The US Department of Labor has widened its investigation into alleged fraud in the H-1B and PERM work visa programmes, with Cognizant among the Indian IT firms specifically named under scrutiny. According to Business Standard, the Office of the Inspector General (OIG) announced the probe on July 8, with Labour Department Inspector General Anthony D'Esposito describing it as the Trump administration's first major investigation into alleged H-1B and PERM visa fraud, labour trafficking and the displacement of American workers. The investigation has been taken under the Task Force to Eliminate Fraud led by Vice President J D Vance, with D'Esposito emphasizing that 'My team, in conjunction with President Trump and Vice President Vance's Fraud Task Force, has worked relentlessly to uncover fraud, safeguard taxpayer dollars, and hold bad actors accountable.'
The investigation has uncovered widespread schemes in which employers and labour brokers submitted fraudulent applications, exploited foreign workers through coercive wage-kickback arrangements, and undercut American workers by flooding the market with below-wage labour. As reported by Business Standard, the OIG has uncovered widespread schemes in which employers and labour brokers submitted fraudulent applications, exploited foreign workers through coercive wage-kickback arrangements, and undercut American workers by flooding the market with below-wage labour. According to PTI, D'Esposito emphasized the connection between visa fraud and organized crime, stating that 'Much of the visa and the human trafficking that we see when it comes to this foreign labour is tied to cartels, is tied to transnational gangs.' He characterized this as 'another example where fraud is fueling violent crime' during the interview. According to Business Standard, investigators are examining several forms of alleged abuse, including submission of fraudulent visa applications, fake recruitment or labour certification processes, wage kickback schemes, 'benching' workers without legally required pay, coercion or exploitation of foreign workers, labour trafficking and forced-labour networks linked to visa programmes, and undercutting US workers by paying below prevailing wages.
The probe specifically targets the IT services sector, with Cognizant identified as one of the major firms under scrutiny. According to Business Standard, D'Esposito revealed that 'We've already started to issue dozens of subpoenas; we are going to make sure that we track down every lead. We have whistleblowers talking about some of the biggest companies like Cognizant, who have been sort of, you know, in the chatter of issues with PERM and H-1B visas.' As reported by FOX Business, D'Esposito told reporters 'We have whistleblowers talking about some of the biggest companies, like Cognizant... and we are going to work side by side with the president and vice president's fraud task force to exhaust every lead.' The technology sector remains the biggest user of H-1B visas, accounting for roughly 60 per cent to 70 per cent of new applications in recent years, with other major users including consulting and professional services firms, engineering and manufacturing companies, healthcare organisations, medical research institutions and universities. This investigation represents a significant development in the ongoing debate over H-1B visa program oversight and its impact on American workers in the technology sector.
The investigation comes amid a broader tightening of US immigration and employment policies under President Donald Trump, whose administration has repeatedly argued that employment-based visa programmes must serve genuine labour shortages rather than become instruments for wage suppression or worker exploitation. According to PTI, D'Esposito described this as 'one of the most aggressive investigations into employment-based visa fraud' and emphasized that 'Without a doubt, we are going to take what we believe is probably the most aggressive action against foreign labour fraud by an Inspector General in this administration.' The Department of Labor has vowed to dismantle criminal networks abusing the employment-based visa system, with investigators being provided every resource required to pursue the inquiry. Immigration experts expect heightened scrutiny of employers, labour contractors and recruitment practices, with companies sponsoring foreign workers likely to face increased compliance checks. The investigation is likely to be closely watched in India, as Indian nationals account for the overwhelming majority of H-1B visa holders in the US, with around 71 per cent of approved H-1B beneficiaries in fiscal year 2024 being from India.
The investigation reveals that visa-related fraud extends beyond immigration violations and is increasingly linked to broader criminal networks, according to D'Esposito's statements to FOX Business. He claimed that 'This is another example where fraud is fuelling violent crime,' emphasizing that 'Much of the visa and the human trafficking that we see when it comes to this foreign labour is tied to cartels, is tied to transnational gangs.' The administration views the investigation as part of its wider effort to improve public safety while protecting American workers. In his latest interview, D'Esposito warned that 'This is not just people working... in factories,' stating that 'These are people working in medical facilities, in doctors' offices that are actually putting people in harm's way. I mean, to the potential of causing death.' He further claimed that the alleged fraud extends beyond labour-intensive professions, emphasizing that 'This is the work that we should be doing, not only to make America safe again, but to make America more affordable again.' Last month, a federal judge struck down the administration's requirement that employers pay a $100,000 fee when applying for H-1B visas, ruling that the executive branch had exceeded its authority by imposing what amounted to a tax without congressional approval.
