An internal USCIS H-1B policy memo shows small, young companies are the target of USCIS efforts to ferret out fraudulent H-1B petitions.

AILA, through The Legal Action Center (LAC) of the American Immigration Council, obtained a copy of the memo and its H-1B fraud referral routing sheet this week following a hard-fought lawsuit against USCIS for access to the documents. In addition, it also obtained the USCIS H-1B fraud site investigation checklist used for employer site visits.

In this article, we provide some background on the fight AILA undertook against a resistant USCIS to get these documents as well as a critique the sufficiency of the criteria being used to flag potentially fraudulent H-1B petitions.

So, exactly what is USCIS doing and what does it not want the public to know about its H-1B fraud – related practices?

First a bit of background on the fight to get these documents from USCIS.


Immigration attorneys first became aware of USCIS’ new H-1B fraud detection policies and proceures in 2009 when USCIS accidentally included its internal H-1B fraud referral sheet in correspondence about an H-1B petition with an AILA (American Immigration Lawyers Association) member attorney. The AILA member forwarded a copy of this referral sheet to AILA, which AILA posted for its members’ information. Stamped in bold capitals across the bottom of the referral sheet was the warning:

“For official use only – do not release under FOIA.”

A short while later AILA suddenly took down the document, reporting that USCIS had requested AILA to do so. AILA then filed a request under the Freedom of Information Act (FOIA) to obtain this sheet along with USCIS operating procedures and other documents relating to H-1B petitions and fraud. After what it called “protracted litigation,” LAC on Friday finally obtained the documents it had requested as part of the lawsuit.

So what exactly doesn’t USCIS want the public to know?

The red flags on the referral sheet come from the results of a study on H-1B fraud, which USCIS published in September 2008 and on which we reported in our other article here. The characteristics of petitions with the highest rates of fraud as revealed in the report are now pulled for investigation.

USCIS did not want to disclose the memo and referral sheet, and apparently did not want the public to know what checklist- type factors USCIS has been using to screen H-1B companies for fraud.

Factors on Referral Sheet: Some Make Sense

According to the referral sheet, USCIS  has a two-part analysis for scrutinizing potential fraud.  As the first part of its analysis, USCIS reviews whether a company meets two of the following three criteria:

1) Gross annual income is less than $10 million

2) The company claims less than 25 employees

3) The company was established less than 10 years ago

According to USCIS’ memo, the application must be routed to the Center Fraud Detections Operations (the fraud investigation unit) if two of the three criteria above apply and — as a second part of the analysis– if one or more of the following red flags apply: (a) suspected fraud, (b) forged documents, or (c) non-existent business.  These red flags make sense, as they rely on information suggesting specific problems with the employer.

Factors on Referral Sheet: Some Are Harsh on Small Employers

However, there are other factors under the second part of USCIS’ analys that would also trigger a fraud referral: (d) inconsistencies between the job description and the employee’s qualifications, such as simply missing company addresses or phone numbers on the application; (e) company website information is inconsistent with petition information; and (e) experience letters without a signature.  These latter factors, and these types of missing information, could have been due to an innocent oversight by the preparer.

Per the memo’s guidance though, rather than receiving a simple follow up request from USCIS to obtain the  missing information, a small, young company may be routed to the fraud unit, which could result in processing delays and a time-consuming investigation, not to mention being labeled by the system as a potential fraudster.

In addition to those named above, other red flags listed on the USCIS H-1B fraud checklist include:

  • The employee’s worksite is different than the company’s location
  • Withdrawing or abandoning an application after an RFE
  • H-1B petitions being submitted by small companies for human resource, financial or manager jobs

The problem with these red flags is that they also reflect common business practices in the real world. For example, U.S. government statistics show that small firms with fewer than 20 employees make up about 76 percent of the employers in the United States. The fact that a characteristic of the healthy majority of employers in this country is now a red flag for a fraudulent petition is troublesome.

Similarly, these other typical and legitimate business practices will raise suspicions:

  • The employee’s worksite is different than the company’s location. For example, for IT consulting companies that place employees on site at their clients’ place of business, a common practice in any consulting field, would be a red flag.
  • Withdrawing or abandoning an application after an RFE. There are many legitimate business reasons an employer might withdraw or abandon the application. For example, it might decide a faster approach to getting work permission for its desired employee would be submit a new application for premium processing that proactively addresses the issues raised in the RFE rather than waiting for months for USCIS to get around to reviewing the RFE and adjudicating the petition.
  • H-1B petitions being submitted by small companies for human resource, financial or manager jobs. The USCIS fraud report published in September 2008 identified certain jobs as having the highest rate of H-1B fraud, so petitions by small companies for these jobs are now flagged: accounting, human resources, analysts and managers, including marketing research analysts, business analysts, financial analysts, managers for advertising, marketing, promotions, public relations and sales. The types of companies that will raise suspicions if they submit petitions for these types of full-time jobs include liquor stores, dry cleaners, gas stations, residential care facilities, convenience stores, donut shops, fast food restaurants, dental offices, 99-cent stores, and parking lots.

In our experience, H-1B abusers are just as likely to be larger companies than those targeted on USCIS’ referral sheet, with more than 25 employees and more than $10 million in gross income. There is only one item on the checklist that directly speaks to larger H-1B employers. Specifically, a company with multiple H-1B filings and DHS records that show “significant discrepancies” in the number of petitions filed in the past three years and the number of reported employees will raise suspicion. This red flag is presumably designed to pick up body shops – those employers who bring in dozens or even hundreds of H-1Bs as consultants and bench them until they find jobs on behalf of the company.

Although this red flag exists on the checklist, it is not clear from the sheet whether this lone checked box would trigger a deeper inquiry that would reveal the fraud by these large employers who flaunt the system. If not, then based on the checklist, unlike small companies, new companies that automatically get routed to the fraud investigation unit, the more egregious violators could slide through the system undetected.

USCIS needs to take a closer look at its checklist to be sure it will flag the right offenders, without unnecessarily impeding the legitimate employers from going about their business.

What does this heightened scrutiny mean to H-1B employees?

For legitimate H-1B employers and their employees, it means more time and effort responding to RFE’s and delays in visa approvals. In fact, it’s possible this new policy is behind the increase in RFE’s, and even outright denials without an RFE, recently being reported by immigration attorneys across the country. More investigations and more RFE’s mean more work for attorneys and clients and longer processing times for H-1B petitions.

On the other hand, for fraudulent H-1B employers who are smaller companies, and whose business model is built around abusing the H-1B system by bringing in employees on H-1B visas and benching them until they can find a project for the company, it means they are at heightened risk of getting caught and having their petitions denied.

For fraudulent H-1B employers who are larger than 25 employees and have gross annual income over $10 million, those companies are not as likely as smaller companies to be screened for fraud, despite larger companies’ fraud causing greater damage to workers and society.  Larger companies’ H-1B workers who are underpaid and exploited  are unlikely to be helped to the same extent by Federal enforcement efforts as are smaller companies’ exploited workers.  Larger companies’ H-1B workers may have to rely more on legal complaints and private enforcement of their rights than relying on proactive government auditing and correction of their large H-1B employers’ wrongful practices.

Additional Information

For more information about USCIS fraud detection programs, please see our other articles:

FDNS Explains the 3 Types of Site Visits It Conducts; Which One May Apply to You?

H-1B Fraud Detection Site Visits in Full Swing. What Should You Expect?


For information about H-1B Rights & Immigration Rights Attorneys Michael F. Brown and Vonda K. Vandaveer, please visit here.

This blog is authored by Employee and H-1B Rights Attorney Michael Brown, and Immigration Attorney Vonda K. Vandaveerof the law firm V.K. Vandaveer, P.L.L.C.

DISCLAIMER: The information in this article is NOT legal advice, nor does it establish an attorney-client relationship between you and the attorneys or law firms above. Legal advice often varies among situations. If you want legal advice for your specific circumstances, you must consult with an attorney.