The US Department of Justice charged two executives of Silicon Valley engineering company PerfectVIPs with fraud in a $7 million H-1B visa scheme, the US Attorney’s Office announced. The indictment alleges that from 2011 through April 2017, Namrata Patnaik and Kartiki Parekh submitted fraudulent H-1B visa applications for temporary nonimmigrant workers and that Patnaik later laundered the proceeds of the visa fraud.

It alleges the workers were not working for PerfectVIPs, but rather assigned out to other employers, creating an unfair advantage over staffing firms.

An attorney for the defendants disputes the allegations, telling SIA that Patnaik and Parekh followed H-1B policies and properly notified the government when engineers moved from one location to another.

According to the indictment, Patnaik and Parekh submitted approximately 85 fraudulent H-1B visa applications that stated the foreign workers would be employed by PerfectVIPs to work on PerfectVIPs’ in-house contracts and projects at PerfectVIPs’ office locations. However, the indictment alleges that once the applications were approved, Patnaik and Parekh instead created a pool of H-1B workers that were placed at employment positions with other employers, not with PerfectVIPs, providing the company with an unfair and illegal advantage over staffing firms.

Headquartered in San Jose, California, PerfectVIPs was incorporated in 2010 as a computer chip design product and services company; Patnaik acted as CEO and Parekh as the company’s human resources manager.

The indictment alleges that the other employers paid fees of nearly $7 million to PerfectVIPs to cover the cost of the H-1B workers’ wages and salaries as well as a profit markup for PerfectVIPs.

Chris Cannon of law firm Sugarman & Cannon in San Francisco, an attorney for Patnaik and Parekh, told SIA they will fight the H-1B visa fraud charges and that the company followed the H-1B policies and properly notified the government when engineers moved from one location to another. He said although the workers in question were performing services off-site, the workers in questions were working for PerfectVIPs, providing chip verification services the company had previously contracted to provide.

“My clients are being charged with providing inaccurate information in response to questions which USCIS admits they did not have the authority to ask,” Cannon said. “Their responses were truthful. My clients explained to USCIS when the job location changed. Nobody was trying to defraud anyone here. My clients were providing excellent services to their customers and bringing needed engineering talent to Silicon Valley.”

The federal indictment charges both Patnaik and Parekh with one count of conspiracy to commit visa fraud. It also charges Patnaik with one count of money laundering. They made their initial appearances in San Jose federal court on Feb. 11 and both were ordered to appear in US District Court in San Jose on April 12.