Trenton, NJ, August 17, 2021 – United States District Judge Peter G. Sheridan granted in part, and denied in part, a Motion to Dismiss filed by Defendants Cognizant Technology Solutions Corporation and Cognizant Technologies U.S. Corporation (“Cognizant”) in a False Claims Act lawsuit for visa fraud.
Relator Jean-Claude Franchitti filed his lawsuit under seal on behalf of the United States on August 22, 2017. Relator alleges that Cognizant deprives the United States government, in violation of 31 U.S.C. § 3729(a)(1)(G), of significant tax revenue and visa application fees by improperly underpaying H-1B visa employees (who are required by law to be paid at least the same as their similarly situated non-visa counterparts) and by improperly securing less expensive B-1 or L-1 visas for employees who require more expensive H-1B visas to work in the United States. He also alleged that Cognizant falsifies jobs and work on visa applications to fraudulently obtain visas, in violation of 31 U.S.C. § 3729(a)(1)(A) and (B). After the government declined to intervene, the case was unsealed, and Cognizant moved to dismiss the complaint. Cognizant moved under Federal Rules 8(a), 9(b), and 12(b)(6), raising four arguments in support of its motion: (1) that Relator failed to allege that Cognizant submitted any claim for payment, or had any obligation to pay the government, (2) that Relator’s claims are barred by the public disclosure bar / original source doctrine, (3) that Relator failed to plead materiality, causation, and/or that Cognizant acted knowingly in defrauding the government, and (4) that Relator failed to plead Rule 9(b)’s heightened particularity requirements. Relator opposed the motion on all grounds.
Judge Sheridan denied the Motion to Dismiss, in part, on August 17, 2021. Judge Sheridan dismissed Relator’s 31 U.S.C. § 3729(a)(1)(A) and (B) claims that Cognizant knowingly submitted false documentation in conjunction with its visa applications because visas are not property, but held that Relator adequately alleged reverse-FCA claims under 31 U.S.C. § 3729(a)(1)(G) with respect to underpayment and improper obtainment of B-1 and L-1 visas in lieu of H-1B visas. Judge Sheridan noted that Cognizant’s obligation to pay the correct visa fee accrued upon its submission of the B-1 and L-1 visa applications, and it was obligated to pay the appropriate fee and not misrepresent employees’ work to pay lower application fees. With respect to Cognizant’s alleged underpayment of H-1B visa employees, Judge Sheridan held that such claims were not barred by the tax bar provision of the FCA because the Immigration and Nationality Act, and not the tax code, regulates visa employees’ wages and the Secretary of Labor, and not the Internal Revenue Services, is tasked with enforcing such violations.
The parties continue to litigate the case.
The Motion to Dismiss Order is available here.
The case is United States ex rel. Franchitti v. Cognizant Tech. Sols. Corp., No. 3:17-cv-06317 (D.N.J.)