The H-1B Benefit Fraud and Compliance Assessment (BFCA) report, drafted by the Office of Fraud Detection and National Security (FDNS) and the United States Citizenship and Immigration Services (USCIS), and released this month found that 20.7 percent of the H-1B visa applications contained fraudulent information or technical violations of federal laws and regulations.

The Report and its findings:

The report, which aims to identify areas of potential change needed to address vulnerabilities in the H1B program, found that 13.4 percent of petitions filed for H-1B visas on behalf of employers petitioning for a beneficiary to come to the U.S. as an H-1B nonimmigrant worker to perform services in a specialty occupation were fraudulent, meaning, the H-1B application contained willful misrepresentation, falsification, or omission of a material fact.” The report found another 7.3 percent contained some sort of technical violation, which means that although there was no evidence of willful fraud, there was “evidence that the employer or alien beneficiary failed to comply with applicable laws and regulations.”

Although, the report’s fraud and technical violations estimates are based on a small random sample size study of 246 cases, out of a total of 95,827 H-1B applications, filed between October 2005 and March 2006, the USCIS, estimates a 95 percent confidence level and a margin error of plus or minus 5 percent.

Misrepresentations uncovered:

The most common misrepresentations, categorized as either fraud or technical violations, and uncovered during site visits to the companies that filed H-1B visas were:

• Forged signatures, fraudulent degrees;
• Failure by employers to pay the beneficiary “prevailing wages”;
• Non-existent job locations and/or H-1B petitions filed by shell companies;
• “Benching” or placing the beneficiary in non-productive status without pay;
• Charging back to the beneficiary the filing fees the employer was obligated to pay;
• Job duties significantly different from the position described in the H-1B application;

The most blatant misrepresentation cited by the report was that of an IT professional described as a “Business Development Analyst” working in a Laundromat.

Analysis and Implications for Employers:

Although, the program contains numerous provisions that are intended to protect U.S. workers and the majority of the employers abide by the federal laws and regulations, abuse by a small number of employers and beneficiaries, is likely to lead to increasing enforcement and procedural changes in the H-1B program. Employers can generally expect to see:

·         Greater oversight and stricter standards in the H-1B program;

·         More scrutiny, including a risk-assessment program in place, for employers that fall in a class with a perceived higher rate of fraud;

·         Reforms in place, including use of the “independent open-source data” or third-party information sources to verify information about the beneficiaries and employers filing for the H-1B visas;

·         Revision of the current H-1B application forms and a possible modification of the H-1B evidentiary requirements.

Hanishi Ali is an immigration attorney at Mithras Law Group, a greater Boston based immigration and international business law firm, which focuses on US and UK employment based Immigration law. Hanishi can be reached at 617-500-3233 or at www.mithraslaw.com.

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