Guest Worker Visa Fraud

Several years ago, a gentleman by the name of Jack Palmer blew the lid on the entire Guest Worker scam at InfoSys. Anyone who has worked hard to establish their career in SAP (or other IT areas) the old-fashioned way, through hard work and perseverance, owes this man a huge debt of gratitude. He exposed how the whole guest worker program can be abused as he presented evidence on how one of the biggest guest worker companies routinely committed fraud. His complaint even alleges how the company believed Americans were gullible for allowing them to get away with it.

In a statement to the Senate Judiciary Subcommittee on Immigration, Refugees and Border Security on Tuesday, Jay Palmer, the whistle-blower at Infosys, said the company “intentionally violated our visa and tax laws for the purpose of increasing revenues.”

Mr. Palmer accused Infosys of frequently violating U.S. visa laws and of staffing multiple client projects with illegal employees, including at Goldman Sachs, American Express, Wal-Mart and Johnson Control, among others [FN6].

To the SAP crowd, I should note that several of those big-name customers are SAP shops as well.

Mr. Palmer’s willingness to stand up to the guest worker fraud pushed the Department of Justice and the U.S. Attorney’s office to look into the practices of several guest worker firms that had “unusual” practices related to U.S. IT projects.

In my opinion, this case was a long time in coming. Potentially only serious prison time will discourage some of the routine abuses of the system.

(Please bear in mind that I could not care less about the number of guest workers as long as the fraud is stopped. Enterprise projects are hard enough already, and in my opinion the widespread fraud causes much of it. As a result, few companies realize the benefits of properly implemented enterprise applications.)

Judicial Summary of Palmer v. InfoSys Guest Worker Fraud Case

The following excerpt provides insight into the case:

“This case stems from allegations of visa fraud and retaliation. Palmer alleges that, while employed as an Infosys consultant, he uncovered evidence of fraud in the procurement of H-1B visas for specialty workers” [FN1].

Palmer says he began digging into how and why Infosys seemed to be bringing in large numbers of workers from its corporate headquarters in Bangalore, India, into the U.S.

Palmer says at first, most came over on H-1B visas. These visas are for people with specialized talents or a level of technical ability that can’t be found among American workers.

When asked if all the people had some special expertise that couldn’t be found in the U.S., Palmer said, “Absolutely not. Not even close. Many of them [are] what we call freshers. People that would just come over, whoever they could get to come over. Whoever got accepted for a visa.”

Many of the people brought in, in fact, didn’t know what they were doing at all, Palmer said. “There was not a project or program that I was involved in that we did not remove somebody because they had no knowledge of what they were doing,” he said.

…

When the U.S. State Department began to limit the number of H-1B visas, Palmer says Infosys began using another type of visa, the B-1. The B-1 is meant for employees who are traveling to consult with associates, attend training or a convention. But Palmer says the employees were brought in not for meetings, but for full time jobs.

Palmer said the jobs were in “Everything from coding software to testing software to fixing software to installing.”

…

Palmer said, “They could outbid everybody or underbid everybody on every contract (because they were paying less.) For example…if I’m gonna pay you $15,000 a year why would I pay an American or a legal worker $65,000 a year? It makes no – it’s just economics.”

And Palmer says the B-1 workers never paid U.S. taxes because they received their salaries from India.

“They’re basically a lot of times being paid on a cash card or a debit card where money was put in their account,” Palmer said. “And the fact is, is they’re just taking that money out and they’re never paying U.S. taxes.”

…

[O]ne of Palmer’s most serious allegations is that top company executives not only knew of the alleged fraud, but wanted to expand on it to increase profits. Palmer says during a 2010 meeting at Infosys’ corporate headquarters in Bangalore the practice was discussed with a group of executives, including a senior vice president.

Palmer told CBS News, “There [were] some conversations about how to increase the share price, which is – in America is the stock price. So it’s really about getting people over no matter what the cost or whatever. And you know, I think that’s the first time I heard the term, you know, ‘Americans are stupid.'”

…

According to Palmer, telling documents come from an internal Infosys website. One document appears to be a “do’s and don’ts” list that gives instructions on how to get B-1 visa requests by the U.S. State Department, telling managers not to mention things like work or employment on their applications or in interviews with U.S. Customs and Border Patrol agents.

When asked when he saw the information on the internal website what struck him, Palmer said, “Intent. Deliberate. Not even trying to follow the spirit of the law.”

When asked if the internal document on the website was an instruction guide on how to beat the system, Palmer replied, “Yes, in my opinion, absolutely.” [FN2]

Legal Grounds for Palmer’s Civil Lawsuit Against InfoSys

Jack Palmer’s civil legal claims and grounds for a lawsuit against InfoSys consist of the following [FN1]:

  • intentional infliction of emotional distress;
  • negligent hiring, training, monitoring and supervising;
  • legal misrepresentation; and
  • breach of contract.

Americans and foreign workers alike can follow Mr. Palmer’s example and help stop the blatant fraud in the system.

I believe additional grounds may have been available to sue for as well. For instance, depending on the evidence available, he may have been able to make civil or criminal legal claims for unfair and deceptive trade practices, RICO (Racketeering and Corrupt Organization), Mail Fraud, etc.

There may be Corporate and Personal Liability for Fake Consultants, even by those companies who hire outside system integrators, if an employee indicates that the system vendor uses unqualified, fake, or fraudulent consultants. The key is in raising the concerns about the frauds within the organization.

Ongoing Criminal Investigations for Guest Worker IT Firms

As I mentioned, InfoSys is not alone in this. InfoSys is just the tip of the iceberg, as a massive amount of Visa Fraud still occurs today. How many more people will stand up and be counted to end the widespread, ridiculous fraud in the IT space?

While a few media reports exist, few if any of them clearly reference that the criminal investigations going on, as well as Palmer’s civil suit for damages. The extensive excerpts from CBS News deal with InfoSys, but several other guest worker programs have gone under criminal investigation as well by the U.S. Attorney’s office in the Eastern District of Texas:

  • Vision Systems Group Inc. (IT Guest Worker Visa Fraud) [FN3]

The companies that are the subject of this investigation have asserted that the foreign workers have been brought to the U.S. to fill existing vacancies. However, the companies allegedly have not always had jobs available for these workers, thereby placing them in non-pay status after they arrive in the United States. In some cases, the foreign workers have allegedly been placed in jobs and locations not previously certified by the Department of Labor, displacing qualified American workers and violating prevailing wage laws.

The companies and foreign workers have allegedly submitted false statements and documents in support of their visa petitions. The false statements and documents were mailed or wired to state and federal agencies in support of the visa applications. The companies are suspected of visa fraud, mail fraud, wire fraud, money laundering and conspiracy.

  • Mumbai-based Larsen & Toubro (IT Guest Worker Visa Fraud) [FN4]

[The Complainant] Pai’s job in human resources at Larsen & Toubro in New Jersey adds a new dimension to this case.

In her role as human resources manager, Pai was required to help process visa-related documents. She alleges that immigration fraud “appeared to be rampant” at the company, according to the lawsuit.

This lawsuit is similar to one filed against another major Indian firm, Infosys.

While I do not consider myself pro-union, I can certainly agree with much of what the report from the AFL-CIO has uncovered related to guest worker fraud. They have done extensive research in their over sixty-page report entitled “Gaming the System 2012” [FN5].

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[FN1] These are quotes or excerpts from the Judge’s Order in Palmer v. InfoSys order denying arbitration, Docket #10, November 9, 2011 pages one to two (https://www.iitrun.com/1/Palmer-Infosys-10.pdf).

[FN2] CBS News – Whistleblower calls out IT giant over U.S. jobs, April 12,2012. http://www.cbsnews.com/8301-505263_162-57412896/whistleblower-calls-out-it-giant-over-u.s-jobs/ (retrieved June 10, 2012)

[FN3] http://www.desicrunch.com/Wiki/Default.aspx?page=Abuse%20and%20Fraud,%20H-1B%20and%20L-1,%20for%20article (retrieved June 10, 2012)

[FN4] Computer World online. ‘Massive’ visa fraud alleged in lawsuit against Indian firm, April 4, 2012. http://www.computerworld.com/s/article/9225847/_Massive_visa_fraud_alleged_in_lawsuit_against_Indian_firm (retrieved June 10, 2012)

[FN5] Gaming the System 2012: Guest Worker Visa Programs and Professional and Technical Workers in the U.S., AFL-CIO, Department for Professional Employees. http://dpeaflcio.org/wp-content/uploads/Gaming-the-System-2012-Revised.pdf (retrieved June 10, 2012)

[FN6] Wall Street Journal Blogs. http://blogs.wsj.com/indiarealtime/2011/07/28/infosys-employee-testifies-on-alleged-visa-fraud/ (retrieved June 10, 2012)

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