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Whistleblower says automakers used non-work visas to bilk the US

On Behalf of | Sep 22, 2017 | False Claims Act

A former Tesla worker has filed a False Claims Act lawsuit claiming that Tesla, BMW, Volkswagen, Mercedes-Benz and other companies conspired to defraud the U.S. of tax revenue by bringing in foreign workers on non-work visas but having them work anyway — at wages far below market levels.

According to the lawsuit, these were workers hired by German auto parts manufacturer Eisenmann and a subcontractor, Vuzem. Many, including the plaintiff, were from Slovenia. They were employed building manufacturing plants for the automakers in various parts of the United States. Some were allegedly paid only $5 an hour, in violation of labor and immigration laws. They were brought into the U.S. on B-1 visas.

According to the U.S. Citizenship and Immigration Services, B-1 visas are intended for temporary business visitors who come to the U.S. for conferences, short-term training, contract negotiation and consultation with existing business associates. They are visitor visas; taking paid work in the U.S. is not authorized by the visa.

Using the B-1 visas effectively put the workers below the radar, since tax and labor authorities weren’t expecting the visa recipients to be working manual labor. Moreover, the lawsuit claims that the defendants intentionally concealed that they had B-1 visa holders working.

In addition to allowing the companies to hire cheap foreign labor, the lawsuit alleges that the scheme allowed them to avoid paying significant sums of money in taxes. It is these unpaid taxes that form the alleged fraud against the U.S. — and which the whistleblower may receive a portion of.

According to the Courthouse News Service, the U.S. Department of Labor has considered filing suit against Tesla and other manufacturers but has not done so yet. It may choose to intervene in the whistleblower’s lawsuit.

The whistleblower only discovered the problem with his visa when he was injured working on a Tesla plant. He settled his case for $550,000.

At the time of that settlement, Tesla’s CEO said he thought the man was being paid $55 per hour, not $5. “If [the plaintiff] or his colleagues were really being paid $5 an hour, that is totally unacceptable,” he added.

Tesla told the Courthouse News Service that it had not yet been served with the whistleblower lawsuit but noted that the company is no longer working with the German auto parts manufacturer, the subcontractor Vuzem, or any associated companies.