Infosys settles visa case with government for record $34 million

Correction: This story has been updated to reflect that while whistleblower Jack Palmer could receive a portion of Infosys’s $34 million settlement, it is unclear how much.


John M. Bales, the U.S. attorney for Texas' eastern district, announces a record $34 million settlement with Indian consulting giant Infosys to end a criminal investigation over visa fraud, in Plano, Texas, on Wednesday. (Nomaan Merchant/AP)

India’s Infosys announced a record $34 million civil settlement with U.S. authorities on Wednesday, resolving claims the information technology firm manipulated the American visa program to allow its skilled employees to avoid a burdensome application process and enter the country quickly.

The settlement is the largest ever paid in an immigration case, according to the Justice Department.

The tech giant, which employs more than 15,000 foreign nationals in the United States, was accused of securing business visas, known as B-1 visas, for its skilled workers to avoid the requirements of the work visa program, known as H-1B. It was also accused of billing clients for offshore work when its employees were based in the United States, according to government documents.

“Ultimately, these actions by Infosys cost American jobs and simultaneously financially hurt companies that sought to follow the laws of this nation,” David Marwell, a Texas Homeland Security agent, said in a statement.

While business visas are relatively cheap and easy to obtain, they have a limited application — for a short visit to attend a conference, for example. The H-1B work visas, meanwhile, allow foreign nationals to work in the United States for much longer. But there is a limited pool of those visas issued every year and more stringent eligibility requirements.

Infosys denied wrongdoing and said there is no evidence it defrauded the visa program. It has implemented new immigration practices and agreed to provide the government compliance reports, Infosys said. The company will also continue to correct errors in its immigration paperwork, a process it started before the government investigation began.

The company “strongly disagrees with the B-1 and H-1B allegations and any suggestions of systematic abuse,” Infosys’s spokesman Ken Montgomery said in an e-mail.

Wednesday’s settlement does not limit Infosys’s access to visa programs or eligibility for federal contracts, the company said.

The government probe was launched after a 2011 whistleblower suit filed by an Alabama employee, Jack Palmer, who said he witnessed visa fraud and was mistreated after reporting it. Palmer could receive a portion of the settlement, said Shamoil Shipchandler, the lead prosecutor in the case, though the exact amount is unclear.

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Amrita Jayakumar covers national startups, small business issues and entrepreneurship.

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