Fraud, corruption and willful violations found in the H-1B Program. Changes and increased scrutiny to the program inevitable. H-1B Employers beware.
October 15, 2008

An internal report by the U.S. Citizenship and Immigration Services (USCIS) reviewing the H-1B program has found evidence of forged documents, fake degrees, fake job locations, illegitimate employers and businesses, "benching," underpayment of prevailing wages, and payment for visa and application fees by alien beneficiaries, among others.

The USCIS report, released last Wednesday, made available by U.S. Senator Chuck Grassley (R-Iowa) indicates that serious violations of the H-1B program are so common that one in every five H-1B cases involves fraud or some other "technical violations." Based on a random sample of 246 cases chosen from a pool of 100,000 cases, USCIS site visits, review of all documents submitted and interviews with H-1B employers and workers, USCIS found that twenty-one percent (21%) of the 246 reviewed cases contained either outright fraud or technical violations.

In some cases, investigators found fake information in applications or forged documents. In others, investigators discovered that some employers have not been paying the prevailing wages or had been "benching" employees when there was no work available, or had employees working on different jobs than the ones listed on the application. Investigators also found nonexistent employers or shell companies giving addresses of fake locations.

Following the release of the report, U.S. Senator Grassley sent a letter to the USCIS voicing his concerns and frustrations of fraud prevention and detection efforts in the adjudication process as well as questioning the government’s further steps in enforcement of the H-1B program. Among many issues raised in his letter, Senator Grassley was overly concerned with the use of phrase "technical violations" by the USCIS in regards to employers or alien beneficiaries who failed to comply with the law and called this blatant disregard for the law hardly a "technical" violation.

In light of the report, it is expected that significant changes and close scrutiny of the H-1B program leading to RFEs and adjudication delays in the future are inevitable. Already H-1B petitions, whether initial or extensions, have been lately experiencing increased number of RFEs and it is likely that the release of the report may cause further delays. The USCIS has already been demanding lately loads of documents and photographs in their RFEs, especially for consulting companies.

USCIS is considering various reforms to the H-1B program. Some reforms include use of independent open-source data to obtain information about the alien beneficiaries or H-1B employers, checking petitioning companies against commercially available records to make sure that they are legitimate businesses. USCIS wants to also implement risk assessment program based on objective criteria relating to fraud indicators to enable the USCIS to give greater scrutiny to H-1B petitions that raise flags during the review process. USCIS is also considering modifying H-1B evidentiary requirements and revising forms used when filing applications. None of these are final yet.

Additionally to the USCIS reform plans, the DOL is also scheduled to launch this January, a new H-1B Labor Condition Application form, ETA 9035E, focusing on the 'employer' and 'representative' accounts that are capable to cross-check of records among not only all H-1B Labor Condition Applications filed by the same employer and the same representatives but also PERM application data filed by the same employer and the same representatives. It is not clear whether the USCIS and the DOL will be able to share information on filing of petitions and applications by the same employer, representative, and the alien with the USCIS based on the "account" system. However, this may indeed happen in light of this report and electronic filing of petitions and applications using account systems for each employer, each representative, and each alien beneficiary is highly likely.

For more information of how this may affect you and your business, or if you have any questions or need more information, please feel free to call us.