To be clear, “US Only” means “eligible to work in the US”.

The candidates that I’m calling fraudulent are answering “Yes” to a question on our applicant form asking if they’re eligible to work in the US.

There’s absolutely nothing wrong with a US company wanting to hire US employees.

(FWIW I also hire contract developers outside the US… have nothing against outsourcing, but I prefer to do so knowingly rather than being conned)

Country of residence makes a difference for legal reasons, foreign remote employees are not the same as domestic remote employees.

Some companies have an established process to handle the different requirements of a global workforce, and for them hiring one more person from country X doesn't cause any issues; but if your HR, legal and accounting is set up for domestic operations, then hiring a foreign employee may easily add so much overhead that it's not worth the hassle.

This is completely normal and legally necessary in many cases. Your hyperbole is mildly harmless. I hope you know that.

You still need to provide accurate data for location, mainly due to taxes. I'm also getting from the post that there's an implication that they are receiving outside the us applicants.

One boring but absolutely valid reason you might want to hire remote people in the same country is that they're within a few time zones of everybody else so you can have online meetings during normal business hours.