Kandi Srinivas Reddy, a Congress leader from Telangana’s Adilabad constituency, is accused of allegedly rigging the H-1B visa lottery system in the US. Reddy, who founded Cloud Big Data Technologies LLC in 2013, allegedly exploited the lottery system to secure over 300 H-1B visas since 2020.
Reddy, who describes himself as a “common farmer’s son”, earned a master’s degree from the US and worked as a technical consultant, eventually settling near Dallas.
Reddy’s company focused on finding tech workers who needed H-1B visas to stay in or move to the US, offering recruiters up to $8,000 per person, Bloomberg reported.
After obtaining H-1B visas, Reddy’s company will place these workers on contract with companies such as Meta Platforms Inc. and HSBC Holdings Plc.
According to their advertisements, the company took 20% to 30% of employees’ salaries, which could amount to $15,000 or more per year for each employee.
Fraud in staffing firms for H-1B visa
Many staffing firms, often called “body shops,” act more like visa brokers than employers.
Current and former staffing firm employees told Bloomberg that they charged workers money for visa applications, submitted false information, withheld wages and violated labor laws.
Complaining about these practices could jeopardize workers’ visas.
Most of the criminal charges for H-1B fraud in the past decade have been brought against staffing firms, though Reddy’s companies were not among them.
The ITServe Alliance, which represents staffing firms, calls these companies essential to the U.S. economy.
“Staffing companies are really the essential flexible force of the IT industry,” said Jonathan Wasden, the group’s general counsel. “Without them, you lose a lot of the dynamic nature of American business and the tech industry.”
During the Trump administration, the U.S. Citizenship and Immigration Services (USCIS) proposed changes to the H-1B lottery process, simplifying initial entry to a short online form and a $10 fee.
This resulted in multiple entries for the same employee by different companies, including Reddy’s, greatly increasing their chances of selection.
In the 2020 lottery, Reddy’s Cloud Big Data submitted the names of 288 employees, while other companies it controls submitted many more names, totaling more than 3,000 entries. These efforts have yielded more than 300 H-1B visas since 2020, with 54 granted in 2020 alone, more than any previous year.
Reddy’s claims and legal defence
In a brief telephone interview with Bloomberg, Reddy claimed he was merely a registered agent for these companies and had no major role in them.
However, he has made different claims elsewhere. He told Texas officials that he is the chief executive officer (CEO) of Cloud Big Data.
Documents filed with election authorities in India and business records in the US show that he or his wife owns or controls all of the companies, Bloomberg reported.
Additionally, while campaigning for public office in India last year, Reddy described himself as the founder and CEO of several staffing companies and claimed responsibility for employing hundreds of people.
Reddy’s attorney, Lucas Gerritsen, argued that USCIS had not followed proper procedures to restrict the activity and did not have evidence that Reddy’s companies had violated the rules.
Despite the allegations, Reddy appears to be successful, having set up a foundation to help farmers in India and launching his own media outlet.
Reddy also contested for the Legislative Assembly seat from Adilabad constituency in India but lost.
USCIS changes H-1B lottery system to prevent fraud
USCIS changed the lottery system to prevent multiple registrations by selecting unique individuals rather than employers’ entries. This reduced duplicate applications, but staffing firms continue to cheat the system by submitting names without actual jobs.
In 2022, Indians secured 77% of the 320,000 approved H-1B visas. This year, USCIS expects about 350,000 applicants, New measures against fraud led to a decrease,
Of the 759,000 registrations last year, more than 400,000 were repeat registrations.
By 2023, several other staffing firms had discovered the trick and taken control of the system. More than half of the entries in the lottery were from employees whose names were entered multiple times.
This fraudulent tactic proved effective. According to Bloomberg estimates, companies that used this multiple-registration strategy secured about 40,000 H-1B visas over four years.