Imagine your worst compliance nightmare, then rest assured that folks (present and former) at Infosys have endured worse in the case of Palmer v. Infosys Technologies Ltd., Inc., M.D. Ala. 2:11-cv-217. Civil jury selection is set to begin August 20 in U.S. District Judge Myron Thompson’s courtroom in Montgomery, Alabama. Criminal grand jury proceedings are referenced in the civil filings, but the criminal investigation record is not open to the public. The claimant has asserted, in detail, a massive, corporate-directed visa fraud and tax evasion scheme, the purpose of which, he says, was to run our government’s H-1B visa blockade by certifying that Indian software developers, database administrators and other skilled IT professionals, assigned to work on client projects here, were but temporary, B-1 ”business visitors.” Material differences include the uncertainty, delay and cost of an H-1B visa (months, thousands of dollars, if granted), the ineligibility of a B-1 visa holder to engage in “local employment or labor for hire,” and their consequent exclusion from tax-withholding payrolls. A business visitor is supposed to come to the meeting here, then go home. According to the whistleblower in this case, Infosys forced him and others to write false, fill-in-the-blank ”welcome” letters affirming B-1 eligibility, to be offered to support B-1 visa issuance. Perhaps worse, Infosys allegedly coached the visa holders how to conceal and falsify the employment purpose of their travel to the United States. As the Ginsu knife guy always said, “But wait, there’s more!”
The whistleblower says that corporate HR and legal department managers admitted to him that the scheme existed and that it was illegal. Initally, they planned to investigate and clean it up. But they were over-ruled and either quit or fell in line, the whistleblower says. Some of those who quit are named as witnesses for the whistleblower. Both inside and outside Infosys counsel have been deposed and may be called to testify at trial. In short, says the whistleblower, his reports – first internally, then to the feds – started a battle among executives that the bad guys won.
While generally denying the visa fraud scheme, Infosys lawyers defending the suit are seeking to have it dismissed on grounds irrelevant to the alleged scheme. They say that, even if all those allegations are true, the whistleblower was not, due to his reports, subjected to sufficient, Infosys-directed retaliation to justify his legal claims. For example, Infosys says that the evidence fails to prove a material reduction of the whistleblower’s compensation or that the threats (including death threats) he received were made by an agent of the company in the course and scope of employment. Briefing of the defense motion concluded June 15, 2012. Unless the motion is granted entirely, it seems that Judge Thompson will begin jury selection on August 20.
Infosys, headquartered in Bangalore, India, is a global provider of tech-enabled business solutions. Many U.S. companies have relied on Infosys to staff critical projects with skilled people who are in very short supply here – such as Oracle software developers and database administrators. This case appears to be a morality tale about the stark, unappealing options of a whistleblower’s superior, but it also exposes the broken, dysfunctional H-1B visa program and its potentially catastrophic consequences for U.S. businesses.