Taking Names: List of Firms Barred from Foreign Worker Programs Likely Just Scratches the Surface

David North is a CIS Fellow. The author is grateful to Sarah Wilhelm, then a CIS intern, for her assistance in annotating this list.

The Department of Labor can bar companies from participating in foreign-worker programs due to misconduct. While the total number of such debarments is small, many of the individual cases are fascinating and grim stories of corporate greed and worker abuse. A state-by-state listing of violators is attached at the end of this report. It should be a tempting menu for investigative reporters seeking good stories and/or for graduate students looking for research topics.

While there are large numbers of employers participating in the various foreign-worker programs run by the U.S. Department of Labor, all starting with the visa letter H, DoL rarely finds one of them violating the rules seriously enough to even temporarily suspend their participation. We have, using various federal sources, compiled an annotated list of the misbehaving companies that have been debarred by DoL: in many cases the nature of the abuse is both fascinating and depressing.

If you told someone that there was a population so pure and law-abiding that only about one in a 1,000 members of it was in trouble, no one would take you seriously. Surely out of any sample of 1,000 soldiers, or college graduates, or priests, or politicians, or factory workers, or what have you, there would be more than a single person who had misbehaved.

As a matter of fact, for every 1,000 American males over the age of 18, about six of them are in prison.¹

But the U.S. Labor Department (DoL) operates in a different and apparently better world — only about one out of every 1,000 users of its foreign labor programs is in trouble for abusing those systems. Maybe the users of foreign workers are paragons, or more likely the department is not very rigorous when it comes to enforcing its own rules and the laws laid down by Congress.

Meanwhile, as many others have noted, these programs are deeply controversial and are widely regarded as operations that cut wages for, and deny jobs to, resident workers. For more on these critiques, see the writings of Martin, Matloff, and Seminara on the H-2A, H-1B, and H-2B programs, respectively.²

Bear in mind, as we discuss these departmental punishments for the abuse of these programs, that merely depressing wages in the U.S. labor market, or participating in schemes that shove aside American workers, is not considered an abuse. One must do something additional, such as not keeping promises about pay rates, misleading foreign workers during the recruitment process, engaging in fraud, or receiving kickbacks from the alien workers, to be penalized. One ultra-creative crook took aliens illegally in this country, sent them home, and brought them back as apparently legal nonimmigrant workers — all for a substantial set of fees.

The department’s punishments for the infractions it sees are pretty mild; in the worst-case scenarios the employers are debarred from the program; they are told that they cannot have any more foreign workers for from one to three years. (There are other kinds of debarments, for instance, from government contracts, but this paper deals primarily with the Labor Department’s penalties regarding its own temporary worker programs and the permanent labor certification system.)

These are all civil penalties. A few violate the law so thoroughly that they actually spend some time in jail, but you can use the fingers on one hand to count the number of foreign-worker employers who become prisoners, nationwide, per year.

The U.S. Labor Department imposes penalties (sparingly) in three foreign-worker programs. Two of these are for temporary workers: H-1B for high tech workers, and H-2A for farm workers; the third is the permanent one for admitting resident aliens as needed workers. Other federal agencies (State, DHS, and sometimes Justice) play roles in these programs, but Labor hands out the employer penalties. (I could not find a penalized-employer list for another of DoL’s foreign worker programs, that for H-2Bs, who are low-skilled, non-agricultural workers, but there is an excellent Government Accountability Office (GAO) report on some of that program’s errant employers.³)

In the H-2A and the permanent program, the penalty is simply debarment; a time period is decreed by the department and in that period the designated employer cannot have any more foreign workers. The H-2A program usually involves a relatively small set of employers, each bringing in large numbers of workers at the same time, to work on, for example, tobacco or vegetable crops. The permanent workers, who get labor certifications, are individual cases.

The other temporary worker program of interest, that of the H-1Bs, is used by both large and small operators, and the workers who are admitted are kept for years at a time. It also has a more complex penalty system. An employer designated as a willful violator is barred from the program for one to three years and can use no foreign workers in this time span. (Presumably the greater the violation, the longer the debarment.) After the debarment a lesser punishment takes place, the abusing H-1B employer has more restricted access to nonimmigrant workers, and this condition persists through a period of five years from the date of the initial debarment.

What is described above are the willful violators of the H-1B program. There are also non-willful violators, who go through a year or two of debarment, but the second kind of penalty, the restricted access to H-1B workers, does not apply to them.

Returning to the idea that only a tiny, tiny fraction of employers are penalized for misusing the program, let’s look at some numbers.

During FY 2009 there were 58,956 employers who filed petitions in the H-1B program, according to a recent GAO report.⁴ In addition there were tens of thousands of other H-1B employers who had previously filed petitions that were still valid in that year as an H-1B visa is usually good for three years. Let’s ignore the others and simply use 58,956 as a rough (and understated) proxy for the size of the H-1B employer population.

In contrast, there are 60 H-1B employers (two of which appear on the department’s debarred list twice) who had been penalized by the Department over the last five years.

The ratio is 1 to 983.

Similarly, in FY 2009 there were 7,665 approved applications⁵ for H-2A farmworkers, and the Department of Labor’s list of debarred participants consists of six names. Again, that is a multi-year list.

That ratio is 1 to 1,278.⁶

The H-2B program has about as many approved applications as the H-2A program, and perhaps a roughly comparable number of employers. There were 5,998 certified applications in FY 2009.⁷ The GAO report and ICE press releases have identified 12 violators.

That ratio is 1 to 500.

If you add up the three approximations for employers in the temporary programs (72,619) and the total number of identified program abusers (78) the grand ratio is 1 to 931, over a multi-year span of time.

In FY 2009, some 58,000 workers were admitted in the first, second, and third preferences for employment-based permanent immigrants.⁸ There does not seem to be a count of their employers, but since many of them file for only a single worker, there must be well over 10,000 of them.

In contrast, the department’s multi-year debarred list for these permanent employers has only four names on it.

If one were to use the 10,000 guestimate above, the ratio would be 1 to 2,500.

For some data on specific government-identified misbehaving employers in foreign worker programs, by name and location, see the list that follows and the accompanying notes.

DHS Also Engaged in Fraud Detection

Meanwhile, the Department of Homeland Security (DHS) is also engaged in the investigation of fraud in foreign-worker programs, but it handles its reporting in such a way that the kind of mathematical analysis, spelled out above for the Department of Labor, cannot be duplicated.

DHS does three things in connection with naming companies that it finds have violated some part of the immigration law.

First, like Labor, it issues press releases about particularly egregious situations; these releases are usually about cases involving multiple violations, substantial sums of money, and criminal indictments. For example, two years ago in Iowa DHS broke up a massive conspiracy and issued a release headlined: “11 arrested, indicted in multi-state visa fraud operation.”⁹

It was a 10-count federal indictment, with a claim against the perpetrators for a $7.4 million forfeiture, and recounting violations in Iowa and several other states. In this case the press release indicated that H-1B violations (among others) were involved and it identified the indicted company as “Vision Systems Group, Inc., a New Jersey Domestic Profit Corporation with a branch office in Coon Rapids, Iowa.”

Second, DHS adds names of companies breaking the immigration law, in various ways, to the overall government list of people and firms debarred from federal contracts on the huge government-wide “Excluded Parties List System.”¹⁰ ICE added 249 firms and individuals to that catch-all compilation, with most of them earning the distinction outside the H-1B program; most of them had been found hiring illegal aliens.

Third, from time to time, DHS picks up the DoL debarred lists and distributes them with its own imprimatur.¹¹

Notes on the Penalized Employers’ List

The list that follows consists of users of foreign-worker programs that have been penalized by the United States and have been identified individually in one or more of eight public documents. The author has merged the listings to organize it geographically. The sources of the lists are as follows:

H-1B. On the Labor Department’s website, right now, there are two overlapping lists of currently or recently debarred H-1B employers;¹² once the duplications have been eliminated, there are 62 listings, or 60 employers, since two of them apparently had two violations each. (These lists are updated frequently and the current ones may have changed slightly since the CIS research was completed.)

The recently released GAO report on this program indicated that nine of the 150 largest users of the H-1B program were listed as willful violators.¹³ Unfortunately, the names of the nine firms were not published, nor was the time period in which the 150 were identified. (This report is not to be confused with a different GAO report on H-2B workers described below.)

H-2A. The original list of six names is available at the DoL’s Office of Foreign Labor Certification website.¹⁴

H-2B. While we have not been able to locate a list of employers penalized by DoL in this program, there is a recent and highly useful GAO report on H-2B employers who have been involved in program-related civil and criminal proceedings in the federal courts.¹⁵ Ten case histories are printed in this report, but, unfortunately, the names of the employers are not shown. Since these employers, by definition, have or have had approved H-2B petitions, are listed by GAO by state (or multi-state locations in some instances), and are in the court records, investigators probably can identify them. We have made suggested identifications in all but two instances.

Three additional cases, one involving a Florida couple named Barbugli (H-2B), one located largely in Iowa (H-1A), and one on Guam with 124 indictments (H-2B), were identified in press releases from the Department of Homeland Security.

The GAO report on the H-2B program is particularly helpful because it cites not only horror stories about the abuse of program participants, but also points out that many of the employers, despite their court records, continued to secure H-2B workers from the government, as well as, in some cases, ongoing flows of government funds.

Permanent Certifications. That list, of four names, is also hosted by DoL’s Office of Foreign Labor Certification.¹⁶

In the list below, each of the penalized employers is identified by the immigration program involved, and the specific government citation is shown. In cases where we found other evidence, such as press releases or court records, that is noted as well. The latter references are to the Federal Courts’ electronic records system, PACER. In many cases there are other PACER files for the firms listed but unless the court action seemed pertinent to the debarring, they are not noted in the following list.

In some instances, names of individual employers or owners have been printed in the public records, and are shown here as well; in a few instances we encountered evidence of bankruptcy filings, and have so noted them.

Readers with questions about items on the list may contact the author at snrascal@yahoo.com.

Employers of Foreign Workers Penalized by the Federal Government

(Compiled from federal documents by the Center for Immigration Studies, January 2011)

End Notes

¹ Calculated from Statistical Abstract of the United States: 2010, Tables 8 and 337.

² For more background on these programs, see, for instance (on the H-2A program), Importing Poverty: Immigration and the Changing Face of Rural America, New Haven: Yale University Press, 2009, by Philip Martin of UC-Davis, and for excerpts from it, see http://www.magicvalley.com/news/opinion/editorial/article_6acfa50e5d935e... regarding the H-1B program, for instance, see Norm Matloff’s (also of UC-Davis) CIS Backgrounder “H-1Bs: Still Not the Best and the Brightest,” at http://www.cis.org/h1bs_not_best.html; and regarding the H-2B program, see David Seminara’s CIS Backgrounder “Dirty Work: In-Sourcing American Jobs with H-2B Guestworkers,” at http://www.cis.org/h2bguestworkers.

³ “H-2B Visa Program: Closed Civil and Criminal Cases Illustrate Instances of H-2B Workers Being Targets of Fraud and Abuse,” GAO-10-1053, Government Accountability Office, September 2010, http://www.gao.gov/new.items/d101053.pdf.

⁴ “H-1B Visa Program: Reforms Are Needed to Minimize the Risks and Costs of Current Program,” Government Accountability Office, January 2011, p. 19, http://www.gao.gov/new.items/d1126.pdf. This GAO report is not to be confused with the report on the H-2B program mentioned in the text.

⁵ 2009 Annual Report, Washington, D.C.: Department of Labor, Office of Foreign Labor Certification, 2010, p. 30.

⁶ There is no readily available count of H-2A employers, as opposed to applications submitted and approved for employers, a different concept. Presumably some employers file more than a single application, and thus the 1/1,278 ratio may be marginally too high as it relates to employers.

⁷ <2009 Annual report,Department of Labor op. cit., p. 32.

⁸ Calculated from Department of Homeland Security, Office of Immigration Statistics 2009 Yearbook of Immigration Statistics, Table 7.

⁹ http://www.ice.gov/news/releases/0902/090212desmoines.htm.

¹⁰ https://www.epls.gov/epls/search.do.

¹¹ See, for instance, http://www.uscis.gov/USCIS/Laws/Memoranda/Static_Files_Memoranda/2009/or....

¹² See http://www.dol.gov/whd/immigration/H1BDebarment.htm and http://www.dol.gov/whd/immigration/H1BWillfulViolator.htm.

¹³ GAO op. cit., p. 97. This is in the H-1B report.

¹⁴ http://www.foreignlaborcert.doleta.gov/pdf/Debartment_List_Revisions.pdf.

¹⁵ http://www.gao.gov/new.items/d101053.pdf.

¹⁶ http://www.foreignlaborcert.doleta.gov/pdf/Debartment_List_Revisions.pdf.