Multiple remote or work from home jobs on H1B status

Bob Esty

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I have been thinking of below scenario for some time, let's call someone as Mr.X.

Mr.X is on H1B status with Company A. Company A pays Mr.X regular monthly salary, as standard H1B Employer/Employee relationship.
Mr.X actually works as a Contractor for an end client, let's say End Client 1, who pays on hourly rate basis
to Company A. Then Company A pays Mr.X a monthly regular salary after payroll processing.

Due to Covid, Mr.X has been working from home for End Client 1. Now Mr.X starts to work remotely on another contract job, also on hourly rate basis for another end client, let's say End Client 2. Mr.X is working in parallel jobs from 9am to 5pm for both end clients and submitting 2 weekly timesheets for same 40 hours (Monday to Friday 9am to 5pm) to both end clients. So he is getting paid twice, for the same 40 hours time per week.

For clarity, let us assume,
1. This is not Concurrent H1B case.
2. Mr.X has not informed either end client and he did not sign any conflict of interest, non-compete, non-disclosure agreements, etc.
3. There are no LCA updates as these 2 jobs are remote/work from home and approved H1B status is based in the worker's resident state.

Company A is getting pay from both end clients, but Company A is paying the 'extra' income from Mr.X's 2nd job in the form of bonus and not as monthly salary.This could be for various reasons like to reduce taxes or misrepresent the extra income to avoid any alerts to authorities, whatever be the reason.

To add to this scenario, what if one of the end client is a Government or Government affiliated organization?

I think this is unethical, fraud/crime and theft of money, time from either one or the other end client by Mr.X 
and his employer is co-operating with Mr.X by doing their part.
My underlying base assumption/understanding is, if a client is paying Mr.X per hour of time, he is supposed to work for that client only for that hour and if he need to work on another contractor job he has to make arrangement without overlapping times, like 9am to 5pm on first job and 6pm to 2am or whatever non-overlapping time on 2nd job.

Is Mr.X and his Employer doing anything illegal/fraud in this case? If yes, could this be reported and to whom?

How would this same scenario apply to someone on Green Card or Citizen status?

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