A US court has declined to dismiss a lawsuit against the leading consulting firm, Cognizant, for defrauding the government’s visa programme and for committing immigration fraud. A lawsuit filed by a former executive under the False Claims Act (FCA) alleges that the IT major had been bringing workers to the US using a business or intra-company visas instead of using H-1B work permits.
Cognizant is one of the most prominent sponsors of H-1B visas for foreign IT specialists. Like many other major tech players, Cognizant maintains a large base in India and deploys staff on American projects by applying for the appropriate visa category. Jean-Claude Franchitti, a former assistant vice president of the New Jersey-based company, Teaneck alleged that Cognizant underpaid for immigration visa costs for its foreign workers and employees by applying for the L-1 and B-1 visas instead of the required more expensive H-1B.
United States District Judge for the District of New Jersey, Peter Sheridan, said last week that Cognizant is obliged to pay the appropriate fee for the privileges associated with its desired visa. The tech giant had argued that FCA did not apply to statements and records made under the US Internal Revenue Code. The Judge noted that by paying for L-1 and B-1 visas but making its employees and staff perform work that comes under the much more expensive H-1B visa, Cognizant decreased and made false statements material to its obligation to pay money to the government.
He wrote that the internal email correspondence submitted by Jean is plausibly sufficient to allege that Cognizant committed the immigration fraud willingly. He further added that Cognizant’s false statements are material because if they vividly represented the nature of its employees’ work, its visa applications would likely have faced rejection or its employees’ visas might have been revoked, consistent with USCIS policy and practice.
The Judge noted that while Cognizant had not committed any form of violation of tax laws, it could potentially be violating immigration laws. The Judge said that in sum, because Jean’s claims concern a violation of the immigration, not tax laws, and because it’s the secretary of labor and not the IRS that is tasked with enforcing the prevailing wage provision, the tax bar does not apply in this case.