Withholding wage is different issue than non compete. So file a complaint with DOL. They cannot hold your money for any reason and will surely comply.
Since you were hired for the project as a contract to hire, you can easily argue if they sue because they agreed with the vendors to send you as a resource in bad faith. They had prior knowledge of clients expectations. Also checkout non-compete laws in VA and MA, it very hard for them to prove that you joining client will do them severe damages. Most Indian consultancies try to show you fear of lawsuit and instead ask for cash payments to drop the case. I would ignore all those threats unless you get served papers physically to you. Dont worry about big emails from their so-called lawyers. Email communication is not valid for legal purposes.