A US court has refused to dismiss a lawsuit against Cognizant for defrauding the federal government’s worker visa programme.
A lawsuit filed by a former executive under the False Claims Act (FCA) alleges that the IT giant had been bringing workers to the US using business or intra-company visas, instead of using the more expensive H-1B work permits.
Cognizant is one of the biggest sponsors of H-1B visas for foreign information technology specialists.
Jean-Claude Franchitti, a former assistant vice president of the Teaneck, a New Jersey-based company, alleged that Cognizant underpaid for visa costs for its foreign employees by applying for the L-1 and B-1 visas, instead of the required H-1B.
United States District Judge for the District of New Jersey, Peter Sheridan, said last week that Cognizant had an obligation to pay the appropriate fee for the privileges associated with its desired visa. The company had argued that the FCA did not apply to records and statements made under the US Internal Revenue Code.
“By paying for L-1 and B-1 visas but directing its employees to perform work that required the more expensive H-1B visa, Cognizant decreased—and made false statements material to—its obligation to pay money to the government,” the judge observed in his order.
“The internal email correspondence submitted by Franchitti is plausibly sufficient to allege that Cognizant committed this violation knowingly. Finally, Cognizant’s false statements are material because if it accurately represented the nature of its employees’ work, its visa applications would likely have been rejected or its employees’ visas revoked, consistent with USCIS policy and practice,” he wrote.
The Judge added that while Cognizant had not violated tax laws, it could potentially be violating immigration laws.
“In sum, because Franchitti’s claims concern a violation of the immigration – not tax – laws, and because the secretary of labor – not the IRS – is the authority tasked with enforcing the prevailing wage provision, the tax bar does not apply here,” the Judge said.
Like many others, Cognizant maintains a large base in India — and deploys staff on American projects by applying for the appropriate visa category.
