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Texas AG Intensifies H-1B Visa Fraud Probe

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  Published in Business and Finance on Saturday, January 31st 2026 at 9:49 GMT by moneycontrol.com
      Locale: UNITED STATES

Dallas, TX - January 31st, 2026 - The Texas Attorney General's office today confirmed it is intensifying its investigation into alleged H-1B visa fraud involving three North Texas companies - Novelty Automation, Smart Business Solutions, and Smart Logistics. The initial probe, first revealed earlier this week, has expanded to include scrutiny of potential systemic abuse of the H-1B visa program and a deeper look into the prevalence of "ghost offices" used to falsely demonstrate operational capacity.

Attorney General officials indicate the investigation is no longer solely focused on the three named companies but is evolving into a broader assessment of H-1B visa practices across the state, particularly within the rapidly growing technology and logistics sectors. Sources within the Attorney General's office, speaking on condition of anonymity, revealed that the number of companies under investigation could increase significantly in the coming weeks.

The core of the allegations revolves around the suspicion that Novelty Automation, Smart Business Solutions, and Smart Logistics deliberately misrepresented their business needs to the United States Citizenship and Immigration Services (USCIS) in order to secure H-1B visas for foreign workers. The Attorney General's office believes these companies may have prioritized H-1B hires over qualified American workers, violating the spirit, if not the letter, of the visa program. A filing in the Southern District of Texas details the Attorney General's request for extensive documentation related to the hiring practices of these firms.

A particularly concerning aspect of the investigation is the alleged use of "ghost offices." These are physical addresses registered as business locations, appearing legitimate on paper, but are not actively used for conducting business. Investigators suspect these locations were created solely to satisfy USCIS requirements and create the illusion of a substantial workforce and operational footprint. Utilizing ghost offices allows companies to falsely claim a genuine need for H-1B workers in a specific geographic location. This tactic, if proven, represents a significant instance of fraudulent activity.

The H-1B visa program, established to address shortages in specialized occupations requiring theoretical or technical expertise, has become increasingly contentious. With an annual cap on the number of visas issued, the competition for these positions is fierce. Critics argue that the program is often exploited by companies seeking to reduce labor costs by hiring foreign workers at lower wages than their American counterparts. While proponents maintain the program is crucial for attracting skilled talent and fostering innovation, concerns about potential displacement of American workers continue to fuel debate.

"We are committed to ensuring that the H-1B visa program is used as intended - to fill genuine skill gaps and not to circumvent labor laws or unfairly compete with American workers," stated a spokesperson for the Attorney General's office. "The use of fraudulent practices, such as misrepresenting operational needs or utilizing 'ghost offices,' will not be tolerated."

The investigation comes at a time of heightened national scrutiny of immigration policies and visa programs. Federal authorities have also recently announced increased efforts to combat H-1B visa fraud, signaling a coordinated approach to address these concerns. Experts predict that the outcome of the Texas investigation could set a precedent for similar cases across the country.

Industry analysts suggest the focus on "ghost offices" is particularly important, as it highlights a potential loophole in the current USCIS verification process. Strengthening verification protocols and increasing on-site inspections could be crucial steps in preventing future fraud.

As of this reporting, Novelty Automation, Smart Business Solutions, and Smart Logistics have not issued public statements regarding the investigation. The Attorney General's office has indicated that it will pursue all available legal remedies if evidence of wrongdoing is found, including financial penalties, injunctions, and potential criminal charges.