Infosys Faces Grand Jury As Visa Probe Broadens

A federal court has issued a subpoena to Infosys that seeks information on the Indian outsourcer's use of the B-1 visa.

By Patrick Thibodeau
Wed, May 25, 2011

Computerworld — Indian offshore giant Infosys (INFY) is facing a federal grand jury probe over the use of B-1 visas by its workers, an inquiry that was touched off by a lawsuit filed by a U.S. employee of the company.

Infosys, which relies heavily on visa holders to deliver outsourcing services to U.S. companies, announced this week a subpoena issued by the U.S. District Court for the Eastern District of Texas "requires us to provide information to the grand jury regarding our sponsorships for, and uses of, B-1 business visas."

The company said it plans to cooperate with the grand jury investigation.

Infosys filed notice of the grand jury investigation on Tuesday with the U.S. Securities and Exchange Commission.

A B-1 visa is a business visitor visa that is intended for short-term projects, such as attending meetings and conferences.

The B-1 visa doesn't include the prevailing wage and federal tax requirements that an H-1B visa has.

Separately, U.S. Sen. Chuck Grassley (R-Iowa), who has been asking his own questions about the use of the B-1 by offshore outsourcing companies, said Wednesday that it "appears the B-1 visa program has become a subterfuge for companies wanting to avoid the cap and wage requirements of the H-1B visa."

Grassley released the statement after receiving a letter from a U.S. State Department official acknowledging problems with the visa.

The grand jury probe stems from a lawsuit filed against Infosys earlier this year by Jay Palmer, an Alabama resident and a principal consultant at the outsourcer. Palmer's lawsuit, originally filed in an Alabama state court and then moved to the federal court, alleges that he was harassed at work after refusing to participate in a plan to use workers holding B-1 visas for tasks he contends requires an H-1B visa.

Along with filing the lawsuit, Palmer and his attorney, Kenneth Mendelsohn of Montgomery, Ala., have been meeting with officials of the U.S. Department of Homeland Security and State Department. Mendelsohn said Palmer has been cooperating with federal officials for several months.

Mendelsohn, in an interview, said the grand jury investigation is a based on information that Palmer furnished to federal officials.

The fact that a grand jury is investigating the B-1 visa "validates everything Jay has been saying," said Mendelsohn.

In an April letter to DHS and the State Department, Grassley sought a "thorough review" of how B-1 visas are issued.

Grassley's office today released the State Deptartment's response to his letter.

In the letter to Grassley, Joseph Macmanus, an acting assistant secretary for legislative affairs at the State Department, said that the Infosys litigation "appears to involve misrepresentation in the visa application, rather than a misapplication of visa law." He did not elaborate further.

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