by Douglas Ankney

The United States Court of Appeals for the Ninth Circuit held that the untruthful responses of Namrata Patnaik and Kartiki Parekh on visa applications could still be found by a jury to be fraud if the government relied on those responses when deciding to issue the visas despite the fact the untruthful responses were to questions the Government was not permitted to ask.

Background

Patnaik and Parekh (“Defendants”) worked as the chief executive officer and human resources manager, respectively, of PerfectVIPs, Inc., a semiconductor chip design consulting and staffing company that employs numerous H-1B visa holders. The Government alleged that between 2011 and 2017, Defendants submitted 85 H-1B visa applications for temporary nonimmigrant workers wherein the Defendants falsely claimed that the workers would be employed “onsite” at PerfectVIPs working on “internal projects.” The Government alleged that the Defendants knew at the time they made these false claims that the 85 nonimmigrant workers would be contracted out to work for offsite clients. The Government indicted the Defendants on one count of conspiracy to commit visa fraud and three counts of visa fraud and aiding and abetting under 18 U.S.C. §§ 371, 1546(a).

The Defendants moved to dismiss the indictment, arguing that, since it was not a crime to provide the U.S. Citizenship and Immigration Services (“USCIS”) with incorrect information about where H-1B beneficiaries will work or what specific projects they will work on, the indictment failed to charge an offense. According to the Defendants, USCIS was permitted to ask only about the beneficiaries’ “specialty occupation,” so any “granular detail” about their projects was not legally material to H-1B eligibility determination, i.e., even if the Defendants had provided false information to USCIS, the information could not be material because the USCIS was not permitted to ask the question of where, or on what projects, the H-1B beneficiaries would work.

The U.S. District Court for the Northern District of California, relying on ITServe All, Inc. v. Cissna, 443 F.Supp.3d 14 (D.D.C. 2020), granted Defendants’ motion to dismiss. (The District Court interpreted ITServe to mean that “USCIS may not require details concerning the specific projects upon which an H-1B visa beneficiary would be working.”) The Government timely appealed.

Analysis

The Court began its analysis by addressing the sufficiency of an indictment, observing that an “indictment is sufficient if it contains the elements of the charged crime in adequate detail to inform the defendant of the charge.” United States v. Kaplan, 836 F.3d 1199 (9th Cir. 2016). The Court explained that an indictment need only adequately allege the elements of the offense and fairly inform the defendant of the charge. Id. In evaluating an indictment, courts must consider it as a whole, include facts that are necessarily implied, and construe it according to common sense. Id. Importantly, courts do not assess whether the Government can prove its case at this stage. Id.

The indictment in the present case alleged visa fraud. The Court noted that visa fraud requires proof that the defendant (1) knowingly (2) made a false statement (3) that was material (4) and under oath (5) in an application required by the immigration laws or immigration regulations. United States v. Wang, 944 F.3d 1081 (9th Cir. 2019); see 18 U.S.C. § 1546(a).

The primary issue on appeal was the element of materiality, according to the Court. A visa-application statement is material if it “could have affected or influenced the government’s decision to grant” the petition. United States v. Matsumaru, 244 F.3d 1092 (9th Cir. 2001). The Court explained that materiality is assessed “at the time the alleged false statement was made” and that “[l]ater proof that a truthful statement would not have helped the decision-making body does not render the false [statement] immaterial.” United States v. McKenna, 327 F.3d 830 (9th Cir. 2003). The indictment alleged that the Defendants falsely represented in several Form I-129 petitions that specific H-1B visa applicants “would be employed by PerfectVIPs to work on PerfectVIPs in-house projects and contracts at PerfectVIPs’ office locations, when the Defendants knew at the time that these representations were false.” Instead, the Defendants knew that PerfectVIPs would contract out the visa holders to other employers for offsite projects.

The Court concluded that the indictment sufficiently alleged a material misrepresentation. By law, H-1B petitioners must “establish that the H-1B beneficiary employees would fill specific, bona fide positions that were available at the time [the petitioner] filed the petitions, and that there was, or would be, a legitimate employer-employee relationship between [the petitioner] and the H-1B beneficiaries.” United States v. Prasad, 18 F.4th 313 (9th Cir. 2021). Accurate information on where and for whom the H-1B beneficiaries will work could affect or influence the decision to grant the H-1B visa petition. See Matsumaru. Thus, the Court determined that a jury could find the Defendants’ alleged false statements material.

The District Court had ruled that the defendants’ alleged misrepresentations were not “material” as a matter of law because USCIS cannot ask petitioners to provide H-1B beneficiaries’ work assignments, itineraries, or the details of specific work projects. See ITServe.The District Court thus did not believe that the Government could show materiality because “USCIS [was] prohibited from asking for this information.” The Defendants likewise asserted that the alleged false statements cannot be material to the Government because USCIS cannot request information that Congress did not require. But even assuming that USCIS was not permitted to ask detailed questions about jobsite locations or specific projects, the Defendants cannot lie to the Government in response, the Court stated.

The Court noted that the principle that the Government may punish untruthful responses to unlawful questions as fraud dates back to the U.S. Supreme Court’s 1937 Kapp decision. Since Kapp, the Supreme Court has “consistently – indeed without exception – allowed sanctions for false statements or perjury; [it] ha[s] done so even in instances where the perjurer complained that the Government exceeded its constitutional powers in making the inquiry.” United States v. Mandujano, 425 U.S. 564 (1976) (collecting cases). The Court explained that in the decades following Kapp, the Supreme Court reaffirmed that the Government may prosecute false statements in response to an unlawful inquiry. See, e.g., Kay v. United States, 303 U.S. 1 (1938) (“When one undertakes to cheat the Government or to mislead its officers … by false statements, he has no standing to assert that the operations of the Government in which the effort to cheat or mislead is made are without constitutional sanction.”); Dennis v. United States, 384 U.S. 855 (1966) (“One who elects … a course [of fraud and deceit] as a means of self-help may not escape the consequences by urging that his conduct be excused because the statute which he sought to evade is unconstitutional.”); United States v. Knox, 396 U.S. 77 (1969) (“[O]ne who furnishes false information to the Government in feigned compliance with a statutory requirement cannot defend against prosecution for his fraud by challenging the validity of the requirement itself.”).

In Kapp, hog sellers were charged by the Government with making false statements as to the identity of the hog producers in order to obtain benefits under the Agricultural Adjustment Act (“AAA”). The defendants argued that the provisions of the AAA were unconstitutional. The District Court dismissed the “false claims” offense against the defendants, reasoning that “the representations … cease to be misrepresentations of material facts when the act itself falls.” But the Supreme Court rejected that “materiality argument” and reversed. In the Kapp Court’s view, “the defendants were not charged with violating the AAA but with fraud, which aims to combat ‘cheating the government.’” It declared that “Congress was entitled to protect the government against those who would swindle it regardless of questions of constitutional authority,” adding that “such questions” of the constitutionality of the law “cannot be raised by those who make false claims against the government.”

The Court stated: “In other words, even if the government’s request for information was unconstitutional, it didn’t matter for purposes of the materiality of the false statement.” The Court noted that the Ninth Circuit has fully embraced this principle. One year after Kapp, the Ninth Circuit applied it to deny a challenge to a fraud conviction in Hills v. United States, 97 F.2d 710 (9th Cir. 1938), where a defendant lied about the source of gold sold to the government under the Gold Reserve Act of 1934, arguing unconstitutional delegation of authority. The Hills Court held that Congress is “entitled to protect the Government against those who would swindle it, regardless of questions of constitutional authority to conduct the particular operation.”

The Ninth Circuit has applied the principle broadly across constitutional and non-constitutional challenges. In Ogden v. United States, 303 F.2d 724 (9th Cir. 1962), a defendant falsely responded to a Department of Defense inquiry about Communist Party affiliations, challenging the delegation of authority (a non-constitutional claim). The Ogden Court explained: “One who has given false answers to material inquiries regarding a matter colorably within the authority of a government agency may not defend a subsequent prosecution under 18 U.S.C.[] § 1001 on the ground that the governmental operations involved were in fact vulnerable to constitutional attack.”

Other circuits follow the same principle. See United States v. Holden, 70 F.4th 1015 (7th Cir. 2023) (“[F]alse statements may be punished even when the government is not entitled to demand answers” because “[t]he word ‘material’ … does not create a privilege to lie, when the answer is material to a statute, whether or not that statute has an independent constitutional problem.”); United States v. Walgreen Co., 78 F.4th 87 (4th Cir. 2023) (“[C]riminal-fraud defendants can’t escape liability by arguing that their fraudulent statements went to illegal requirements.”). Thus, the Court observed that purported invalidity of the Government’s inquiry does not give a defendant license to lie.

Turning to the present case, the Court stated that whether the Government was asking improper questions under the INA is irrelevant to whether a defendant committed visa fraud. The Government may still enforce statutes, like § 1546(a), that prevent “cheating the government” and that stop “those who would swindle it[,] regardless” of whether the Government exceeded its authority under the INA. Kapp. Accordingly, whether USCIS violated the INA “is legally irrelevant to the validity of” an indictment under § 1546(a), the Court stated. See Bryson v. United States, 396 U.S. 64 (1969).

The proper forum to challenge USCIS’s authority to ask detailed questions on I-129 petitions was not through an attack on a criminal fraud indictment, the Court explained. “One who elects … a course [of fraud and deceit] as a means of self-help may not escape the consequences” by arguing the Government exceeded its authority. Dennis. Instead, if the Defendants were so concerned with the legality of I-129’s questions, they could have resorted to legal process and pursued something like a “declaratory-judgment action[,] rather than tell a lie” that violated a criminal statute. See Holden.

The Court determined that the Defendants fail to distinguish the applicability of Kapp and its progeny. First, the Defendants argue that the Kapp line of cases has “nothing to do with materiality.” According to the Defendants, none of these cases involve challenges to the materiality of the false statements because the materiality of the statements was accepted. But that is wrong, according to the Court. Kapp itself was about materiality. In Kapp, the District Court dismissed the criminal charges because it believed that the false statement “cease[d] to be a material fact, if the provisions of the [AAA were] void.” The Kapp Court rejected that view and reinstated the criminal charges. Thus, the Court concluded that the Kapp principle governs this case even though the Defendants challenge the materiality element of § 1546(a).

Second, the Defendants argue that the Kapp line of cases is distinguishable because those cases all dealt with constitutional challenges to the Government’s action rather than a statutory claim that USCIS exceeded its authority. But the Supreme Court has never confined this principle to constitutional challenges. It has broadly held that one “cannot defend against prosecution for … fraud by challenging the validity of [a statutory] requirement.” Knox. Similarly, the Ninth Circuit has broadly applied this principle to non-constitutional challenges to government authority. See Ogden. Indeed, the Court commented that it would be odd if the Government could punish a defendant for false statements when it violates the Constitution but not when it violates a mere statute.

Finally, the Defendants argue that Kapp is distinguishable because the defendants there received government benefits (i.e., money) directly because of the false statements. In the Defendants’ view, the false statements here were immaterial because the foreign-worker beneficiaries all met the requirements of the H-1B program regardless of the alleged false statements about their workplace or employer. The Court responded that this is irrelevant. A “false statement need not have actually influenced the agency, and the agency need not rely on the information in fact for it to be material.” Matsumaru. The Court explained all that is necessary is that the false “statements made in support of … visa petitions could have affected or influenced the government’s decision to grant those petitions.” Id. Thus, the Court ruled that the longstanding principle that the Government may punish untruthful responses to unlawful questions as fraud controls, so “lying on H-1B visa applications remains visa fraud even when the lies were given in response to questions the government can’t legally ask.”

Conclusion

Accordingly, the Court reversed the District Court’s judgment and remanded for reinstatement of the criminal charges. See: United States v. Patnaik, 125 F.4th 1223 (9th Cir. 2025).  

Subscribe today

Already a subscriber? Login