A California company and the American government cannot seem to agree on what the law says about H-1B.

PerfectVIPs chief executive officer Namrata Patnaik, 42, and human resources manager Kartiki Parekh, 56, have been accused of conspiracy to commit visa fraud. “The indictment charges that from 2011 through April 2017, Patnaik and Parekh submitted fraudulent H-1B visa applications for foreign workers sponsored by PerfectVIPs and that Patnaik later laundered the proceeds of the visa fraud,” the Department of Justice said on February 11.

During this six-year period, the San Jose-based semiconductor company founded in 2010 submitted approximately 85 fraudulent applications and laundered up to $1 million, the federal authority alleged.

H-1B fraud accusation

Under the H-1B, speciality occupation workers programme, the US customs and immigration services employer can temporarily employ a foreign worker in a “speciality occupation” to live and work in the US for up to six years. While applying, employers have to attest to labour market conditions and furnish granular details of the existence, duration, wages and location associated with the job.

The federal authority claims Patnaik and Parekh showed foreign workers as employed by PerfectVIPs to work on in-house contracts and projects at their own premises. However, once the applications were approved, they created a pool of H-1B workers to place in roles at other companies.

“This practice provided PerfectVIPs an unfair and illegal advantage over employment-staffing firms,” the Department of Justice said.

Employers apparently paid fees of nearly $7 million to PerfectVIPs, covering the cost of the H-1B workers’ wages and salaries as well as a profit markup for PerfectVIPs.

What’s next

Attorneys representing PerfectVIPs have called the government’s accusation “a misuse and misapplication of the complex H-1B visa laws”. They will fight the allegations.

“As with most jobs, sometimes employees work at the home office, and sometimes they work at sites designated by the client,” Cannon argued. “As long as the employee is paid Silicon Valley wages, the location of the job site does not matter.” And when a job site has moved, the company has followed protocol and notified the United States Citizenship and Immigration Services when moving employees from one location to another, he added.

Both parties could face a 10-year prison sentence for visa fraud if found guilty. Patnaik could get another 10 years in the money laundering case. Each of the charges also carries fines of hundreds of thousands of dollars.

This article first appeared on Quartz.