New York, NY, November 29, 2022 – Plaintiffs/Relators-Appellants have appealed the U.S. District Court for the District of Connecticut’s Order granting HCL Technologies Ltd. and HCL America, Inc.’s (“HCL’s”) Motion to Dismiss Relators’ reverse-False Claims Act (“FCA”) claims.
Relators allege that HCL engages in pervasive and widespread visa fraud in applying for and securing visas for its foreign workforce, resulting in significant financial harm to the United States government. Specifically, Relators allege that HCL’s conduct violates the FCA in two ways. First, Relators allege that while HCL is required to pay H-1B visa employees at least as much as it pays similarly situated non-visa employees working in the same geography, it unlawfully underpays H-1B visa employees, thereby depriving the government of significant tax revenue. Second, Relators allege that HCL improperly secures B-1 visas, which are reserved for short-term non-wage generating business travel, and L-1 visas, which are reserved for managers and subject matter experts, for employees who are required to have an H-1B visa to work in the U.S. Because B-1 and L-1 visa applications are cheaper than H-1B visa applications, this fraudulent practice has resulted in the government’s loss of significant visa application revenue.
HCL moved to dismiss Realtors’ operative Fourth Amended Complaint on September 28, 2021, arguing that Relators’ reverse-FCA claims fail because Relators cannot allege facts demonstrating that HCL avoided or decreased any obligation to pay money to the government as required for liability under 31 U.S.C. § 3729(a)(1)(G). HCL argued that there was no established duty for it to pay for H-1B visas (in lieu of B-1 and L-1 visas), because HCL never in fact applied for the more expensive visas, which would trigger the obligation. HCL further argued that any taxes owed to the government for H-1B visa employee wages were speculative, and that HCL was not obligated to pay taxes on wages never paid to employees. The District Court agreed, dismissing Realtors’ complaint with prejudice on July 28, 2022.
Relators appealed two issues:
1. Whether the District Court erred in dismissing Relators’ reverse-FCA claim arising from HCL’s fraudulent and unlawful underpayment of H-1B visa employee wages and corresponding taxes, where HCL had a regulatory obligation to pay H-1B visa employees at least as much as similarly-situated non-visa employees and HCL falsely certified on an ongoing basis that it was doing so.
2. Whether the District Court erred in dismissing Relators’ reverse-FCA claim arising from HCL’s fraudulent avoidance or decreasing of its obligation to seek and pay for H1-B visas by applying for cheaper L-1 and B-1 visas using false and fraudulent representations, and unlawfully and consistently utilizing employees to perform work requiring H-1B visas without having sought or paid for H-1B visas.
Oral argument was held on April 21, 2023 and the parties are awaiting a decision from the Second Circuit.
The Fourth Amended Complaint can be found here.
The case is United States ex rel. Billington v. HCL Tech. Ltd., 22-1854 (2nd Cir.).
Updated April 21, 2023.