Sex Slaves and Debauchery in the H-1B Program
While most Bay Area media outlets reported that there were tragic deaths of two young girls,
high school reporters Megan Greenwell and Iliana Montauk dug deeper into what was going on.
These reporters uncovered a story of indentured servitude and sex
slavery. Lakireddy Bali Reddy, millionaire landlord and master
pimp man, used H-1B to import young girls for sexual servitude.
Visa program open to abuses
By Alan T. Saracevic
EXAMINER TECHNOLOGY WRITER
SF Examiner, January 23, 2000
An alleged tale of prostitution, illegal immigration and molestation in Berkeley has reopened one of Silicon Valley's most contentious issues: the use and abuse of temporary work visas.
The unlikely and unwanted attention stems from the highly publicized case of Lakireddy Bali Reddy, the 62-year-old Berkeley landlord who stands accused of smuggling young Indian girls into the United States for the purpose of prostitution, among other charges.
The fact that an H-1B visa was allegedly used to get a man claiming to be the girls' father into the country with them as his dependents has many industry watchers taking a second look at the controversial program.
Created by the Immigration Act of 1990, H-1B visas have become a politically charged issue in recent years. Silicon Valley companies, claiming they can't find enough skilled workers in the United States, have lobbied to increase the number of visas issued every year, enabling them to recruit overseas. Opponents charge the technology industry with ignoring qualified workers here at home.
The H-1B is a temporary visa category for non-immigrant workers that includes specialty occupations requiring a bachelor's degree or higher. In an odd quirk, it also applies to "fashion models of distinguished merit and ability."
According to his arrest warrant affidavit, Reddy misused these visas, bringing Indian nationals over to the United States under false pretenses.
There are at least 21 visa applications filed on behalf of Active Tech Solutions, a software company owned by L. Vijay Kumar, a son of the suspect, the affidavit said. Telephone calls left by The Examiner at Active Tech were not returned.
The business has operated in Berkeley since last November with five employees, according to the city of Berkeley's finance department. The girls Reddy allegedly mistreated were also brought to the United States under the H-1B umbrella, using the "H-4" visas given to close relatives of H-1B recipients.
Typical H-1B occupations include architect, engineer, computer systems analyst, accountant, physician and college professor. Initially, the maximum period of admission is three years but the visa can be updated annually after that initial period. An H-1B recipient may not remain in the United States longer than six years.
Following a protracted political fight, the American Competitiveness and Workforce Improvement Act of 1998 temporarily raised the number of H-1B visas available annually from 65,000 to 115,000 for fiscal years 1999 and 2000, and 107,500 in fiscal year 2001. The act also requires a new H-1B worker fee of $500 paid by U.S. employers. The $500 fee funds training and education programs for U.S. workers.
The increase in visas was viewed as Silicon Valley's first major victory in Washington, D.C., representing the burgeoning industry's growing muscle in the nation's capitol. Opponents accused the government of ignoring its own citizens in favor of big business.
Reddy's arrest, and the resulting allegations that he misused H-1B visas in committing crimes, has reopened that debate. Surprisingly, traditional opponents agree on this one. Both sides feel Reddy's case should not be viewed as typical. "It's something that, until it happens, you don't think about it," said Carl Shusterman, a Los Angeles lawyer who specializes in H-1B visas and supports increasing the annual limits on them. "The thing that would be a shame, as far as the H-1B program is concerned, is if it was seen as a reason not to increase the cap on how many H-1Bs are issued." "If they crack down more on the H-1Bs, people who do these crazy things will simply use student visas and other temporary visas," said Shusterman.
On the other side of the issue, Norman Matloff, a UC-Davis professor and critic of H-1B visas, also warns against using the circumstances surrounding Reddy as ammunition."To me, a case like this is absolutely appalling," said Matloff. "In terms of my role as a critic of the H-1B program, this case is distracting. I consider almost all of these visas as illegitimate."
"It's too easy for industry critics to use this (case) as an example. Frankly, there are larger issues at hand," said Matloff. Those issues include how H-1B is applied and how it is enforced.
How H-1B works
Hiring a foreign worker for a "specialty occupation" is no easy task. To begin the process, the U.S. employer files a Labor Condition Application with the Department of Labor attesting that the H-1B worker will be paid the prevailing wage and offered the same working conditions as other U.S. workers.
According to Immigration & Naturalization Service spokesperson Elaine Gomez, "There is no labor market shortage test required under the H-1B program." In other words, the INS takes a company's word that they can't find home-grown talent.
The Department of Labor, however, does release studies on what job shortages exist. Those studies are usually used to determine the validity of a company's claims. Next, the U.S. employer files a petition with the INS along with evidence of the foreign worker's credentials and qualifications as a specialty worker. Finally, the foreign worker must apply to an American consulate for an H-1B visa before entering the United States.
While abuse of this process is not unheard of, said Shusterman, it's not the norm. Reddy's case, in particular, appear to be an anomaly. "That particular twist is a new one to me, and I've been doing this for 25 years," said Shusterman. "It's usually fraud on the principal worker and not usually involving extra family members."
Indeed, fraud involving the principal worker is fairly common. Last year, the U.S. consulate in the Indian city of Chennai unearthed a forgery ring that was falsifying education and workplace documents. "Some of these job shops would apply for H-1Bs and something would seem funny," said Shusterman. "They'd send it for investigation in India and find the documents were simply forged on a computer. U.S. investigators in India found quite a lot of fraudulent documents."
Easy to fool INS
That doesn't surprise Matloff, who says the entire H-1B process is ripe for fraud. "It's easy to fool the INS as well their employers," said Matloff, holding up the Chennai incident as a case in point. "What's interesting is that these people were coming to the U.S. were fraudulent and the employers didn't know the difference."
In another publicized case, Deep Sai Consulting Inc., of Atlanta, pleaded guilty to alien smuggling charges last November. An INS investigation, sparked by an unusual number of H-1B applications filed by the company, resulted in the conviction of company president Syamala Kaqmineni. The investigation revealed that the majority of visa beneficiaries admitted into the United States did not qualify for the visa and were brought here in anticipation of illegal employment. The workers, according to the INS, were usually Indian.
The fact that these incidents of H-1B fraud involved Indian programmers is not surprising, simply because that country's residents receive approximately 40 percent of the H-1B visas issued every year, according to INS estimates. Indian programmers have successfully used the H-1B program since its inception, becoming one of the most powerful and successful immigration forces in this country's history. Countless firms in Silicon Valley have been launched by Indian technologists, while others climb the corporate ladder at some of the Bay Area's biggest firms.
According to Prem Hinduja, president and chief executive of Global Software Resources in Pleasanton, that migration continues apace. "About 60 to 70 percent of our hires are local," said Hinduja, whose firm specializes in Internet services. "Thirty to 40 percent come from abroad. Primarily, the people we bring in on H-1Bs are from India. This is simply supply and demand.
Hinduja, accompanied by his top technical staff, goes to India three or four times per year, recruiting and meeting with engineering candidates. "When we visit, the interviews are lined up," said Hinduja, referring to Indian recruiting agencies that assist in rounding up candidates. "Then we go through due diligence to make sure the candidates' paperwork is real. There's a lot of fraudulence there."
"We verify their work and education records. Then, we go through an application process here ......... justifying to INS that there is a labor shortage here."
Regarding Reddy's situation, Hinduja was indignant, saying the vast majority of Indian H-1B recipients are upstanding immigrants, looking to improve their lot in life. "I don't think it's very common. I hope it's not very common," said Hinduja. "Unfortunately, some people slip through, which is an unfortunate abuse of this law. It reflects badly on us."
Indeed, Reddy's case has many Bay Area residents asking how H-1B rules are enforced. The fact is, there is little follow-up once recipients come to the United States. "They do minimal spot checking in this system," said Shusterman. "They rely on people to file complaints against the employers if there are abuses."
INS officials concur. "There's no follow-up we do, as far as checking up on employers," said Gomez. "We do expect that employers will come to us when their H-1B employees have violated the terms."