Court Endorses False Claims Act Theory For Business And Work Visas

• Published date: 08 March 2022
• Subject Matter: Immigration, Work Visas
• Law Firm: WilmerHale
• Author: Mr Stephen Jonas and Benjamin Conery

In a False Claims Act (FCA) case with implications for the use of business and work visas, the US District Court for the District of New Jersey refused on Tuesday to reconsider or allow an immediate appeal of its prior ruling that the knowingly improper use of less expensive visas when more expensive visas are appropriate may give rise to FCA liability.

The case, Jean-Claude Franchitti v. Cognizant Technology Solutions Corporation et al., involves allegations that foreign employees of Cognizant, a technology services provider, traveled to the United States on B-1 and L-1 visas when the work they were performing required the company to obtain more expensive H-1B visas. The plaintiff, a former assistant vice president for Cognizant, claims the company perpetrated this alleged fraud by submitting visa petitions with false invitation letters attesting to the managerial responsibilities or special skills required for L-1 visa holders and used employees with L-1 visas or B-1 visas, which are for short-term business trips, to perform work that should legally have been performed by H-1B visa holders. The plaintiff argues this amounts to a reverse false claim, which is codified in 31 USC ' 3729(a)(1)(G) and occurs when a defendant knowingly makes a false statement to avoid paying an obligation to the government (e.g., misstatements regarding the nature of B-1 and/or L-1 visa holders' activities to avoid paying the higher fees associated with H-1B visas).

In August, the court declined to dismiss these claims, finding that Cognizant arguably had an obligation to pay for higher fees associated with H-1B visas based on the type of work Cognizant's employees had undertaken. The court said the arrangement between Cognizant and the government could be characterized as an "implied contractual" or a "fee-based" relationship, both of which are part of the definition of "obligation" under the FCA, and that "[b]y 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 under [the FCA]."

Cognizant argued the court should reconsider its ruling on the motion to dismiss or certify the issue for interlocutory appeal because the court misinterpreted or ignored the opinions in other cases, including an earlier ruling from the US District Court for the Northern District of California in a substantively similar case in...