AAO Issues Landmark Precedent Decision on Fraud Findings After Petition Withdrawal

The U.S. Citizenship and Immigration Services (USCIS) Administrative Appeals Office (AAO) has issued a significant precedent decision, Matter of Texperts, Inc., 29 I&N Dec. 491 (AAO 2026), that will have lasting consequences for employers and foreign nationals facing fraud or misrepresentation allegations across a wide range of immigration benefit requests. Although the case arose in the H1B context, the AAO’s legal reasoning is rooted in general USCIS regulatory authority and the broad provisions of the Immigration and Nationality Act (INA), meaning its implications extend well beyond H1B petitions to immigrant petitions such as the I-140, family-based petitions, adjustment of status applications, and virtually any other benefit request where the USCIS raises a fraud or misrepresentation allegation. The decision makes official what the USCIS has been doing informally for years: issuing findings of fraud or willful misrepresentation even after a petition or application has been withdrawn.

Background: The H1B Lottery and Multiple-Registration Fraud

The U.S. Congress caps the number of H1B visas at 65,000 per fiscal year, with an additional 20,000 available for individuals holding U.S. master’s degrees. To administer this limited supply, USCIS requires employers to submit registrations through an annual lottery. An employer may not submit multiple registrations for the same beneficiary in the same lottery cycle and must attest under penalty of perjury that they have not done so. If the USCIS suspects employers of having worked in concert with other employers to file registrations on behalf of the same individual, then the USCIS will find fraud and revoke H1Bs based on this conduct, as explained in the MurthyDotCom InfoArticle Challenging USCIS on H1B Fraud Findings Based on Multiple H1B Registrations (23.May.2024).

What Happened in Matter of Texperts

In Matter of Texperts, the petitioner, an IT staffing company, filed an H1B petition for a database administrator. After the petition was selected in the lottery, USCIS issued a notice of intent to deny, stating that the petitioner had worked in concert with a related company to submit duplicate lottery registrations for the same beneficiary. Although the petitioner attempted to rebut the fraud allegations themselves, rather than fighting the notice of intent to deny on the merits, the petitioner chose to withdraw the petition, which is a tactic that some employers have attempted as a way to cut off the adjudication before a fraud finding could be formally entered. The USCIS acknowledged the withdrawal but still made a formal finding that the petitioner had committed fraud.

The AAO’s Decision: Withdrawals Do Not Erase Fraud Findings

Upon appeal from the petitioner, the AAO held that while USCIS may not adjudicate the merits of a petition after it is withdrawn, it is fully permitted to make findings of fact, including findings of fraud or willful misrepresentation, for the record. However, the AAO also found that the actual fraud finding in this case was deficient and remanded the matter and instructed the USCIS to issue a new, properly reasoned finding.

Because Matter of Texperts is a precedent decision, every USCIS officer reviewing a withdrawn petition going forward is now on notice: a withdrawal does not foreclose a fraud finding, and the agency is authorized to make such findings for the record. This is no longer a matter of informal agency practice, but codified policy.

The Practice History: USCIS has been Doing this for Years

It is worth noting that this decision makes official something that USCIS has been doing informally for some time. In the context of multiple H1B registration schemes in particular, the agency has issued withdrawal acknowledgment notices containing adverse fraud findings since at least the current wave of multiple-registration enforcement began in earnest following the 2020 and 2021 lottery cycles. Matter of Texperts now provides both the legal foundation for those findings and a procedural roadmap for the analysis that USCIS officers must conduct.

The Consequences of a Fraud or Misrepresentation Finding

A finding of willful misrepresentation of a material fact under INA § 212(a)(6)(C)(i) renders an individual permanently inadmissible to the United States. This means the foreign national may be barred from obtaining any U.S. visa or adjusting status to lawful permanent residence. The impact is not limited to the current petition, it follows the individual to every future immigration application unless a waiver is granted, as explained in the MurthyDotCom InfoArticle Impact on Visa from Misrepresentation and Fraud (12.Mar.2013). Significantly, the AAO in Matter of Texperts confirmed that a finding of willful misrepresentation of material fact is sufficient to trigger these consequences, which has a lower bar than a full fraud finding.

What this Decision Means for Future Cases: Key Practical Takeaways

The most important lesson from Matter of Texperts is that a party facing allegations of fraud or misrepresentation cannot avoid an adverse finding simply by withdrawing the petition before the USCIS issues a final decision. Going forward, USCIS officers have explicit precedent authority to issue factual findings alongside any acknowledgment of withdrawal.

At the same time, the fraud standard still must be properly analyzed. Any finding of fraud or willful misrepresentation must be supported by a rational connection between the evidence and the specific legal elements. This gives petitioners and beneficiaries a basis to challenge findings that are inadequately reasoned.

Additionally, submitting a complete rebuttal is essential, and any withdrawal request should be accompanied by a thorough, substantive rebuttal of any fraud or misrepresentation allegations, even if the goal is to withdraw the petition. A well-constructed rebuttal may limit or defeat adverse findings and protect the beneficiary’s long-term immigration interests.

Finally, the AAO highlighted the importance of determining whether the finding falls on the employer or the beneficiary. As the Murthy Law Firm has argued in cases before USCIS, the H1B worker may have had no knowledge of multiple registrations submitted in their name. These are factually distinct situations, and the AAO’s decision underscores that findings of fact must be made with precision and specificity identifying who did what.

Conclusion

Matter of Texperts is a watershed moment in immigration enforcement that reaches well beyond the H1B lottery. Given that the decision is now binding on all USCIS adjudicators, its reach could be felt across virtually every immigration benefit category. The Murthy Law Firm will be watching closely to see how USCIS officers outside the H1B unit begin applying this precedent.

In situations like these, always consult a knowledgeable immigration attorney at the earliest stage possible. The Murthy Law Firm has extensive experience handling USCIS fraud findings and misrepresentation cases across many visa categories, and our attorneys are available to consult on these issues and other immigration matters.

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