‘Largest fee fraud ever in US': $1bn from frozen visa applications

The Trump administration is facing explosive allegations that it has collected more than $1bn in immigration application fees while refusing to process the cases — a practice a new report says amounts to the “largest fee fraud in the history of the American immigration system”.

The claim comes from the libertarian Cato Institute, where researcher Austin Kocher argues that sweeping travel bans and immigration restrictions have created a system where applicants pay thousands of dollars only to see their cases stalled indefinitely.

Fees Taken, Applications Frozen

Under US law, immigration authorities must act on applications once the government accepts the associated fees — issuing either an approval or a rejection.

But the report claims that applicants from 92 countries targeted by restrictions imposed under Donald Trump are now trapped in a bureaucratic dead zone. Their applications remain unprocessed, with no timeline for review and no refunds for the money already paid.

Kocher alleges officials are continuing to collect fees while halting the system that should deliver a decision.

‘Don’t Tell Them They’re Banned’

The most striking claim centres on guidance allegedly given to consular staff within the US State Department.

According to the report, officers have been instructed not to inform applicants that they fall under travel bans — even as those applicants continue paying processing fees and attending visa interviews.

“The government is cashing those checks and then doing nothing,” Kocher wrote. “That’s fraud, not delay.”

Immigrants Inside the US Also Trapped

The freeze is not limited to visa applicants overseas. Immigrants already living in the US are also affected, the report claims.

Applications for work permits, permanent residency and other documentation submitted to the US Department of Homeland Security are reportedly stalled for people from the targeted countries — even in cases where individuals have already been admitted legally.

The result, according to the report, is a vast administrative standstill affecting roughly two million applicants.

Shock on Capitol Hill

The allegations have begun to ripple through Washington. At a recent congressional hearing, John Kennedy voiced disbelief at the scale of the claims.

“Folks have applied… they’ve paid money, and DHS is doing nothing?” he asked.

The Cato report urges Congress to force the administration to resume processing applications immediately — warning that collecting fees without providing the legally required service risks turning immigration policy into a billion-dollar legal and political crisis.

Trump administration is overseeing 'the largest fee fraud' in US history: Cato report