8/7. Information technology (IT) companies, and the groups that represent them, continue to lobby the Congress for legislation to increase the annual quota of H1B visas.

Their efforts in the 110th Congress to obtain an increase in the current cap of 65,000 visas per year have not yet been successful.

On July 28, 2008, the U.S. filed a criminal complaint against Alexander Vista, who is alleged to have engaged in a long running, large scale and fraudulent H1B visa application scheme.

This complaint sites and relies upon a report written by the Center for Immigration Studies (CIS) that argues that a "significant percentage" of H1B visas are given to people who "enter the illegal alien pool".

Also, the Department of Labor's (DOL) Office of the Inspector General (OIG) submits semiannual reports to the Congress. These contain information about prosecutions. These reports disclose that the U.S. has obtained several convictions per year against persons who have engaged in large scale H1B visa fraud.

The Vista case, other recent cases, and the CIS report offer evidence in support of the proposition that the problem that IT companies face in obtaining highly skilled IT workers under the H1B visa program lies not in the size of the annual quota, but in the DOL's inability to grant H1B visas only to skilled workers who actually have the jobs stated in their visa applications.

H1B Visa Proponents. IT companies have been vigorously lobbying the Congress for over a decade for legislation to make it easier for them to employ aliens for high skill jobs through the H1B visa program.

For example, Bill Gates, Chairman of Microsoft, testified before the Senate Health, Education, Labor, and Pensions Committee on March 7, 2007. See, prepared testimony [14 pages in PDF], and story titled "Gates Advocates H1B Visas, Permanent R&D Tax Credit, Patent Reform, and STEM Education" in TLJ Daily E-Mail Alert No. 1,549, March 8, 2007.

He said that "we need to attract and retain the brightest, most talented people from around the world. This will not happen until we reform our immigration policies for highly skilled workers." Currently, said Gates, "America's immigration policies are driving away the world’s best and brightest precisely when we need them most."

He elaborated that "It makes no sense to tell well trained, highly skilled individuals -- many of whom are educated at our top colleges and universities -- that the United States does not welcome or value them. For too many foreign students and professionals, however, our immigration policies send precisely this message."

"Under the current system, the number of H1-B visas available runs out faster and faster each year. The current base cap of 65,000 is arbitrarily set and bears no relation to U.S. industry’s demand for skilled professionals."

He continued that "For Fiscal Year 2008, H-1Bs are expected to run out next month, the first month that it is possible to apply for them. This means that no new H-1B visas -- often the only visa category available to recruit critically needed professional workers – will be available for a nearly 18-month period. Moreover, this year, for the first time in the history of the program, the supply will run out before the year’s graduating students get their degrees. This means that U.S. employers will not be able to get H-1B visas for an entire crop of U.S. graduates. We are essentially asking top talent to leave the U.S."

Pending Legislation. Numerous bills have been filed in the 110th Congress in response to the pleas from IT companies. However, the 110th Congress has not yet increased the current cap of 65,000 per year.

For example, Sen. Jon Cornyn (R-TX) introduced S 1083 [LOC | WW], the "Securing Knowledge, Innovation, and Leadership Act of 2007", or "SKIL Act of 2007", on April 10, 2007. There has been no action on this bill in either the Senate Judiciary Committee (SJC) or the full Senate.

Rep. John Shadegg (R-AZ) introduced the companion bill in the House, HR 1930 [LOC | WW], on April 18, 2007. Neither the House Judiciary Committee (HJC), nor the full House, have taken any action on this bill.

The Cornyn bill would exempt from the H1B cap visas for any alien who has earned a master's or higher degree from an accredited U.S. university, or who has been awarded a medical specialty certification based on post-doctoral training and experience in the U.S. It would also provide for a 20% increase in the H1B cap if the quota for the prior year was met.

Sen. Cornyn stated on April 10, 2007, that "our immigration policies prohibit us from retaining some of the ``best and brightest´´ students currently graduating from U.S. colleges and universities -- especially those with advanced degrees in science and technology. We also continue to lose highly qualified and highly skilled workers to foreign competitors because of our failed immigration system." See, Congressional Record, April 10, 2007, at Page S4310.

Sen. Cornyn also introduced a similar bill in the 109th Congress, S 2691, also titled "Skil Act". See, story titled "Sen. Cornyn Introduces SKIL Act" in TLJ Daily E-Mail Alert No. 1,366, May 9, 2006.

More recently, Rep. Gabrielle Giffords (D-AZ) introduced HR 5630 [LOC | WW], the "Innovation Employment Act" on March 13, 2008. There has been no action on this bill either. Her bill would, among other things, raise the H1B cap from 65,000 to 130,000 starting in FY2008.

There are numerous other bills pending in the House or Senate that would increase the annual cap, address fraud in the H1B visa program, and/or make other changes to current law. See for example:

• S 31 [ LOC | WW], the "H-1B Visa Fraud Prevention Act of 2007", introduced by Sen. Susan Collins (R-ME).
• S 1092 [LOC | WW], the "High-Tech Worker Relief Act of 2007", Sen. Chuck Hagel (R-NE).
• S 1351 [LOC | WW], the "H-1B Visa Program Modernization Act of 2007", Sen. Judd Gregg (R-NH)
• S 1397 [LOC | WW], the "Skilled Worker Immigration and Fairness Act", Sen. Joe Lieberman (D-CT).
• S 2839 [LOC | WW], the "Global Competitiveness Act of 2008", Sen. Jon Cornyn (R-TX).
• HR 1758 [LOC | WW], an untitled bill, Rep. David Wu (D-OR).
• HR 2538 [LOC | WW], the "Defend the American Dream Act of 2007 ", Rep. Bill Pascrell (D-NJ).
• HR 3194 [LOC | WW], the "H1B Strengthening Anti-Fraud Effectiveness Act" or "H1B SAFE Act", Rep. Tom Feeney (R-FL).
• HR 5726 [LOC | WW], an untitled bill, Rep. Brian Baird (D-WA).
• HR 5642 [LOC | WW], the "Strengthening United States Technology And Innovation Now Act", or "Sustain Act", Rep. Lamar Smith (R-TX)

Also, large comprehensive immigration reform bills have provisions related to H1B visas.

H1B Visa Critics. Much of the organized opposition in Washington DC to increasing caps on H1B visas has come from labor unions. Much of the online criticism of H1B visas has been posted by U.S. citizens who understand that they have lost, and/or not been hired for, IT jobs because of foreign IT workers with H1B visas.

In June, the Center for Immigration Studies (CIS) published a paper, which is relied upon by the government in the Vista complaint, titled "H-1B Visa Numbers: No Relationship to Economic Need". Its author is the CIS's John Miano.

It argues that "there is a discrepancy between H-1B visa numbers and job creation. There are more H-1B visas approved for engineers than there are engineering jobs. The number of H-1B visas for computer workers is about 70-80 percent of the rate of job creation. It is inconceivable that H-1B computer workers are taking anywhere close to that percentage of jobs being created."

It then states that "The most likely reason for the discrepancy between job growth and H-1B visas is that a significant percentage of people legally admitted under H-1B visas enter the illegal alien pool. Such illegal aliens would be armed with valid Social Security numbers and would be difficult to detect. The high concentration of visa-to-job discrepancies in certain states suggests that the country has created organized centers for importing illegal aliens through H-1B visas."

The report contains data suggesting such a discrepancy for three states, California, Georgia, and New Jersey. Vista operated in California.

The CIS is opposed to all immigration. The head of the CIS is Mark Krikorian. He is the author of the book [Amazon] titled "The New Case Against Immigration: Both Legal and Illegal", published earlier this year.

U.S. v. Vista. On July 28, the U.S. charged Alexander Sales Vista by criminal complaint with violation of 18 U.S.C. § 1546, in connection with his alleged making of false statements on Department of Labor (DOL) forms titled "Petition for a Nonimmigrant Worker".

Section 1546 provides, in part, that "Whoever knowingly makes under oath ... any false statement with respect to a material fact in any application, affidavit, or other document required by the immigration laws or regulations prescribed thereunder, or knowingly presents any such application, affidavit, or other document which contains any such false statement or which fails to contain any reasonable basis in law or fact ... Shall be fined ... or imprisoned ... or both."

The complaint alleges that Vista, in return for payments of from $7,000 to $12,000, filed about 977 fraudulent applications for H1B visas in just over ten years. The complaint adds that he then would charge persons who obtained H1B visas for "tax payments", which he sometimes, but not always, paid to the government as taxes. It concludes that he made at least $4.9 Million from this fraudulent scheme.

The complaint states that of Vista's about 977 employment based visa applications, "183 were approved, 370 were denied for fraud, 98 were rejected, and 326 were abandoned, withdrawn, or otherwise not granted".

The complaint is dated July 28, 2008. The Office of the U.S. Attorney for the Central District of California (OUSA-CDCal) stated in a release that federal agents arrested Vista on July 31.

The complaint is signed by Aron Klaff, a Special Agent with the DOL's OIG's Office of Labor Racketeering and Fraud Investigations.

The complaint alleges that "Fraud is a common problem in the employment-based visa program. For example, a recent June 2008 Bulletin by the Center for Immigration Studies in Washington DC reports that the number of approved H1-B work visas in the United States greatly exceeds the economic demand for such workers and concludes that the visa-to-job discrepancy suggests that H1-B visas are being used to facilitate illegal immigration."

It further alleges that "employment-based visa fraud usually follows recognizable patterns, specifically:
  a. Fraudulent petitioners commonly invent petitioning companies or employers from whole cloth, and investigation will reveal that the petitioning employer does not exist.
  b. Alternately, fraudulent petitions may list an actual employer's name and location in an employment -based petition but the petitioner will have no intention that the beneficiary alien will ever actually be employed by the listed employer. On some occasions, the listed employer is complicit in the application; on other occasions, the petitioner uses the employer's name without the employer's knowledge.
  c. Fraudulent petitioners also commonly misrepresent the nature of the job available, the wages available, location of the job, and the qualifications of the beneficiary alien in order to influence approval of employment-based petitions by U.S. labor and immigration authorities."

The 100 page complaint details Vista's companies, and the persons for whom he obtained H1B visas. It alleges that many of his "companies are mere shell companies that do not function as employers or that such companies could not possibly have employed the number of alien beneficiaries on whose behalf VISTA filed employment-based petitions for such companies."

It details, on a worker by worker basis, many examples of persons who obtained visas to work as accountants, or other skilled jobs, but did not then work in the position listed in the petition for the visa.

U.S. Attorney Thomas O'Brien stated in the USAO release that "This type of immigration fraud wholly undermines a system that was carefully designed to allow workers to come to the U.S. because their particular skills are needed in our market".

Criminal Prosecution of H1B Visa Fraud. A review DOL/OIG reports to the Congress suggest that there are at least several successful prosecutions per year involving H1B fraud. In addition, these reports sometimes identify other cases involving employment based visa fraud, without stating if H1B visas were involved.

For example, the DOL/OIG's Semiannual Report to Congress [54 pages in PDF] for October 1, 2007 through March 31, 2008 lists one H1B visa fraud case, against Paul Svejda. The report states that Svejda, who has been convicted and sentenced, "set up more than 100 shell companies to file a variety of fraudulent nonimmigrant visa applications, including labor condition applications and visa petitions for H-1B workers; L-1A (intracompany transferee) visa petitions; and E-2 (investor) visa petitions on behalf of his foreign clients. He charged these undocumented aliens between $5,000 and $20,000 for the visas ..." That case is U.S. v. Paul Svejda, U.S. District Court (MDFl).

The DOL/OIG's Report for October 1, 2006 through March 31, 2007, identifies one H1B visa fraud case, against Yongping Liu and Yali Huang. The report states that Huang, an attorney who has been convicted, "conspired with U.S. company owners to make offers of employment to Chinese citizens that allowed them to obtain immigration benefits in the United States. She made payments to these company owners for their sponsorship of the Chinese citizens. In addition, Huang created companies and in some cases used her own residential address as the location for the sham employing company. Her fees for processing fraudulent visa applications ranged from $5,000 to $140,000." That case is U.S. v. Liu, et al., U.S. District Court (SDTex).

The cases described in these and earlier reports reveal several patterns. The U.S. prosecutes those who prepare fraudulent applications, rather than the aliens. The defendants engage in fraud on a large scale -- usually hundreds of applications before being prosecuted. The fees are substantial. Many of the defendants are attorneys.

These reports also state that the DOL's role in the certification process is "perfunctory".

8/5. On August 5, 2008, Attorney General Michael Mukasey and other government officials announced a series of criminal prosecutions that the Department of Justice (DOJ) states is the "largest hacking and identity theft case ever prosecuted" by the DOJ. See, DOJ release.

On August 5 a grand jury of the U.S. District Court (DMass) returned an indictment that charges Albert Gonzalez with computer fraud, wire fraud, access device fraud, aggravated identity theft and conspiracy in connection with his participation in a scheme to obtain the credit and debit card numbers by wardriving and hacking into the wireless computer networks of major retailers, including TJX Companies, BJ’s Wholesale Club, OfficeMax, Boston Market, Barnes & Noble, Sports Authority, Forever 21 and DSW.

The DOJ also charged Christopher Scott and Damon Patrick Toey by criminal information.

The DOJ release adds that "Once inside the networks, they installed ``sniffer´´ programs that would capture card numbers, as well as password and account information, as they moved through the retailers’ credit and debit processing networks."

Also on August 5, the U.S. District Court (SDCal) unsealed an indictment previously returned by a grand jury of the District Court that charges Maksym Yastremskiy and Aleksandr Suvorov with crimes related to the sale of the stolen credit card data that Gonzalez and others illegally obtained.

The U.S. District Court (SDCal) also unsealed a third indictment that charges Hung-Ming Chiu, Zhi Zhi Wang and a third unknown defendant identified only as Delpiero with with conspiracy to possess unauthorized access devices, trafficking in unauthorized access devices, trafficking in counterfeit access devices, possession of unauthorized access devices, and aggravated identity theft.

The DOJ also charged Sergey Pavolvich, Dzmitry Burak, and Sergey Storchak by criminal information.

The DOJ release states that the indictment of Gonzalez "alleges that after they collected the data, the conspirators concealed the data in encrypted computer servers that they controlled in Eastern Europe and the United States. They allegedly sold some of the credit and debit card numbers, via the Internet, to other criminals in the United States and Eastern Europe. The stolen numbers were ``cashed out´´ by encoding card numbers on the magnetic strips of blank cards. The defendants then used these cards to withdraw tens of thousands of dollars at a time from ATMs. Gonzalez and others were allegedly able to conceal and launder their fraud proceeds by using anonymous Internet-based currencies both within the United States and abroad, and by channeling funds through bank accounts in Eastern Europe."

Gonzalez is in custody in the U.S. Yastremskiy is in custody in Turkey. Suvorov is in custody in Germany. The U.S. seeks extradition of both.

See also, DOJ document [PDF] titled "Fact Sheet: Department of Justice Efforts to Combat Cyber Crime".

The House will not meet.

The Senate will not meet.

CANCELLED. 1:00 PM. The Department of Health and Human Services' (DHHS) American Health Information Community's (AHIC) Electronic Health Records Workgroup may meet. AHIC meetings are often noticed, but cancelled. Location: Switzer Building, 330 C St., SW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) regarding competitive bidding procedures for Auction 85, regarding LPTV and TV Translator Digital Companion Channels. See, notice in the Federal Register, July 24, 2008, Vol. 73, No. 143, at Pages 43230-43235.

The Senate will meet at 11:00 AM in pro forma session only. These sessions prevent President Bush from making recess appointments.

10:00 AM. Deadline to submit comments to the Office of the U.S. Trade Representative (OUSTR) regarding its Special 301 Out of Cycle Review of Taiwan. This pertains to the adequacy and effectiveness of intellectual property protection and enforcement in Taiwan. See, notice in the Federal Register, July 21, 2008, Vol. 73, No. 140, at Pages 42378-42379.

TIME? The U.S. Patent and Trademark Office's (USPTO) Patent Public Advisory Committee (PPAC) will meet. Location:?

Day one of a two day conference hosted by the U.S. Patent and Trademark Office (USPTO) titled "13th Annual Independent Inventors Conference". See, USPTO release. Location: USPTO, Alexandria, VA.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) in response to its request for comments regarding information collected in Board of Patent Appeals and Interferences (BPAI) actions. See, notice in the Federal Register, June 9, 2008, Vol. 73, No. 111, at Pages 32559-32561.

Deadline to submit comments to the National Institute of Standards and Technology's (NIST) Computer Security Division (CSD) regarding its SP 800-124 [48 pages in PDF] titled "Guidelines on Cell Phone and PDA Security (Draft)".

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Second Further Notice of Proposed Rulemaking regarding post-reconfiguration 800 MHz band plans for the Puerto Rico region. See, notice in the Federal Register, July 14, 2008, Vol. 73, No. 135, at Pages 40274-40276.

Deadline to submit initial comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking (FNPRM) regarding assignment and administration of ten digit telephone numbers for internet based Telecommunications Relay Services (TRS). This item is FCC 08-151 in CG Docket No. 03-123 and WC Docket No. 05-196. See, notice in the Federal Register, July 18, 2008, Vol. 73, No. 139, at Pages 41307-41311.

Day two of a two day conference hosted by the U.S. Patent and Trademark Office (USPTO) titled "13th Annual Independent Inventors Conference". See, USPTO release. Location: USPTO, Alexandria, VA.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) in response to its notice of proposed rulemaking (NPRM) regarding revising the Trademark Rules of Practice to set forth the requirements for signature of documents filed in the USPTO, recognition of representatives, and establishing and changing the correspondence address in trademark cases. See, notice in the Federal Register, June 12, 2008, Vol. 73, No. 114, at Pages 33345-33356.

Deadline to submit comments to the U.S. Patent and Trademark Office (USPTO) in response to its notice of proposed rulemaking (NPRM) regarding amending the Trademark Rules of Practice to clarify certain requirements for applications, intent to use documents, amendments to classification, requests to divide, and Post Registration practice. See, notice in the Federal Register, June 12, 2008, Vol. 73, No. 114, at Pages 33356-33372.

Extended deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its further notice of proposed rule making (FNPRM) regarding service rules for licensed fixed and mobile services, including Advanced Wireless Services (AWS), in the 1915-1920 MHz, 1995-2000 MHz, 2155-2175 MHz, and 2175-2180 MHz bands. This FNPRM is FCC FCC 08-158 WT Docket Nos. 07-195 and 04-356. See, original notice in the Federal Register, June 25, 2008, Vol. 73, No. 123, at Pages 35995-36013, and notice of extension in the Federal Register, July 14, 2008, Vol. 73, No. 135, at Pages 40271-40272.

6:00 - 9:15 PM. Part one of a two part continuing legal education (CLE) seminar hosted by the DC Bar Association titled "Software Patent Primer: Acquisition, Exploitation, Enforcement, and Defense". The speakers will be Martin Zoltick (Rothwell Figg), Stephen Parker (Watchstone P&D), Brian Rosenbloom (Rothwell Figg), and David Temeles (Bean Kinney & Korman). The price to attend ranges from $105 to $160. For more information, call 202-626-3488. See, notice. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

The Federal Communications Commission (FCC) will commence Auction 78, the AWS-1 and Broadband PCS auction. See, Public Notice (DA 08-1090) and notice in the Federal Register, May 29, 2008, Vol. 73, No. 104, at Pages 30919-30938.

9:00 AM - 12:15 PM. The DC Bar Association will host a panel discussion titled "Legal Cybersleuth's Guide to Investigative Research". The speakers will be Carole Levitt and Mark Rosch (both of Internet For Lawyers). The price to attend ranges from $109 to $149. For more information, contact 202-626-3463. See, notice. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

6:00 - 9:15 PM. Part two of a two part continuing legal education (CLE) seminar hosted by the DC Bar Association titled "Software Patent Primer: Acquisition, Exploitation, Enforcement, and Defense". The speakers will be Martin Zoltick (Rothwell Figg), Stephen Parker (Watchstone P&D), Brian Rosenbloom (Rothwell Figg), and David Temeles (Bean Kinney & Korman). The price to attend ranges from $105 to $160. For more information, call 202-626-3488. See, notice. Location: DC Bar Conference Center, B-1 Level, 1250 H St., NW.

10:00 AM - 4:00 PM. The U.S.-China Economic and Security Review Commission will hold a public meeting to work on its 2008 Annual Report to Congress. See, notice in the Federal Register, July 29, 2008, Vol. 73, No. 146, at Pages 43978-43979. Location: Conference Room 333, Hall of the States, 444 North Capitol St., NW.

6:00 PM. Extended end of settlement period for the Federal Communications Commission's (FCC) Auction 85, regarding LPTV and TV Translator Digital Companion Channels. See, Public Notice [PDF] of extension of settlement period, and notice in the Federal Register, August 7, 2008, Vol. 73, No. 153, at Page 46005.

Deadline to file Petitions to Participate and the accompanying $150 filing fee with the Copyright Royalty Judges regarding its proceeding to determine the Phase I distribution of 2004 and 2005 royalties collected under the cable statutory license. See, notice in the Federal Register, July 15, 2008, Vol. 73, No. 136, at Pages 40623-40624.

Deadline to file a Petition to Participate and the accompanying $150 filing fee with the Copyright Royalty Judges in connection with its proceeding to determine the Phase I distribution of 2004 and 2005 royalties collected under the cable statutory license. See, notice in the Federal Register, July 15, 2008, Vol. 73, No. 136, at Pages 40623-40624.

8/6. Brian Benczkowski was named Chief of Staff to Attorney General Michael Mukasey, effective August 15, 2008. He is currently Chief of Staff to Deputy Attorney General Mark Filip. He will replace Brett Gerry, who will leave the Department of Justice (DOJ). See, DOJ release.

8/6. The U.S. Court of Appeals (3rdCir) issued an Order Amending Opinion [3 pages in PDF] in CBS v. FCC. This order does not affect the outcome or holding of the case. It revises several footnotes, and in particular, references to Action for Children’s Television v. FCC, 852 F.2d 1332 (D.C. Cir. 1988), and Action for Children’s Television v. FCC, 58 F.3d 654 (D.C. Cir. 1995). See, July 21, 2008, opinion [102 pages in PDF], and story titled "3rd Circuit Overturns FCC's Breast Broadcast Fine" in TLJ Daily E-Mail Alert No. 1,797, July 22, 2008. This case is CBS Corporation, et al. v. FCC and USA, U.S. Court of Appeals for the 3rd Circuit, App. Ct. No. 06-3575, a petition for review of a final orders of the FCC.

8/5. A grand jury of the U.S. District Court (EDVa) returned an indictment that charges John Kenneth Leighnor, Jr., with three counts of mail fraud and eight counts of aggravated identity theft in connection with his involvement "in an ongoing identity theft scheme that he coordinated from the Federal Correctional Institute in Petersburg, Virginia". See, release of the Office of the U.S. Attorney for the Eastern District of Virginia.

8/1. The Federal Communications Commission (FCC) adopted, but did not release, a Report and Order and Further Notice of Proposed Rulemaking regarding the collection regulatory fees. The FCC issued a short release, and four Commissioners wrote statements. See, statement of Michael Copps, statement of Jonathan Adelstein, statement of Deborah Tate, and statement of Robert McDowell. This item is FCC 08-182 in MD Docket No. 08-65.

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