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US probe on alleged visa fraud may land Infosys in serious trouble
Wednesday, 25th May 2011
Infosys, the erstwhile poster boy of Indian IT, may land in serious trouble.

An employee Jack Palmer's complaint that the company was �sending lower-level and unskilled foreigners to the United States to work in full-time positions at Infosys� customer sites in direct violation of immigration laws� is now under investigation by various US authorities. He filed the complaint in Alabama, a Texas court has issued sub poena and according to Mint the US department of justice (DoJ) is also showing interest in the case. Then ofcourse, there are politicians like senator Charles E. Grassley, who are playing to the domestic audience, who think outsourcing succeeded Soviet union as evil empire.

Jack Palmer filed a civil suit. But these investigations may lead to slapping of criminal charges as well - for violating US immigration laws.

In a recent filing before the US stock authorities, Infosys admitted that the investigations may adversely affect its operations. The company also disclosed that it has 10,100 persons on H-1B visas and 2,200 employees on L1 visas in the US, excluding Infosys BPO and wholly owned subsidiaries.

A few critics of Infosys say if Palmer's complaint is false, there is no reason for Infosys to worry as it can easily prove that B1 visas were not abused. But its SEC filings show that there could be some substance to his charge. Why would Infosys fear adverse impact, if it has not violated any US law?

But many also point out that given the short-term nature of the B1 visa, you cannot use it to permananetly staff onsite projects. There are cases of really small, unlisted firms resorting to it, that is, sending people to the US on B1 visas and getting them endlessly extended. But are large Indian firms doing it as well? The US investigation will hopefully bring it out. But the initial assessment is: unlikely, especially when H1B visas were easily available and Indian companies have never shied away from spending on them.


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