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@smile , you are correct on both counts. Back in the day (just a few years ago) when H1B visas ran out in one day, these Indian "body shops" accounted for more than 50% of the volume YOY. You would think some smart people in Washington would figure this out and stop these nefarious activites by a few companies without bashing the entire H1B progam.
There's a modus vivendi between these large body shops and D.C. or perhaps between the corporate clients and D.C. And there's a reason they're called body shops: eight or nine Indians are crammed into tiny apartments -- perhaps they're not paid enough, or they're trying to save what they do make.