Settlement reached in inquiry into visa fraud at tech giant Infosys
Infosys, the giant Indian technology outsourcing company, has agreed to pay $34 million in a civil settlement after federal prosecutors in Texas found it had committed "systemic visa fraud and abuse" when bringing temporary workers from India for jobs in U.S. businesses, according to court documents and officials familiar with the case. The payment is the largest ever in a visa case.
After an investigation of more than two years, prosecutors on Wednesday will unveil the settlement as well as its accusations that Infosys "knowingly and unlawfully" brought Indian workers into the United States on business visitor visas since 2008, which avoided the higher costs and delays of a longer-term employment visa the workers should have had. They will charge that Infosys systematically submitted misleading information to U.S. immigration authorities and consular officials to obtain the faster visas, unfairly gaining a competitive edge and undercutting American workers qualified for the jobs.
Federal investigators also found extensive omissions and errors in the hiring records Infosys was required to keep for its employees, which could have allowed thousands of Indians to continue working in this country after their visas had expired, according to the documents.
The lead prosecutor in the case, Shamoil Shipchandler, an assistant U.S. attorney in the Eastern District of Texas, said he could not comment on the settlement before a news conference scheduled for Wednesday in Plano, where Infosys has offices that handle its visa applications.
Infosys has steadfastly denied any accusations of visa abuse and fought the case vigorously. "Those claims are untrue and only unproven assertions," the company said in a statement Tuesday. Infosys said its use of business visitor visas "was for legitimate business purposes and not in any way intended to circumvent the requirements" of the employment visa, which is known as H-1B.
Infosys, which is based in Bangalore, said the resolution of the case was not yet completed. "Infosys' policy demands adherence to all laws, rules, and regulations everywhere we operate and we continue to take our compliance obligations seriously," the statement said.
The settlement is one of several setbacks in this country for Infosys, and could also affect other big Indian outsourcing companies that rely on the temporary H-1B employment visas to bring thousands of workers from India each year for technology contracts here. In a class-action lawsuit filed this year in Wisconsin, four American tech workers assert that Infosys broadly discriminates against Americans with its practice of employing mainly South Asians in the United States.
The outcome in Texas is long-awaited relief to an American employee of Infosys, Jack B. Palmer. He spurred the federal investigation by bringing a whistle-blower lawsuit in Alabama in February 2011, saying that he had been punished and sidelined by Infosys executives after he reported witnessing widespread visa fraud. Since then, Palmer said by email, the case has continued to dominate his life. He has remained on the company's payroll while cooperating with a federal investigation that has ground slowly forward, but he has not been assigned any work or spoken with anyone at Infosys for many months.
"Despite the personal toll it took on me, it would have been much worse in the long run if I had turned the other cheek," Palmer said. "It was a question of right and wrong, following my conscience and following the law."
Infosys strongly rejected Palmer's claims and fought his whistle-blower case, which was dismissed last year by a federal judge in Alabama.
But the time Palmer has invested is likely to be worth it. Shipchandler and Palmer's lawyer, Kenneth Mendelsohn of Montgomery, Ala., declined to state a figure, but people familiar with the case said Palmer could receive as much as $5 million from the payment Infosys will make to the federal government, under a provision of federal false claims law.
One of India's largest technology outsourcing companies, Infosys employs 160,000 people in 30 countries, including about 15,000 people in the United States.
Competition for the H-1B temporary employment visas is intense among companies, here and in India, because there is a basic annual limit of 65,000 visas. This year the limit was reached within one week after the application period opened. In recent years Infosys and other Indian outsourcing companies have consistently been among the top recipients of H-1B visas. As a result of recent changes by Congress, large foreign companies like Infosys must now pay as much as $5,000 for each visa.
The business visitor visa, which is known as B-1, has lower fees, is quicker to obtain and not subject to the same numerical caps. But the B-1 visa is for foreigners coming to meetings and training sessions. It does not allow them to live or work in the United States. The workers continue to be paid at wage rates in India, which are much lower than wages in this country.
According to the court documents, from 2008 through 2011 Infosys "as a matter of practice" submitted false invitation letters intended "to deceive" immigration and consular authorities by indicating that Indian workers were coming for meetings when they were in fact being assigned to technology contracts here.
Infosys prepared "dos and don'ts" lists that advised Indian workers how to mislead American immigration authorities in B-1 visa application letters and interviews, according to the documents, to avoid the appearance they were coming to work. "Do not mention activities like implementation, design and testing, consulting, etc. which sound like work," was one of the instructions.
Infosys regularly misinformed immigration officials about where Indian workers on B-1 visas would travel in this country, to avoid a more onerous requirement of the H-1B visa that the company demonstrate that it was not undercutting prevailing wages paid to Americans in places where Indians would be assigned, the documents show. Infosys also rewrote some contracts with U.S. companies to conceal the fact that it was using B-1 visa holders to perform jobs that were "otherwise required to be performed by United States citizens or legitimate H-1B visa holders," according to the documents.
The prosecutors charge that Infosys regularly submitted the false information about its B-1 visas "for the purposes of increasing profits" by minimizing costs and gaining greater flexibility in moving Indian workers around the country.
In the most fully documented aspect of the case, federal investigators found "widespread failure" by Infosys to maintain accurate and up-to-date records, known as I-9 forms, for its Indian employees. Because of the faulty records, the company kept thousands of foreigners working here after their visas had lapsed.
A federal grand jury in Texas had been weighing criminal charges for visa abuse. Since prosecutors reached a civil settlement with the company, it is likely that they have agreed not to pursue criminal charges on the immigration issues.
During his long wait to see what the Texas prosecutors would come up with, Palmer, who lives near Montgomery, Ala., said he has wrestled with depression and has found himself in an unwelcome state of idleness and isolation. A technology program manager, he was drawing a paycheck from Infosys but could not work for them or anyone else. It was Palmer who first reported that Infosys was writing false invitation letters for B-1 visas for Indian employees, because he was asked to write one and he refused.
A low moment for Palmer came when the Alabama court ruled against his whistle-blower case, finding that the harassment he claimed was not sufficiently severe. But he said that with the help of Mendelsohn, "I concentrated on what I can control in my life, which is my attitude."
"My physical and mental health is good," he said.
Palmer said he turned down an early settlement offer from Infosys, because it would not have allowed him to continue cooperating with federal investigators.
"They wanted to buy my silence, and I wouldn't do it," he said. "I never did it for the money. I did it because they were violating the law."
© 2013, The New York Times News Service
