A lot of firms do this as a business before 2001 (know as bodyshop) -- sponsor H1B for non-existing positions-- resulting in a crack down for these bodyshops and a new (in 2000) regulation defining H1B dependent employers because of this. But apparently, as long as the employer is willing to lie, chances are they can usually get away for H1B. Even after 2005, when another new regulation collecting $500 anti-fraud, we didn't hear about a lot of H1/L1 anti-fraud audits conducted.