H-1B Worker Takes on ‘Fraud by Association’ Visa Revocations

USCIS seeking to revoke H-1B for fraud by former employer Question of whether employer or worker can challenge decision Chicago-based tech worker Sridhara Alavala is trying to block the government from revoking his temporary work visa over his former employer’s 15-year-old fraud. He’s currently arguing before a federal judge in Washington, D.C., that US Citizenship and Immigration Services put him on the hook for the misconduct and failed to let him know of its intent to revoke his H-1B specialty occupation visa. USCIS even acknowledges the fraud was committed by the president of Kronsys Inc. and not Alavala, his lawsuit says, yet the agency is still going forward with a revocation that could lead to his removal from the US for something he didn’t do. “Basically it’s fraud by association,” said Jonathan Wasden, Alavala’s attorney. The case comes amid a USCIS crackdown on the H-1B practices of third-party contracting companies like Kronsys, which can have adverse effects on the workers themselves. The agency recently overhauled the annual lottery for H-1B visas to weed out abuse by unscrupulous contracting firms that it said had submitted thousands of duplicate registrations for individual workers to boost their odds of selection. It’s also proposed in forthcoming regulations a mandate for contracting firms to cooperate with site visits and to introduce added scrutiny of a third party’s job requirements where a worker is placed by those firms. Sanctioning immigrant workers for employer misconduct doesn’t promote integrity by encouraging workers to report potential wrongdoing, however, because it actually discourages that conduct, part of the structure of the employment-based visa system, said Angelo Paparelli, a partner at Vialto Law (US) PLLC. “This is a broader phenomenon. It’s not limited to this particular situation,” Paparelli said. Employer Sanctions North Carolina-based Kronsys submitted an H-1B visa petition on Alavala’s behalf in 2010, allowing him to land one of just 85,000 new visas available under the program annually. He worked on a contract for Wells Fargo until moving to a Chicago-area bank in 2014 that sponsored him for several H-1B extensions as well as an immigrant visa petition required to receive a green card. More than five years later, the president of Kronsys was sentenced to 12 months in federal prison for conspiracy to commit visa fraud involving H-1B petitions. The Department of Justice charged that the company filed petitions claiming that it had in-house IT projects for foreign workers when in reality it didn’t have legitimate work projects lined up for the positions. Instead, they were “benched"—put in unproductive status without pay—while the company looked for new third-party contracts for them to work on. Alavala and his current employer in Chicago learned two years after the sentencing that the conviction would have consequences for his status in the US. A letter from USCIS notified the company of plans to revoke Alavala’s H-1B visa, a decision that the agency said was based on fraud committed by Kronsys, not Alavala. The notice stated that the original visa petition filed for Alavala stated he was to work on a project “known to be fraudulent” because it improperly placed workers at end clients rather than in-house. That he didn’t actually work on the project wasn’t pertinent to the decision, the government said. That notice “was a shocker to me,” Alavala said in an interview. For H-1B holders, a visa revocation would mean loss of nonimmigrant status and their ability to stay in the US in most circumstances. “We were not aware of fraud allegations against my previous employer,” he said. “We never expected that my H-1B petition would get impacted because of that.” USCIS violated the Administrative Procedure Act by never giving Alavala a chance to respond to the planned revocation of his visa despite being an affected party, his lawsuit argues. An H-1B visa number under the statutory cap grants a recipient rights and benefits such as the ability to transfer to new employers as Alavala did, making him an interested party, the suit argues. The agency also made findings of fraud involving his visa that are unsupported by the evidence, the suit claims. USCIS also exceeded its jurisdiction by issuing sanctions for violations of a labor certification approved by the Department of Labor. USCIS didn’t respond to a request for comment on the lawsuit. In court documents, the government said that it acted according to its mandate under the Immigration and Nationality Act to revoke the visa petition, and nothing in the regulations implementing that law provide for notice to beneficiaries of those actions. Narrow Options In at least one recent settlement involving a sting operation at a sham university, the Department of Homeland Security agreed not to punish visa holders unaware of the fraud. But immigration attorneys say visa holders who see their immigration status affected as a result of fraud committed by employers have few legal options. “The H-1B—and this is true of most employment-based visas—belongs to the employer. It’s run by the employer,” said Anna Gorisch, an attorney at Kendall Immigration Law who specializes in the specialty occupation visa program. “That means in this situation there really aren’t a lot of avenues for relief.” Alavala’s lawsuit argues that the fraud prosecution against Kronsys couldn’t have proceeded after a 2020 court settlement invalidated a USCIS policy requiring staffing companies that place H-1B workers at third-parties to specify all the sites where the visa holder would work during the duration of their three-year visa term. He argues that USCIS contended, without evidence, that an in-house project at the company was fraudulently offered to comply with that policy—a finding the government said there was ample evidence for. While the settlement involved USCIS requirements for what must be on a valid H-1B petition, the agency has followed up that case with more back-end enforcement such as site visits by USCIS officials and attempts to revoke visas, said Jeff Joseph, a partner at immigration firm BAL. Visa holders like Alavala, though, face tough prospects of establishing that they should be legally seen as the affected party, rather than just the employer, he said. “USCIS really is trying to go after beneficiaries when they should be going after petitioners,” Joseph said. “The problem is you only get to make that argument if you have standing to get into court in the first place.” The government has developed a more sophisticated ability to detect fraud and to connect visa holders to current and former employers across multiple years when violations allegedly occurred, said Bill Stock, a managing partner at Klasko Immigration Law Partners LLP. In some instances, a visa holder is knowingly involved in the employer’s fraud, but often employees are just as misled as the government, he said. In other situations, one or more petitions may be fraudulent, but USCIS assumes that other bona fide petitions filed by the same employer are fraudulent as well, Stock said. “I hope one of the results of this lawsuit is both more timely notification to beneficiaries but also a recognition that USICS does have an obligation to sort through innocent beneficiaries from participants in the fraud,” he said. The case is Alavala v. DHS, D.D.C., No. 1:23-cv-00413. For more information, visit us at https://www.beverlyhillsimmigrationlaw.com/.