Jack B. Palmer, an American employee of Infosys, brought a whistle-blower lawsuit in Alabama in February 2011, saying that he had been punished and sidelined after he reported witnessing widespread visa fraud.
By JULIA PRESTON NYT Published: October 29, 2013
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 American 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 American 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 United States 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 Tuesday in a statement. The company 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, Mr. 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,” Mr. Palmer said. “It was a question of right and wrong, following my conscience and following the law.”
Infosys strongly rejected Mr. Palmer’s claims and fought his whistle-blower case, which was dismissed last year by a federal judge in Alabama.
But the time Mr. Palmer has invested is likely to be worth it. Mr. Shipchandler and Mr. Palmer’s lawyer, Kenneth Mendelsohn of Montgomery, Ala., declined to state a figure, but people familiar with the case said Mr. 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.
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