Here is what my friend who used to run a contracting house had to say about the above:
In case its not already obvious, Consultant Corp 1 (CC1 from here on) cannot hold him to any time-based contract. But they are right in that they can recover costs. Provided they are clearly specified in the contract (E.g: a clause that says "in case you leave the contract before completion of term, you agree to pay the following costs incurred by CC1 on your behalf: flight to the USA, H-1 legal and governmental fees, training costs" etc). Essentially, they have to be able to show a judge that (a) the contract laid these terms out and (b) the cost they are claiming can be proven. The judge will throw out any other claims (e.g lost future profits). Now, if CC1 has not spelled out the details in the contract, then your buddy is home free.
Typically, the way these things are done is that the interested employer negotiates a "buy out" deal with CC1 -- some lump sum cash payment to let the young lad jump ship. This is a safe(r) tack from your buddy's perspective since he can always claim to CC1 that he was unaware of the employer's interest. If your employer is unwilling to negotiate such a thing, then your buddy may have to pay the $5k-$10k out of his pocket.
If your buddy is willing to share the contract info, my friend is willing to look it over and give him his opinion. I would of course request both you and your buddy to drop any references to "shady" this or that in your communications with my friend!
Neither I nor my friend are lawyers (though he might pass your buddy's contract to his lawyer for his thoughts) and any advice we offer should be considered nothing more than opinion.
The reason why there are a large number of consulting shops in NJ (and in VA and CA) is that that is where a lot of contracting jobs are (NYC, USG contractors, etc).
--ravi