Manipulation and Fraudulent Practices
US’s biggest foreign worker employment policy, the H-1B visa lottery, is being manipulated and exploited by staffing and outsourcing companies, according to an explosive report by Bloomberg. The report reveals that in 2023, 446,000 people sought H-1B visas, but only about 85,000 were available. It further states that over 11,600 visas went to multinational outsourcing companies with vast overseas workforces that flood the lottery with entries, and another 22,600 went to IT staffing firms. Bloomberg’s analysis found that nearly half of the H-1Bs went to these companies, many of which cheated on a massive scale by submitting multiple entries for the same worker.
How the Rigging Works
Data from 2020-2023, obtained by Bloomberg through a lawsuit against the Department of Homeland Security, highlights how certain staffing firms have ingeniously exploited the H-1B lottery system through a practice known as “multiple registration.” This tactic involves submitting multiple entries for a single individual to enhance their chances of securing a visa, a manipulation the US Citizenship and Immigration Services (USCIS) characterizes as “fraud.” The findings indicate that about 15,500 visas, or roughly one in six awarded last year, were obtained through such fraudulent means.
Case of Kandi Srinivasa Reddy
One particularly egregious case is that of Kandi Srinivasa Reddy, an Indian American who came to the US in the early 2000s and later started his own company, Cloud Big Data Technologies LLC. Reddy’s operation involved submitting multiple applications for the same individuals under different company names to increase their chances of being selected in the lottery. Bloomberg’s investigation revealed that Reddy controlled several entities, including Cloud Big Data Technologies LLC and Machine Learning Technologies LLC, which submitted numerous entries for the same workers. Since 2020, these companies have secured hundreds of H-1B visas.
Impact and Response
Reddy’s company rented the workers on contract to corporations such as Meta Platforms Inc and HSBC Holdings Plc, with advertisements claiming a collection of 20-30% of the worker’s pay, amounting to $15,000 or more annually per worker. Lucas Garritson, a Texas lawyer representing Reddy, stated that the USCIS had challenged several of the companies’ visas for abusing the lottery system but had not followed proper procedures or provided proof of rule violations. The USCIS appears hamstrung in its ability to enforce regulations effectively, raising critical questions about the agency’s enforcement capacity.
How the H-1B Lottery System Works
Originally designed to allocate H-1B visas on a first-come, first-served basis, the USCIS switched to a lottery system due to overwhelming demand with a cap of 85,000 visas. Each year, the lottery draws names randomly from the pool of applicants, which has nearly doubled in recent years, making the chances of securing a visa increasingly slim.