A Dallas building linked to more than 500 approved H-1B petitions had locked doors, dark offices and little sign of active business operations when federal investigators arrived.
That does not mean the 500 workers were doing anything wrong. It does show what investigators are now looking for: a gap between what an H-1B petition says and what actually exists at the worksite.
The Department of Labor’s Office of Inspector General launched a nationwide investigation into alleged H-1B and PERM fraud in July. By September, the investigation had moved beyond subpoenas and field checks. The OIG says investigators have executed search warrants, issued dozens of subpoenas and suspended visa applications from Cognizant and Cloudera while the criminal investigation continues.
For H-1B workers, especially those employed through staffing firms or IT consultancies, the important question is not whether an investigation exists. It is whether the job on paper matches the job in reality.
What is the DOL actually investigating?
The OIG opened the investigation on July 8, 2026, covering alleged fraud and abuse in the H-1B and PERM programs.
The agency says investigators are looking at fraudulent visa applications, wage-kickback arrangements, exploitation of foreign workers and schemes involving labor brokers. The OIG’s broader foreign-labor investigation also covers falsified labor-related visa applications and potential labor trafficking.
That is broader than simply checking whether an immigration form contains a typo.
Investigators can look at whether the employer actually exists and operates as represented, whether the worker is performing the job described in the petition, whether required wages are being paid, and whether other parties in the employment arrangement are involved.
For an H-1B worker, that distinction matters because the immigration paperwork often involves several parties: the petitioning employer, a staffing company or consulting firm, and sometimes an end-client workplace.
Why the Dallas building matters
The clearest example so far came in August.
During a Dallas field operation, Inspector General Anthony D’Esposito said investigators visited locations connected to companies with hundreds of approved H-1B petitions.
At one multistory building, businesses were linked to more than 500 approved H-1B applications. Investigators reported finding many offices with locked doors, lights off and little evidence of active business operations.
That finding is an investigative lead, not a finding that every petition connected to the building was fraudulent.
But it illustrates the kind of question federal investigators are asking: Does the physical workplace match the employer and employment arrangement described in the immigration records?
For workers, that is why worksite information deserves attention.
Does this mean H-1B workers are being investigated?
Not necessarily.
The OIG investigation is primarily directed at suspected fraud and abuse involving employers, labor brokers and other participants in the employment system. The existence of an investigation does not establish wrongdoing by an individual H-1B worker.
A worker at a company under scrutiny is not automatically accused of fraud.
The bigger concern is what happens if investigators determine that the employer’s filings or employment practices do not match the legal requirements of the H-1B program.
DOL rules require H-1B employers to meet wage and working-condition obligations under the Labor Condition Application. Federal law also gives the Secretary of Labor authority to initiate certain H-1B investigations when there is reasonable cause to believe an employer is not complying with those requirements.
Staffing firms and client sites deserve extra attention
This is particularly relevant for workers employed by IT consulting companies and staffing firms.
The worker may technically be employed by Company A while spending most of the working week at Company B’s office or on Company B’s project.
That arrangement is not automatically unlawful. Third-party placement itself is not proof of H-1B fraud.
But it creates more facts that need to line up: the petitioning employer, the worksite, the job duties, the employment relationship and the wage arrangements.
A worker should know the basic answers to these questions:
- Who is the employer listed on the H-1B petition?
- What worksite or worksites were listed?
- Where is the worker actually performing the job?
- What position and duties were described?
- Who pays the worker?
- Is the required H-1B wage actually being paid?
- Is there a staffing or subcontracting arrangement between the employer and client?
A mismatch does not automatically mean the worker has an immigration violation. But it is a reason to ask the employer’s immigration team for clarification.
Can the government show up without warning?
There are several different enforcement mechanisms, and they should not be treated as identical.
The Department of Labor can initiate certain H-1B investigations when the statutory requirements for a Secretary-initiated investigation are met. Federal law provides for notice in such investigations, although notice can be withheld when the Secretary determines that advance notice would interfere with the investigation.
Separately, USCIS has its own site-visit and verification authority.
The 2024 DHS rule codified USCIS authority to conduct H-1B site visits and clarified that failure to cooperate with a site visit or compliance review can lead to denial or revocation of petitions for workers at the affected location.
So an employer should not assume that every government review will arrive as a scheduled appointment.
What happens if an employer fails an investigation?
The consequences depend on what investigators find and which enforcement process is involved.
DOL enforcement can involve back wages, civil money penalties and, in appropriate cases, debarment from the H-1B program. Project Firewall, launched in September 2025, specifically targets H-1B compliance and allows the Labor Department to prioritize investigations involving suspected displacement, inadequate recruitment or other H-1B abuses.
USCIS can separately review whether a petition remains eligible. Under the 2024 rule, failure to cooperate with a USCIS site visit or compliance review can result in denial or revocation of affected petitions.
For the worker, the important point is that an employer’s compliance problem can eventually become an immigration problem if the underlying petition is denied or revoked.
That does not mean every government investigation ends with workers losing status. Investigations can take time, and allegations are not the same as final findings.
What about Cognizant?
Cognizant was named by the Labor Department’s inspector general when the investigation was announced in July. At that stage, no formal finding of wrongdoing had been announced against the company.
The situation changed in September.
On September 18, the DOL OIG said the Department had suspended visa applications from Cognizant and Cloudera pending the criminal investigation. The same announcement said investigators had already issued dozens of subpoenas and executed search warrants.
That is a significant development, but it is still important to distinguish an investigation from a final adjudication of wrongdoing.
The suspension is an enforcement action connected to the ongoing investigation. It is not, by itself, a criminal conviction or final finding that every H-1B petition associated with either company was fraudulent.
What should an H-1B worker do now?
There is no reason to panic simply because a company uses H-1B workers or because a worker is assigned to a client site.
But workers should know what was actually filed on their behalf.
Start by keeping copies of the H-1B approval notice, Labor Condition Application, employment agreement, recent pay statements and documents showing the current worksite and job duties.
If the worker is at a client location, compare the actual arrangement with the information provided by the employer’s immigration team.
Pay particular attention to situations involving:
- Long-term placement at a client site
- Multiple client locations
- A worksite that differs from the immigration records
- Unpaid periods between projects
- Requests to return part of the salary to the employer or recruiter
- Pay that appears inconsistent with the required H-1B wage
- Employment arrangements that are difficult to explain from the paperwork
Some of these situations can have legitimate explanations. Others may raise compliance questions. The key is to get the facts before an investigation does.
What if there is wage kickback or unpaid benching?
This is more serious than an ordinary workplace disagreement.
If an employer or labor broker requires an H-1B worker to return part of the required wage, that can raise serious compliance concerns. The same is true of unlawful unpaid “benching” in circumstances where the employer is required to pay the worker. See also: “H-1Bs getting crushed”: is the $100k fee already blocked? What to actually watch.
Workers who believe they have information about H-1B or other DOL program fraud can contact the DOL OIG Hotline at 1-800-347-3756 or submit a complaint through the OIG’s online reporting system.
A worker considering a report should preserve relevant records rather than relying on memory.
Is this connected to the new H-1B selection system?
It is a separate policy change, but the two developments are happening at the same time.
For FY2027, DHS replaced the purely random H-1B cap selection process with a weighted system based on the offered wage level. Wage Level IV registrations receive four entries in the selection pool, Level III receives three, Level II receives two and Level I receives one. See also: The proposed $103,265 H-1B fee: what it means for workers and applicants.
That does not mean the new selection system makes a low-wage H-1B petition fraudulent.
It does mean wage information is receiving more attention across the H-1B system. At the same time, DOL enforcement is examining alleged wage violations, fraudulent filings and other abuses. See also: $100,000 or $103,265? What the viral H-1B fee videos keep getting wrong.
For workers, these are separate rules with separate purposes. They should not be presented as one single enforcement program.
What this means if you are on an H-1B
The biggest change is not that every H-1B worker is suddenly under investigation.
It is that the government is putting more resources into checking whether H-1B employment arrangements are real, documented and compliant.
A worker employed directly by a company at its normal worksite is not in the same factual situation as someone employed by a staffing firm and permanently assigned to a third-party client.
And being connected to a company under investigation does not by itself establish that an individual worker did anything wrong.
But if the paperwork says one thing and the actual employment arrangement says another, that difference can matter.
The investigation is no longer just a headline
The July announcement was the beginning of the investigation. The August Dallas operation showed investigators moving into physical worksites. By September, the OIG said subpoenas had been issued, search warrants executed and visa applications from Cognizant and Cloudera suspended pending the investigation.
That makes the practical lesson fairly simple for H-1B workers:
Know what your petition says, know where you actually work, know who employs you, and keep the documents that prove it.
If those facts line up, an investigation into someone else’s alleged fraud does not automatically become your immigration problem.
If they do not, the time to understand the discrepancy is before a government investigator arrives.
Quick reference
| Question | What matters |
|---|---|
| Was the H-1B employer investigated? | An investigation is not the same as a final finding of wrongdoing |
| Does a client-site assignment mean fraud? | No. Third-party placement can be legitimate, but the employment arrangement must comply with H-1B rules |
| Can the government inspect an H-1B worksite? | Yes. DOL and USCIS have separate investigative and site-visit authorities |
| What happened in Dallas? | OIG investigators checked locations linked to companies with 500+ approved H-1B applications and reported inactive-looking offices |
| Are Cognizant and Cloudera affected? | DOL OIG said visa applications from both were suspended pending the criminal investigation |
| What should workers keep? | H-1B approval notice, LCA, employment agreement, pay records and current worksite information |
| Where can suspected DOL fraud be reported? | DOL OIG: 1-800-347-3756 or its online hotline |
| Does the FY2027 weighted lottery mean low wages are illegal? | No. The selection system and H-1B wage-compliance rules are separate |
Sources
- U.S. Department of Labor OIG: July 8 H-1B and PERM fraud investigation
- U.S. Department of Labor OIG: August 13 Dallas field operation
- U.S. Department of Labor OIG: September 18 foreign-labor fraud investigation update
- U.S. Department of Labor: Project Firewall
- U.S. Department of Labor: H-1B Labor Condition Application requirements
- Federal Register: 2024 DHS H-1B final rule and site-visit provisions
- Federal Register: Weighted H-1B selection rule
