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We received another email from the Canadian Consulate saying they are conducting an investigation with USPS and will give us a status update on July 5th. They had initially said the Canadian Consulate will reimburse us for application fees to replace lost documents, but in today's email said...

I am also in the same boat guys. Me and my wife are on H1B and they cannot locate our passports either. I am thinking of going down there next week to talk to them. Our passports were delivered on May 7th as well. What should be our course of action?