It absolutely does happen at the scale I'm describing because part of my job is trying to place guys from India on L-1 visas :) I try to be ethical about it (i.e. only bringing the actual team leaders who are acting at least somewhat in a management capacity) but I see some of my less-ethical competitors abusing the L-1 process to an astonishing degree for grunt-level QA and development resources. Also, you only need to prove the "managerial capacity" thing when the visa is initially issued; they're usually good for a few years and they don't check up on what you're doing after the first time.
And I'm not questioning the work that CIS does; I'm just saying that it's very, very difficult to say someone is not working in a managerial capacity based on false documentation. There's no way they can tell false documentation from real documentation. But for L-1 visas there is no salary parity requirement, only a requirement that the company cover all expenses for the employee while they are in the US. So the IT body shops take advantage of this, and it leads to entire divisions of large companies being laid off and replaced by cheap labor.
And I'm not questioning the work that CIS does; I'm just saying that it's very, very difficult to say someone is not working in a managerial capacity based on false documentation. There's no way they can tell false documentation from real documentation. But for L-1 visas there is no salary parity requirement, only a requirement that the company cover all expenses for the employee while they are in the US. So the IT body shops take advantage of this, and it leads to entire divisions of large companies being laid off and replaced by cheap labor.