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Ex-CEO Gets Prison for H-1B Fraud Scheme Involving 250 Workers

Sept. 23, 2019, 4:09 PM

The former chief executive officer of two information technology consulting companies was sentenced to more than seven years in prison for running an H-1B visa fraud scheme involving some 250 workers.

Pradyumna Samal, an Indian citizen who had fled the U.S. during the visa fraud investigation, operated the “largest and most sophisticated H-1B visa fraud scheme” prosecuted in western Washington, said Brian Moran, U.S. attorney for the Western District of Washington.

The scheme harmed both H-1B specialty occupation workers, who were deprived of pay, and U.S. workers, who were deprived of job opportunities, Moran said.

A representative for Samal wasn’t immediately available for comment.

The Trump administration has heavily scrutinized H-1B visas with an eye toward uncovering fraud, especially in the IT consulting industry. As a result, large consultants such as Cognizant Technology Solutions, Infosys Ltd., Capgemini, and HCL America Inc. have seen visa approval rates far below those of other companies.

Administration policies targeting the industry are the subject of litigation.

The investigation against Samal started in 2015 under the Obama administration.

Forged Visa Applications

Samal headed Divensi and Azimetry, two consulting companies that supplied tech workers to corporate clients.

In this role, he submitted fake H-1B applications to the government that lied about projects to which the workers would be assigned and forged the signatures of executives at his client companies, the U.S. attorney’s office said.

Once the workers were granted their H-1B visas, they were illegally “benched"—placed in out-of-work status and not paid—while the companies found them real job placements. The workers also were made to pay a partially refundable “security deposit” of $5,000 to cover their visa fees, regardless of whether they were ever assigned to a paying job, the U.S. attorney’s office said.

Samal also kept some $1.1 million in withheld income that should’ve covered employment taxes and instead used the money to purchase a luxury car, pay his mortgage, and handle his personal accounts in India, said Justin Campbell, special agent in charge of the Internal Revenue Service’s Criminal Investigation Division.

In addition to prison, Samal was ordered to pay restitution for the tax loss and a $10,000 fine.

The case is United States v. Samal, W.D. Wash., No. 2:18-cr-00214, judgment 9/20/19.

To contact the reporter on this story: Laura D. Francis in Washington at lfrancis@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Martha Mueller Neff at mmuellerneff@bloomberglaw.com