Report: Infosys Ltd ADR (INFY) To Make $35 Million Settlement With U.S. Government Over Visa Issues

Posted Oct 29, 2013

Infosys Ltd ADR (NYSE:INFY), the India-based outsourcing giant, is going to settle with the U.S. government as part of the largest immigration fine ever levied.  An investigation determined that Infosys illegally placed workers on visitor visas at corporate clients in America.

The Wall Street Journal reported today that the fine is approximately $35 million.  The probe was conducted by the Department of Homeland Security and the State Department.  Infosys was able to bring a large number of their employees to the U.S. for long-term stays by using B-1 visas instead of expensive H-1B visas.

B-1 visas are intended for short stays and can be bought for only $160.  The H-1B visas allow the holder to stay in the U.S. for as long as three years.  The U.S. issues only 65,000 H-1B visas per year and it can cost up to $5,000 per person.

The case settlement is expected to be announced tomorrow as part of a press release issued by The U.S. Attorney’s Office for the Eastern District of Texas.  Infosys put aside $35 million to settle the case and cover legal costs.

The investigation began in 2011 when a lawsuit was filed by an Infosys employee named Jack Palmer.  Palmer sued Infosys for harassment and breach of contract.  Palmer said that his managers retaliated against him after he raised concerns that Infosys was violating immigration laws in the U.S.

Palmed attended meetings at the Infosys headquarters in Bangalore where he had to put together letters that support B-1 applications that claims employees were coming to America for meetings intend of working at a job.  Palmer was instrumental in the government probe.