Infosys Accused of Visa and Tax Fraud to Avoid Hiring Americans

In February, Infosys Technologies Ltd employee Jay Palmer filed a lawsuit against his employer for willfully violating US visa and tax laws.  He claims that the company had instructed him to help them defraud visa laws so as they could bring foreign nationals into the US to work for them at a much lower rate of pay than what the company would pay Americans to perform the same jobs.  Additionally, since the workers were foreign nationals, they were paid by an overseas company in order for the company to avoid paying US income taxes.

The lawsuit, filed in the Circuit Court in Alabama, resulted in an investigation by US officials into the allegations.  Infosys, an India based company, denies the allegations and has said that they will cooperate with the investigation.

On Tuesday, Palmer, submitted a statement to the US Senate Judiciary Subcommittee on Immigration in which he spelled out accusations against Infosys for purposely violating US visa and tax laws.  According to several sources, Palmer claimed that he overheard Indian and US managers discuss how they would use the B-1 visas to bypass the H-1B visas which the US government has made harder to obtain.  Their goal was to bring unskilled workers from India into the US to do skilled jobs at a much lower pay scale.

By using the lower paid foreign nationals, Infosys regularly had the lowest bids on contracts for a number of companies.  Once they secured a bid, they would use the B1 visa to bring in workers from India and pay them Indian salaries instead of a US salary.  In Palmers allegations, he stated that Infosys would charge the client at the US rate of pay while only paying the workers the much lower Indian rate of pay.

Palmer states that in 2010 he was asked by Infosys to rewrite T&M contracts in order to turn them into FP contracts.  In a T&M (Time and Material) contract, the name and pay of every contracted worker is listed.  In an FP (Fixed Price) contract, no workers are named nor are their salaries listed as it is written as a single lump sum contract.  Rewriting the contracts to an FP contract allowed Infosys to charge companies lower American wage rates and then pay the even lower Indian wages to the foreign nationals and avoid paying taxes on them to boot.

Paul N Gottsegen, chief marketing officer for Infosys responded on Wednesday to the statement Palmer gave to the Senate subcommittee saying,

“There is not, nor was there ever a strategy, scheme, or policy by the company to use the B-1 visa program to circumvent the H-1B visa program.  The company did not have a practice of sending unskilled employees to the United States on B-1 visas to do the work expected of skilled individuals in the U.S. on H-1B visas.”

“We take very seriously our obligations under the law and specifically our responsibilities to comply with the immigration laws and visa requirements in all jurisdictions where we have clients.  Mr. Palmer is obviously intent on spreading his falsehoods about Infosys and our business practices as broadly as possible in order to advance his objective of getting as big of a payout as he can from the Company.”

Since making his case public, Palmer and his attorney claim that they have heard for over forty individuals from various other companies located in India that are also involved in H-1B and B1 visa fraud schemes.

If Palmer’s accusations are found to be true, I believe that the management involved in the visa fraud and tax violations be charged with felony criminal charges, the company be heavily fined and lose their business license to operate in the US.  Then and only then might this send a message to other companies that are using foreign nationals to do American jobs and violate visa and tax laws in the process to clean up their act or face the same punishment.