USCIS accused of 'massive fraud' as backlog leaves immigrants in limbo, costing over $1 billion in fees

Key facts

• USCIS and State Department are accused of 'massive fraud' against legal immigrants and their sponsors, per a Cato Institute study.
• Lucía, a DACA beneficiary, paid over $10,000 in fees and legal costs for an Advanced Parole request filed in January 2025, which was not approved until July, after her grandmother died in May.
• The Cato study estimates that nearly two million applications affected by Trump administration measures represent over $1 billion in fee payments to USCIS.
• Cuban immigrants are the most affected, with nearly half a million cases and $543 million in fees; Venezuelans follow with over 230,000 applications and $138 million.
• Three Trump-era policies are cited: a ban on entry and visas from 40 countries, a ban on immigration benefits from those countries, and a freeze on immigrant visas from over 75 countries.
• Lucía's daughter filed for her permanent residency in October 2024; six months later, USCIS has not confirmed receipt but has charged all fees, including medical exam and biometrics.
• Lucía's DACA renewal was delayed from June to September 2024, preventing her from renewing her driver's license and food truck permits, causing significant economic loss.

A broken promise: Immigrants pay thousands, wait in vain

Lucía, a DACA beneficiary who requested anonymity for fear of jeopardizing her immigration cases, paid over $10,000 in fees and legal costs for an Advanced Parole application filed in January 2025 to visit her dying grandmother in Mexico. She opted for expedited processing, which can yield a decision in days, but by April she had not even received confirmation that her application was received. USCIS cashed her checks, but provided no status update. Her grandmother died in May. USCIS approved the parole in July, too late. Lucía sent her daughter instead, incurring an additional $4,000 in expenses. 'I was left with the pain of not saying goodbye to my grandmother,' she said. The agency's silence is part of a broader pattern: a growing number of applicants report that USCIS accepts their fees but fails to process their petitions or provide information.

Cato Institute study: 'Massive fraud' against legal immigrants

A study by the Cato Institute, a libertarian-leaning think tank, accuses USCIS and the State Department of committing 'massive fraud against legal immigrants and their sponsors.' The study identifies three Trump administration policies as the root cause: a ban on entry and visa issuance for citizens of 40 countries; a prohibition on immigration benefits for legal immigrants from those countries already in the U.S.; and a freeze on immigrant visas for citizens of more than 75 countries. According to the study, these measures have affected nearly two million applications that would have been approved in other circumstances. The fees collected for these stalled applications exceed $1 billion, with USCIS's website stating that fees for services like biometrics are non-refundable. The study only counts fees for work permits and adjustment of status applications—the two primary paths to permanent residency.

Cubans and Venezuelans bear the brunt of the freeze

Cuban immigrants are the hardest hit, with almost half a million cases frozen, representing $543 million in fees for forms, interviews, and other services. Venezuelans follow, with over 230,000 applications and $138 million in payments to USCIS. David Bier, the study's author, noted that these numbers are only a sample due to the agency's lack of transparency. The policies have created a two-tier system: those from affected countries face indefinite delays, while others may see faster processing. The study argues that the government is effectively profiting from applications it has no intention of approving.

Lucía's ordeal: A cascade of consequences

Lucía's troubles did not end with the Advanced Parole. In October 2024, her daughter, who had just turned 21, filed for Lucía's permanent residency—a process that should be straightforward under immigration law. Six months later, USCIS has not confirmed receipt, though it has charged all fees: forms, medical exam, fingerprints, and more. 'But I still don't know where the process stands,' Lucía said. Total costs have exceeded $7,000, including legal fees. Earlier, in 2024, her DACA renewal was delayed from June to September, leaving her unable to renew her driver's license or the permits for her food trucks—a small business she runs in Nebraska, where she has lived for 30 years. The domino effect caused a severe economic blow during the months she waited for approval.

A system in crisis: Transparency and accountability questioned

The Cato study highlights a systemic lack of transparency. USCIS does not publicly disclose how many applications are stalled or the reasons for delays. David Bier emphasized that the figures in the study are conservative, as they only capture a fraction of the cases languishing at USCIS and the State Department. For Lucía, the experience has been a 'great government scam.' She is not alone. Across the country, immigrants in legal status—DACA recipients, visa holders, and those seeking permanent residency—are caught in a bureaucratic limbo, paying for services they never receive. The study calls for congressional oversight and policy reversal, but with the current administration's hardline stance, change seems distant.

What comes next: Legal challenges and human toll

The study's findings could fuel legal challenges against USCIS and the State Department, arguing that fee collection without service constitutes breach of contract or unjust enrichment. However, the agency's immunity and the complexity of immigration law make such suits difficult. For now, immigrants like Lucía continue to wait. Her daughter's permanent residency application remains unacknowledged. The $1 billion in fees sits in government coffers, while families are separated and lives disrupted. The human cost—missed funerals, lost income, prolonged uncertainty—cannot be quantified in the study's numbers.

The bottom line

• USCIS and the State Department have collected over $1 billion in fees for nearly two million applications that are frozen or delayed due to Trump-era policies.
• Cuban and Venezuelan immigrants are disproportionately affected, accounting for over $680 million in fees and 720,000 applications.
• Immigrants like Lucía pay thousands for expedited processing and legal fees but receive no service or status updates, leading to personal and economic harm.
• The Cato Institute study accuses the agencies of 'massive fraud,' but transparency remains lacking, making it difficult to assess the full scale of the problem.
• Current policies create a de facto ban on legal immigration from dozens of countries, undermining the legal immigration system.
• Without policy reversal or congressional action, the backlog and fee collection without service will continue, deepening the crisis.