Texas Attorney General Launches Sweeping H-1B Visa Fraud Investigation
In a significant development highlighting the ongoing political divide between MAGA and moderate Republicans, Texas Attorney General Ken Paxton has initiated a comprehensive investigation into alleged abuses of the federal H-1B visa program. The probe, announced on Wednesday, targets what his office describes as fraudulent schemes that disadvantage American workers through improper visa practices.
Targeting Alleged Sham Companies and Ghost Offices
Paxton's office has issued Civil Investigative Demands (CIDs) to three North Texas companies, compelling them to submit records concerning their business operations, employee details, and visa sponsorship procedures. According to local media reports, these businesses are purportedly managed by Indian nationals and are suspected of establishing "sham companies" and maintaining "ghost offices" specifically to improperly secure H-1B visas for foreign workers.
The attorney general's office alleges that certain entities have utilized deceptive websites promoting non-existent products or services, with the primary objective of justifying visa sponsorships. "Any criminal who attempts to scam the H-1B visa program and use 'ghost offices' or other fraudulent ploys should be prepared to face the full force of the law," Paxton declared in an official statement. He emphasized that such abuses "strip jobs and opportunities away from Texans," underscoring the local economic impact.
Industry Pushback and Political Context
Industry experts contend that Paxton and MAGA-aligned media are misrepresenting a conventional business model prevalent in the IT consulting sector. In this model, often referred to as a "bodyshop," companies maintain minimal administrative infrastructure—sometimes operating from home offices—because their employees are physically stationed at the premises of major clients, such as financial institutions or telecommunications corporations.
Several prominent Indian IT firms, including Tata Consultancy Services, Infosys, and Wipro, have substantial operations in Texas, employing thousands of workers, including American citizens. However, Paxton's investigation aims to demonstrate that some smaller entities, labeled as "body shops," are not legitimate consulting firms but rather "sham" operations designed to collect fees for visa sponsorship and provide "bench" services to clients while deducting portions of workers' wages.
Broader Immigration and Political Implications
The H-1B program permits U.S. employers to hire foreign professionals in specialized fields like technology, engineering, and medicine. While extensively utilized by major corporations, the program has faced persistent criticism from labor advocates and immigration skeptics who argue it can be exploited to suppress domestic wages or displace American workers. Texas holds the second-highest number of H-1B approvals nationwide, trailing only California, amplifying the local political and economic significance of this issue.
Paxton's action follows an executive directive issued by Governor Greg Abbott just one day prior, mandating state agencies and public higher education institutions to suspend new H-1B visa petitions until May 31, 2027. Affected entities must report comprehensive details on current visa holders to the Texas Workforce Commission by March 27, including job roles, countries of origin, visa expiration dates, and initiatives to prioritize hiring Texans. These state measures reflect increased federal scrutiny, exemplified by coordinated fraud investigations launched in September 2025 by U.S. Citizenship and Immigration Services and the Department of Labor, including the Labor Department's "Project Firewall," aimed at ensuring employer compliance with wage and recruitment regulations that favor American workers.
Senate Campaign and Republican Party Dynamics
While framed as an enforcement initiative, Paxton's investigation unfolds against the backdrop of his Senate campaign. He is challenging John Cornyn, a four-term senator and former GOP whip, in the Republican primary scheduled for March 3, 2026. Paxton has positioned himself as a staunch conservative aligned with "America First" principles, frequently criticizing Cornyn for perceived moderation on issues such as U.S. aid to Ukraine and immigration policies.
Recent polling indicates a tight race between Paxton and Cornyn, with Congressman Wesley Hunt also in contention as a third candidate. This scenario raises the possibility of a May runoff if no candidate secures 50 percent of the vote. Former President Donald Trump has yet to endorse any candidate in this race. Collectively, the investigation and Senate contest highlight a broader internal struggle within the Texas Republican Party between MAGA-aligned insurgents and more traditional conservatives. The outcome may significantly influence the party's stance on immigration policy and Texas's role in national debates concerning labor, work visas, enforcement, and economic growth.
As of this week, no formal charges have been filed, and the companies under investigation—which Paxton has not publicly identified—have not issued responses. Local reports have named two of the firms: Qubitz Tech Systems LLC, with 13 approved H-1B visa employees, and 3BEES Technologies, which secured 27 H-1B visas between 2022 and 2025. Paxton's office has additionally launched a public tip portal to gather information on potential violations, further intensifying the scrutiny on visa practices in the state.
