AAO Issues Landmark Precedent Decision on Fraud Findings After Petition Withdrawal

Key Takeaways

• The AAO (Administrative Appeals Office) held in Matter of Texperts, Inc., 29 I&N Dec. 491 (AAO 2026) that USCIS (U.S. Citizenship and Immigration Services) may make findings of fraud or willful misrepresentation even after a petition or application is withdrawn.
• The AAO remanded the specific fraud finding in Texperts as legally defective, instructing USCIS to issue a new, properly reasoned determination.
• Because this is a precedent decision, USCIS adjudicators nationwide are now on notice: withdrawal does not necessarily prevent an adverse fraud finding.
• The ruling reaches beyond H‑1B cases to I‑140 immigrant petitions, family-based petitions, adjustment of status applications, and virtually any benefit where fraud allegations may arise.
• It has been reported that USCIS had been issuing adverse fraud findings in withdrawal acknowledgment notices informally for years; Matter of Texperts now formalizes that practice.

Background: H‑1B context, but broader reach

The decision arose from an H‑1B petition selected in the lottery where USCIS alleged the petitioner submitted duplicate registrations in concert with a related company. Under current law the H‑1B cap and lottery system limit visas, and employers must attest they did not submit multiple registrations for the same beneficiary. In Texperts the petitioner withdrew the H‑1B petition after receiving a notice of intent to deny—a tactic some employers use to try to avoid a formal adverse finding. AAO is the internal appellate office within USCIS that reviews certain denials and adjudications; it issues precedent decisions that bind USCIS adjudicators. It has been reported that USCIS had been treating withdrawals as not insulating petitioners from fraud findings for several lottery cycles; the AAO decision now cements that approach.

The AAO ruling and its legal holding

The AAO concluded that USCIS may not continue to adjudicate the merits of a withdrawn petition but is authorized to make findings of fact — including findings of fraud or willful misrepresentation — for the record. At the same time, the AAO found the particular fraud determination in Texperts legally deficient and remanded for a new, adequately reasoned finding. Because Matter of Texperts is a precedent decision, its legal analysis governs future USCIS adjudications: officers must treat withdrawals as not automatically terminating the agency’s ability to document fraud allegations, but any such findings must meet legal standards and reasoning.

What this means for employers, sponsors, and beneficiaries

Practically, withdrawing a petition is no longer a safe way to halt agency fact-finding. Employers who thought withdrawal would cut off fraud or misrepresentation exposure may find adverse findings on their record anyway, which can affect future petitions, sponsorship credibility, and a beneficiary’s immigration prospects. The ruling reaches beyond H‑1B registrations to I‑140 immigrant petitions, family-based filings, adjustment of status applications, and other benefits where fraud allegations can be raised. For applicants and sponsors: expect possible post‑withdrawal correspondence and consider legal counseling before withdrawing. For attorneys: anticipate more appeals, remands, and a need to challenge the sufficiency of any fraud finding with careful factual and legal briefing.

Source: Original Article