Labor Department Alleged $20 Billion in H-1B Visa Fraud
Employers using H-1B and foreign-labor programs should prepare for heightened scrutiny of recruitment records.
Updated on Sept. 23, 2026 in Employment
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The U.S. Department of Labor Office of Inspector General has alleged $20 billion in fraud across H-1B visa and foreign-labor programs. The investigation involves allegations of fraudulent applications, kickbacks, and improper wage arrangements.
Why it matters
The investigation aims to bolster protections for domestic workers, signaling a shift that will likely increase regulatory scrutiny for businesses utilizing foreign-worker sponsorship. Operators should anticipate more rigorous audits of employment records and physical site operations.
The Inspector General identified $20 billion in suspected fraud within H-1B and foreign-labor programs. One single Dallas office location was tied to over 500 approved H-1B petitions.
The players
Department of Labor
A federal executive department responsible for occupational safety, wage and hour standards, and enforcement of labor law.
Cognizant
A multinational IT services and consulting company that provides digital, technology, and operations services.
Cloudera
A hybrid data cloud company providing an enterprise data platform for analytics and machine learning.
The details
Federal investigators have shifted to physical workplace inspections to verify the legitimacy of sponsorship claims, including visiting locations in Dallas to confirm business activity. The probe is specifically reviewing potential kickbacks and wage arrangement discrepancies within the hiring process. In response to the findings, the Department of Labor has moved to suspend PERM filings for specific entities including Cognizant and Cloudera.
Timeline
August 2026: Investigators conducted physical workplace inspections in Dallas.
September 2026: Inspector General D'Esposito announced the federal fraud investigation.
Market Landscape
This enforcement action marks a significant shift in the oversight of the PERM labor certification process. It follows a pattern of heightened federal intervention aimed at curbing potential abuse in foreign-worker sponsorship programs.
Businesses should proactively audit their foreign-labor recruitment records and physical workplace documentation to ensure full compliance. Expect increased site visits and more rigorous verification of sponsorship petitions during the coming months.
The takeaway
The investigation highlights that regulatory risk now extends to the physical viability of the office locations listed on labor petitions. Review your current H-1B petition filings and maintain precise documentation for all foreign labor-broker activities to mitigate future audit exposure.
Further reading
For more on evolving workforce regulations, visit the Employment section.
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Should the federal government increase scrutiny of H-1B visa programs to better protect U.S. workers?
