Largest Civil Settlement in Immigration Case: Department of Justice and Infosys Settle Two-Year Investigation for $34 Million

The Department of Justice has announced that after an investigation of more than two years Infosys Technologies Limited, Inc., an India-based technology outsourcing company, has agreed to pay $34 million in a civil settlement. This is the largest settlement of its kind in an immigration case involving the hiring and relocation of foreign nationals with temporary status from overseas into the United States. With the civil settlement, Infosys has avoided criminal penalties and other charges.

Two-Year Government Investigation Leads to Record-Breaking Civil Settlement

For the last two years, and prior to the ground-breaking civil settlement, Infosys was under investigation by the U.S. government. The Infosys investigation started in 2011 based on allegations brought by an employee based in the United States that the company was improperly bringing workers from India under the B-1 business visitor visa category instead of the H-1B work visa category. In 2011, Senator Charles Grassley also raised concerns to the Department of State and Department of Homeland Security regarding the B-1 business visitor category and questioned these government agencies on how the B-1 visa was being monitored and verified by the overseas consulates, especially those consulates in India. 

As background, the B-1 business visitor visa category is not a work-authorized visa category. The B-1 business visitor visa category is used for business visitors to come into the U.S. on behalf of a foreign company for a very limited period of time to engage in business activities, such as attending business meetings and conferences. This visa category does not allow for hands-on work or services to be provided by the business visitor while in the United States. If foreign nationals will be coming into the U.S. to provide hands-on work or services, they must have the appropriate temporary work visa, such as an H-1B specialty occupation visa or an L-1 intracompany transferee visa.

The B-1 business visitor visa is easier to obtain and less costly than other visa categories. B-1 visas are issued directly by the consulate in the foreign national's home country. Specific approvals do not need to be first obtained in the U.S. through an approval by U.S. Citizenship and Immigration Services. Typically, the B-1 application includes a limited fee, an on-line application form and a letter from a U.S. company describing the length of time for the short-term visit in the U.S. and the nature of the business meetings and activities in the U.S. Once approved, the B-1 visa stamp in the foreign national's passport can be valid for up to 10 years. Although the visa stamp can be valid for up to 10 years, the B-1 visitor's stay is typically limited to less than six months upon admission into the U.S., with Customs & Border Protection sometimes limiting the period of stay to 30 or 60 days, depending on the type of visit.

As outlined below, the court documents released as part of the civil settlement alleged that Infosys used the B-1 visa category to bring foreign workers into the U.S. to perform hands-on work instead of using H-1B work visas or having U.S. citizens perform such work. In addition to the B-1 allegations, these documents also reflected numerous I-9 violations by the company. Many U.S. government agencies were part of the investigation of Infosys, including the Department of Justice, Department of State, Diplomatic Security Service, U.S. Immigration and Customs Enforcement's (ICE) Homeland Security Investigations (HSI), and U.S. Citizenship and Immigration Services.

Settlement Reached for $34 Million – Largest Immigration Payment on Record

With the settlement agreement reached between the U.S. government and Infosys, Infosys is required to make a payment of $34 million to the United States. In addition to the payment, the Department of Justice is also requiring Infosys to undertake additional immigration compliance measures, including additional I-9 auditing and reporting requirements for the number of B-1 visas used, as well as completion of detailed invitation letters for such B-1 business visitor visas.

As part of the civil settlement, the Department of Justice released an official statement regarding the settlement and the allegations against Infosys that led to the settlement. In its statement, the Department of Justice emphasized the following allegations:           

• Infosys used B-1 visa holders to perform jobs that involved skilled labor that were instead required to be performed by United States citizens or required legitimate H-1B visa holders.
• Infosys submitted "invitation letters" to U.S. Consular Officials containing false statements regarding the true purpose of a B-1 visa holder's travel in order to deceive U.S. Consular Officials and secure entry of the visa holder into the United States. These letters often stated that the purpose of travel was for "meetings" or "discussions" when the true purpose was to engage in activities not authorized under a B-1 visa.
• Infosys directed B-1 visa holders to deceive U.S. Consular Officials, including specific instructions to avoid certain terminology, to secure entry of the visa holder into the U.S. Infosys created a "Do's and Don'ts" memorandum that it provided to foreign nationals entering the U.S. on a B-1 visa that included the following directions: "Do not mention activities like implementation, design & testing, consulting, etc., which sound like work"; "Also do not use words like, work, activity, etc., in the invitation letter"; and "Please do not mention anything about contract rates."
• Infosys told its foreign nationals to inform U.S. Consular Officials that their destination in the U.S. was the same as that provided in the Labor Condition Application, notwithstanding the fact that Infosys knew that the destinations had changed.
• Infosys wrote and revised contracts with clients in order to conceal the fact that Infosys was providing B-1 visa holders to perform jobs that involved skilled or unskilled labor that were otherwise required to be performed by U.S. citizens or required legitimate H-1B visa holders.
• Infosys concealed the fact that B-1 visa holders were performing jobs that involved skilled or unskilled labor that were otherwise required to be performed by U.S. citizens or required legitimate H-1B visa holders by billing clients for the use of off-shore resources when, in fact, work was being performed by B-1 visa holders in the U.S.
• Infosys failed to maintain I-9 records for many of its foreign nationals in the United States in 2010 and 2011 as required by law, including a widespread failure to update and re-verify the employment authorization status of a large percentage of its foreign national employees.

See Department of Justice, Press Release, October 30, 2013

Infosys Settlement – Why This Is Important for U.S. Employers

With such a large and record-breaking settlement against Infosys after a long two-year investigation, companies both within and outside the U.S. must take notice that the U.S. government is serious when immigration laws and regulations are not followed with the movement and hiring of foreign nationals in the U.S. Not only is the U.S. government protecting the U.S. workforce, it is ensuring that all applicable laws are followed and used fairly by all involved with the visa process. Companies must also be diligent in their I-9 records and compliance. This case is a prime example of government enforcement and compliance through the I-9 audit process.

In addition to overall compliance and diligence by companies with their immigration paperwork and transfers of foreign nationals into the U.S., there could be changes in the B-1 process at the U.S. consulates in India. As noted in the settlement, detailed invitation letters are required to be used and presented by Infosys. Companies applying for B-1 business visitor visa application at the U.S. consulates in India and other countries must also follow such an approach — if they are not already doing so.

We will certainly learn more over the coming weeks and months if the consulates in India will be enhancing or changing their process for B-1 business visitor applications. Whether related to the Infosys investigation or not, there has also been a significant uptick in scrutiny of visa applications other than B-1 applications at the U.S. consulates in India. Such heightened scrutiny has included L-1 intracompany transferee and H-1B work visa applications.

FaegreBD will provide a further update on these and other visa processing issues at consulates in India after an upcoming visit to India by firm immigration attorneys Sarah Kilibarda, Elaine Kumpula and Peter Yost, who will meet with consular officials to discuss current visa processing procedures and timing, as part of their travels to India in early November.

This Legal Update was quoted in a December 2013 Compliance Week article.