Two Employees Of Information Technology Companies Arrested For Harboring Foreign Workers

NEWARK, N.J. –Two employees of SCM Data Inc. and MMC Systems Inc. were arrested today for their alleged roles in a scheme that fraudulently used the H1-B visa program to reduce skilled labor costs, U.S. Attorney Paul J. Fishman announced.   

Hiral Patel, 32, and Shikha Mohta, 31, both of Jersey City, New Jersey, were each charged by complaint with one count of conspiracy to bring in and harbor aliens and to obstruct justice. They are scheduled to make their initial court appearances this afternoon before U.S. Magistrate Judge Mark Falk in Newark federal court.

According to the complaint:

SCM Data and MMC Systems offered consultants to clients in need of IT support. Both companies recruited foreign nationals, often student visa holders or recent college graduates, and sponsored them for H-1B visas. The H1-B program allows businesses in the United States to temporarily employ foreign workers with specialized or technical expertise in a particular field, such as accounting, engineering or computer science. As part of the H-1B program, the Department of Homeland Security (DHS) and the Department of Labor (DOL) require employers to meet specific labor conditions to ensure that American workers are not adversely impacted, while the DOL’s Wage and Hour Division safeguards the treatment and compensation of H-1B workers. Congress sets a numerical cap for the admission of skilled workers into the United States.

Patel, Mohta and other conspirators recruited foreign workers with purported IT expertise who sought work in the United States. The conspirators then sponsored the foreign workers’ H1-B visas with the stated purpose of working for SCM Data and MMC Systems’ clients throughout the United States. When submitting the visa paperwork to the DHS, the conspirators falsely represented that the foreign workers had full-time positions and were paid an annual salary, as required to secure the H-1B visas. Contrary to these representations and in violation of the H-1B program, Patel, Mohta and others paid the foreign workers only when they were placed at a third-party client who entered into a contract with SCM Data or MMC Systems.

In some instances, Patel, Mohta and others generated false payroll records to create the appearance that the foreign workers were paid full-time wages. On multiple occasions the conspirators required workers to pay SCM Data or MMC Systems their gross wages in cash. In exchange, SCM Data or MMC Systems would subtract taxes and fees and issue payroll checks to the foreign workers in a smaller amount. The conspirators then encouraged the foreign workers to submit the bogus payroll checks to the DHS as proof that the workers were engaged in full-time work despite the fact that they were not working for SCM Data and MMC Systems.

This scheme provided Patel, Mohta and others with a labor pool of inexpensive, skilled foreign workers who could be used on an “as needed” basis. The scheme was profitable because it required minimal overhead, and SCM Data and MMC Systems could charge significant hourly rates for the foreign workers’ services. The conspirators earned a substantial profit margin when a foreign worker was assigned to a project and incurred few costs when a foreign worker was without billable work.

The conspiracy charge with which Patel and Mohta are charged carries a maximum potential penalty of five years in prison and a $250,000 fine.

U.S. Attorney Fishman praised special agents of the U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), under the direction of Acting Special Agent in Charge Kevin Kelly, and the Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigations, under the direction of Special Agent in Charge Cheryl Garcia, with the investigation leading to the charges.

The government is represented by Assistant U.S. Attorneys Anthony Moscato and Francisco J. Navarro of the U.S. Attorney’s Office Criminal Division in Newark.

The charges and allegations contained in the indictment are merely accusations, and the defendants are presumed innocent unless and until proven guilty.

patel_hiral_and_mohta_shikha_complaint.pdf (1.18 MB)