US Government Investigates H-1B

PERM Visa Fraud; Cognizant Among Firms Under Scrutiny

Washington — July 9, 2026

The U.S. Department of Labor has opened a sweeping federal investigation into alleged fraud in the H-1B and PERM employment-based visa programs, with a top labor official naming Indian IT giant

Cognizant among the companies drawing scrutiny as authorities begin issuing dozens of subpoenas.

A New, Aggressive Crackdown

The probe, launched Wednesday, is being led by the Department of Labor's Office of Inspector General (OIG) as part of the Task Force to Eliminate Fraud, an initiative overseen by Vice President JD Vance. Officials said the investigation has uncovered widespread schemes in which employers and labor brokers submitted fraudulent applications, exploited foreign workers through coercive wage-kickback arrangements, and undercut American workers by flooding the market with below-wage labor.

Labor Department Inspector General Anthony D'Esposito described the effort in blunt terms in an interview with Fox Business, calling it among the most aggressive actions ever taken against foreign labor fraud by an inspector general. He said his office had already begun issuing dozens of subpoenas and was committed to tracking down every lead, adding that whistleblowers have flagged major companies, including Cognizant, amid ongoing chatter about PERM and H-1B visa issues.

D'Esposito went further in comments to Blaze Media, saying investigators have found evidence not just of visa fraud but of human trafficking, and framed the effort as connected to a broader crackdown tying labor and immigration fraud to organized criminal networks, including cartels. He stressed that the Fraud Task Force, under Vance's direction, considers no case too small or too large to pursue.

A Labor Department statement framed the stakes in stark terms, saying the abuses undermine programs meant to address genuine labor shortages rather than enrich bad actors at the expense of American workers. Officials described the investigation as part of a broader commitment to dismantling forced-labor and trafficking networks that exploit the foreign guest-worker visa system.

Cognizant Named, but No Charges Filed

Despite the pointed references to Cognizant, officials have been careful to note that no formal charges have been filed against the company, and that its inclusion reflects ongoing "chatter" among whistleblowers rather than a confirmed finding of wrongdoing. Data from the Labor Department shows why the firm has drawn attention: in the second quarter of 2026 alone, Cognizant successfully certified approximately 3,440 H-1B visas, making it one of the heaviest users of the program. A separate review of 2025 PERM data found Cognizant among the top companies relying on that pathway as well, out of roughly 80,700 PERM applications certified that year across all employers.

The PERM program — formally the Program Electronic Review Management system — is not itself a visa-issuing mechanism but a labor-certification step that can precede approval for certain employment-based visa categories, including green cards.

This is not the first time Cognizant's use of the H-1B program has drawn regulatory attention. The company has disclosed in past securities filings that, as one of the largest users of the H-1B visa program, it faces heightened legal and regulatory scrutiny and has previously been subject to investigations and unannounced site inspections by the Labor Department's Wage and Hour Division as well as the Department of Homeland Security.

A Shift Toward Proactive Enforcement

The investigation marks a structural change in how the federal government polices employment-based visa programs. Rather than relying primarily on complaint-driven reviews, the administration has adopted what officials describe as a "Secretary-certified" audit model, under which the Secretary of Labor can personally authorize audits based on reasonable cause alone, without waiting for a formal complaint to trigger a review. That shift lowers the threshold for federal scrutiny and gives investigators broader latitude to act preemptively.

The crackdown is being run as a multi-agency effort, drawing in the Department of Homeland Security and the Department of Justice alongside the Labor Department, and represents the first major fraud investigation into the H-1B and PERM systems undertaken during this term of the Trump administration. Companies caught up in the inquiry could face unannounced site visits, reviews of their online recruiting and job-posting practices, and, if found out of compliance, penalties ranging from removal from the H-1B program to civil fines and criminal charges.

Broader Implications for the Tech and Outsourcing Industry

The investigation lands at a sensitive moment for India's IT outsourcing sector, which has long relied heavily on the H-1B program to place engineers and consultants with U.S. clients. Cognizant, along with other major Indian IT services firms, has faced periodic congressional and regulatory criticism over the years for allegedly using the visa system to undercut wages for American technology workers, even as the companies maintain their sponsorship practices comply with federal law.

Cognizant has not yet issued a detailed public response to the newly opened investigation. Labor Department officials have said additional details, including the scope of the subpoenas and potential findings, are expected to be released as the inquiry progresses.

The probe adds to a broader pattern of tightening scrutiny on employment-based immigration under the current administration, and comes amid wider anxiety among foreign tech workers in the U.S. over visa uncertainty, with some reports suggesting growing numbers of Indian technology professionals are reconsidering their future in the American job market.

This report reflects the investigation's status as of July 9; no formal charges have been filed against Cognizant or any other named company, and details may be updated as the probe develops.