The two top executives of a Santa Clara software development company were charged this week in federal court in San Jose with visa fraud and conspiracy to commit visa fraud.

Elangovan Punniakoti, 52, CEO of Innovate Solutions and Mary Christeena, 47, president of Innovate Solutions, a technology services company founded in Cupertino in 2008 and currently headquartered in Santa Clara, appeared in federal court on April 12 to face the federal indictments. Punniakoti and Christeena are Cupertino residents.

U.S. Attorney Stephanie M. Hinds said the indictments followed investigations by the Department of State’s Diplomatic Security Service, Homeland Security and the Citizenship and Immigration Service’s Office of Fraud Detection and National Security.

According to the indictment, Innovate Solutions, Inc. in Santa Clara County was incorporated in 2008 as an information technology services company.

The indictment charges that from 2010 through May 2020, Punniakoti and Christeena repeatedly submitted fraudulent H-1B visa applications for foreign workers sponsored by Innovate Solutions.  H-1B visas are issued through the U.S. government’s H-1B Specialty Occupation Workers program.  With an H-1B visa, a sponsoring employer can employ a foreign worker in the United States on a temporary, nonimmigrant basis in a “specialty occupation.”

During the period of Punniakoti’s and Christeena’s conspiracy, the indictment alleges, the other employers paid fees of more than $2.5 million to Innovate Solutions to cover the cost of the H-1B workers’ wages and salaries as well as a profit markup for Innovate Solutions.

The federal indictment charges both Punniakoti and Christeena with one count of conspiracy to commit visa fraud and six counts of visa fraud.  The maximum statutory imprisonment sentence for the conspiracy charge is 5 years in prison.  The maximum statutory imprisonment sentence for each visa fraud violation is 10 years.  Each of the charged statutes also carries a maximum statutory fine of $250,000 or twice the gross gain or loss amount.

A specialty occupation requires the theoretical and practical application of a body of specialized knowledge and requires the employee to have a bachelor's degree or its equivalent in the relevant specialty.  Each employer seeking to obtain an H-1B visa to employ a nonimmigrant foreign worker is required to submit an application to the U.S. Department of Labor that, among other things, attests to labor conditions and describes the existence, duration, and wages of the temporary job. Said prosecutors.

A subsequent petition requires, among other information, biographical data of the proposed foreign worker and the address where the proposed foreign worker will be working for the sponsoring employer.

The indictment charges that Punniakoti and Christeena submitted approximately 54 fraudulent H-1B visa applications for temporary nonimmigrant workers sponsored by Innovate Solutions.  Each application required representations made under penalty of perjury as to the name, location, terms, and existence of the employment position for the sponsored nonimmigrant worker.

The indictment said that Punniakoti and Christeena submitted statements in the application process that the foreign workers would be working offsite at specific end-client companies.  The indictment charges that the identified end-client companies either never received the proposed foreign workers or never intended to receive those workers.

The indictment also charges that Punniakoti and Christeena submitted or caused to be submitted statements that a foreign worker would be working on an internal project for Innovate Solutions despite knowing that no such project existed.

Once the applications were approved, Punniakoti and Christeena created a pool of H-1B workers that were placed at employment positions with other employers that had actual work, not with the identified end-clients.  The practice provided Innovate Solutions with an unfair and illegal advantage over employment-staffing firms,  according to the federal indictment.

Punniakoti and Christeena were released from custody, pending their next scheduled appearance in federal court in San Jose on July 25.