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10/20/2008
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Government Study Finds 21% Of H-1B Applications Violate Rules

The government estimates that fraud, including below-market wages and filings by fake businesses, is present in 13,000 of the yearly H-1B petitions filed.

The U.S. government estimates that 21% of H-1B visa petitions are in violation of H-1B program rules -- ranging from technical violations to fraud -- based on the investigation of a representative sample.

A newly available report on the study, drafted by the Office of Fraud Detection and National Security, cites one of the most common violations as businesses that did not pay a "prevailing wage" to the H-1B beneficiary, meaning the going salary rate for a job in a specific market.

Other findings included nonexistent job locations, fraudulent and forged documents, and visa petitions (meaning applications) filed by nonexistent businesses. Companies typically apply for H-1B visas to hire professionals from India, Russia, and elsewhere to work on U.S. soil.

The report's estimates are based on a sample study of 246 cases, out of a total of 95,827 H-1B petitions, filed between October 2005 and March 2006. The sample cases included only those in which a business was looking to extend an existing H-1B visa for someone already in the United States, or hire someone under the H-1B program who came to the United States on a different visa. (The study excluded situations in which the visa beneficiary was still living abroad because of the complication of interviewing that person.)

Out of the 246 cases investigated, the government office determined that 51 cases, or 21%, were in violation of H-1B program rules. "When applying the overall violation rate of [21%] to the overall H-1B population, a total of approximately 20,000 petitions may have some type of fraud or technical violation," according to the report. Further extrapolation finds that 13,000 of those cases would represent acts of fraud, with the remaining 7,000 being less-severe technical violations, says the report.

Computer-related jobs represented 104 of the cases investigated. Among those, 27% -- or 28 cases -- were associated with fraud or technical violations. Other occupations in the cases included accounting, human resources, business analysts, sales, and advertising.

In 55% of the total 51 cases in which violations were present, site visits found that the visa recipient was not working or had never worked at the work site identified by the business filing the application.

In 27% of the cases showing violations, the employer wasn't paying a visa beneficiary the prevailing wage or was holding the person in a nonproductive status without pay, or with reduced pay, during periods of no work. Employers and visa beneficiaries admitted to this subpar pay during site visits, according to the report.

In some instances, employers or beneficiaries interviewed said that the worker's salary dropped below the prevailing wage because the employer had deducted H-1B application fees from the worker's salary. Filing fees typically total more than $2,000 per worker.

In 20% of the cases in violation, the government found faked academic degrees, forged signatures on documents, and documents that misrepresented H-1B eligibility. In 14% of cases, the business filing for visas didn't exist, couldn't support the number of employees claimed, or the employer never intended for the visa beneficiary to fill the job offered.

As a result of the report, the Benefit Fraud and Compliance Assessment Program, established in 2005 to evaluate the integrity of visa programs, has established a 21% baseline rate for technical violations and fraud in H-1B petitions.

In addition, the National Security and Records Verification Directorate is making "procedural changes" as a result of the study, to be "described in a forthcoming document."

Although the sample population was drawn for the purpose of a study, the Benefit Fraud and Compliance Program refers cases identified as fraud to Immigration and Customs Enforcement for consideration of formal criminal investigation and prosecution.

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