paid an annual salary, as required by regulation to secure the visas, the indictment alleges.

This scheme provided the company with skilled foreign workers who could be used on an “as needed” basis, profitable because it required minimal overhead and Dibon could charge significant hourly rates for a computer consultant’s services. This scheme is known as “benching”. Benching is defined be the Department of Labor (DOL) as “workers who are in ‘non-productive’ status due to a decision by the employer, such as lack of work.” “Dibon actively recruited H-1B workers and “benched” them,” the indictment said. According to the charge-sheet Dibon’s “benching” scheme was facilitated by the company as a staffing company. Dibon employed H-1B work with third-party companies. “The design of the H-1B system worker to perform services for the petitioning company, i.e. Dibon. In fact, regulations required that a petitioning company inform the government in petitions if the workers were assigned to a different location that the petitioning company’s address-which Dibon did not do,” it said.


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