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Infosys ran 'unlawful' visa scheme, U.S. alleges in settlement

Patrick Thibodeau | Oct. 31, 2013
Infosys to pay $34M in settlement, but disputes all claims

The U.S. alleges that offshore outsourcing giant Infosys violated visa laws to increase its profits, reduce visa expenses and avoid tax liabilities, in a settlement announced today.

But the allegations, and the evidence the government says it has to back them up, will remain just that, allegations. Instead of pursuing a court case, the U.S. will accept a $34 million settlement payment from Infosys.

That's how the government typically handles visa violation claims, but in this instance, the government said it is the largest settlement ever reached.

Infosys denies any wrongdoing in the agreement, which is signed by both parties.

This settlement is a fraction of Infosys' 2012 revenues of $6.99 billion.

The government action involves the Bangalore, India-based company's use of the B-1, or business visitor visas, for work that allegedly required H-1B visas.

Generally, a B-1 visa is intended for short-term visits, such as attending a convention or negotiating a contract. It is relatively easy to get and isn't subject to any of the caps, fees, or wage requirements that govern H-1B visa use.

Infosys, which applies for thousands of H-1B visas every year, "unlawfully" supplemented its workforce with B-1 visa workers, according to the U.S. complaint. Infosys wrote letters to U.S. officials with "false representations regarding the true purpose" of a B-1 worker's activities. It would tell officials that a worker was coming in for discussions, when the real reason was to do work that required an H-1B visa, such as programming. Visa applicants were also told what to say to avoid suspicion, the government alleged.

"We will not tolerate actions that mislead the United States and circumvent lawful immigration processes, whether undertaken by a single individual or one of the largest corporations in the world," said U.S. Attorney John Bales for the Eastern District of Texas, which conducted the investigation. "The H-1B and B-1 visa programs are designed and intended to protect the American worker; and we will vigorously enforce the requirements of those programs," he said, in a statement.

In the settlement, Infosys denies any wrongdoing and says its B-1 visa "was for legitimate business purposes and not in any way to circumvent the requirements of the H-1B program."

The company reiterated that position in a statement Wednesday, and said it "disputes any claims of systemic visa fraud" and other claims and said they are "untrue and are assertions that remain unproven."

Infosys says that "only .02% of the days Infosys employees worked on U.S. projects in 2012 were performed by B-1 visa holders." But this date, 2012, was after the government probe began in 2011. Infosys has not disclosed the size of its U.S. workforce, or the percentage of its workforce on visas.


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