H-1B Fraud Analysis

The USCIS has produced a fraud audit and compliance assessment report which aims to analyze the level of potential fraud, misrepresentation or lack of compliance in H-1B visa filings.

The Sample

To conduct the analysis, USCIS took a random sample of 246 H-1B petitions (out of a total of 96,827) which were filed, approved, or pending between October 1, 2005 and March 31, 2006. Although the sample is fairly small, according to the USCIS, the sample should be sufficient to provide a 95 percent confidence level, a margin of error 5 percent and rate of occurrence of 20 percent.

Factors

The USCIS then reviewed each one of the 246 H-1B petitions for certain factors such as ability to pay the posted salary, existence of the employer, relationship between employer and beneficiary, adequate experience or beneficiary, existence of duplicate filings, discrepancies in filings and supporting paperwork and others.  Immigration officers reviewed each of the 246 H-1B petitions, visited the employment site and interviewed the employer.

The Results

In our opinion, the results are fairly striking.  USCIS reports that there were 51 cases (21%) that were confirmed as representing fraud, a technical violation, and/or multiple technical violations.  USCIS has stressed, however, that not all of these 51 violations would rise to the level sufficient for criminal prosecution.  The 51 cases are broken down as follows: fraud – 33 cases, or 13.4% and technical violations – 18 cases, or 7.3%.

Upon further review, it appeared that 19% of the H-1Bs which were already reviewed and approved by USCIS turned out to involve fraud.   Out of the premium processing cases pending or approved, 17% involved fraud.

Most Common Problems

The most common problems, either in terms of fraud or technical problems, are listed below.  This should serve as a helpful checklist for anybody who files H-1B petitions.

• job location not listed on the I-129 petition and on the LCA (55% of all violations);
• beneficiary not receiving the prevailing wage or being “benched” (27% of all violations);
• fraudulent or forged documents (20% of all violations);
• shell business/no bona fide offer of employment (14% of all violations);
• job duties significantly different from position description on LCA and I-129 petition (12% of all violations);
• misrepresentation of H-1B status by beneficiary (6% of all violations); and
• beneficiary paid the ACWIA fraud prevention fee (6% of all violations).

Our Thoughts

While we were somewhat surprised by some of the numbers in the USCIS report, it seems that USCIS will start focusing on those areas identified in the report.  Any legal practitioner who routinely files H-1B petitions should be aware of the problem areas identified in the report, but we are also somewhat surprised by the level of violations deemed to be fraud – 14% of all H-1B petitions reviewed in this study.  While 80% of the fraud or technical violations were uncovered during a site visit, it is important to understand that H-1B adjudicators will certainly focus on the problem areas identified in the report.