Infosys Suddenly Seems to See Crossing Feds Is a Bad Idea

Don Tennant

A group of 64 companies and organizations on March 22 sent a letter to President Obama to express concern about the way the U.S. government is handling the L-1 visa program. Conspicuous for its absence from the list of signatories was the company that's under criminal investigation by federal authorities for visa and tax fraud: Infosys.


L-1 visas are used by international companies with offices in the United States and abroad for intracompany transfers of foreign personnel for assignments in the United States. The signatories of the letter complained to President Obama that "American job growth and the U.S. economy are being harmed by unprecedented delays and uncertainty surrounding L-1 visas for valued employees." Among the signatories are the other two top Indian IT outsourcing services providers, Wipro and Tata; and U.S. IT services heavyweights Accenture, Cognizant Technology Solutions (which has its roots in India), CSC, Deloitte, EMC, Hewlett-Packard, Intel, Microsoft, Oracle and Texas Instruments.


One paragraph of the letter in particular is absolutely dripping with irony:

A significant concern is that an inconsistent and improperly narrowed definition of "specialized knowledge" is being used by the agencies to determine which employees qualify for L-1B status. Specialized knowledge may be best summarized as an advanced expertise about something a company values in its ability to do business. L-1B visas for specialized knowledge staff are an important tool in allowing companies to manage their workforce and intracompany talent pool without regard to borders. Appropriate use of the L-1B classification by careful and responsible employers plays a direct role in supporting job creation and job retention in the United States, as well as expanding advanced manufacturing, increasing exports, and encouraging foreign direct investment.

Of course, it is the rampant abuse of what constitutes "specialized knowledge" that prompted U.S. Citizenship and Immigration Services to crack down on the abuse and make it more difficult for these companies to obtain H-1B and L-1 visas. For years, some companies that are dependent on these visas have shamelessly displaced U.S. employees by bringing in cheaper foreign workers with claims that these workers have specialized knowledge that isn't available here. Now that the government is finally cracking down on that outrageous abuse, we're seeing the complaint that the government has "improperly narrowed" the definition of "specialized knowledge." Yet it was the improper (and illegal) broadening of the definition that has created the circumstance these companies find themselves in now.


It's fascinating that Infosys isn't on the list of signatories, given the fact that historically, it has been at the forefront of lobbying efforts like this. The company has maintained a perplexingly cavalier attitude toward the U.S. government's criminal investigation of its visa abuse, so there has been no indication that Infosys has any problem with taunting U.S. authorities. That cavalier attitude was epitomized by comments recently made by Infosys CFO V. Balakrishnan, as I reported in my Feb. 7 post, "Infosys CFO Publicly Claims No Visa Violations, Despite Company's Internal Admission." Remember this?

We are very clear that we have not violated any of the rules. We believe we have a strong case so the whistle blower case is not a visa case, it is a whistle blower case that will come up for trial somewhere in August. We have to fight it out through the legal process. The other one is a Department of Justice Investigation we are cooperating with them, we are giving all the data. We believe, we have a strong case and see how it goes.

I've heard through the grapevine that the federal authorities who are conducting the criminal investigation, and who have amassed a mountain of incriminating evidence against Infosys (thanks in large part to the cooperation of Jay Palmer, the Infosys employee who blew the whistle on Infosys' illegal activity), were absolutely livid when they saw the video of Balakrishnan making those comments. The federal investigators have met with Infosys' attorneys a couple of times in recent weeks, so it's probably safe to assume that Infosys now has a better sense of exactly how much hot water it's in. If that's the case, it's unsurprising that Infosys would want to avoid doing anything that would be unappreciated by government authorities.


I spoke on Sunday with Palmer's attorney, Kenny Mendelsohn, and found that he was also intrigued by Infosys' conspicuous absence from the list of signatories:

I found it very curious. Infosys has always been in the middle of these efforts, and they've always had kind of a joint effort with companies like Wipro. Exactly why they're not among [the signatories on this letter], I don't know. I can only speculate that either Infosys doesn't want to push their luck with everything that's going on with the federal investigation and the possible actions against them, or the other companies don't want Infosys in with them, with all the baggage and problems they have.

In any case, it's worth noting that copies of the letter were sent to the Secretary of State and the Secretary of Homeland Security. Those are the two agencies that are leading the criminal investigation of Infosys. If Infosys had signed the letter, let's just say it would have been very bad form. Maybe - just maybe - Infosys is starting to get it.

Add Comment      Leave a comment on this blog post
Mar 26, 2012 1:49 AM R. Lawson R. Lawson  says:

"Specialized knowledge may be best summarized as an advanced expertise about something a company values in its ability to do business."

It sounds like they want to define "specialized knowledge" as any job they want to import a foreign worker to do.

The word "specialized" is entirely useless when it comes to insuring that temporary foreign workers are filling jobs where a shortage exists.  Companies also want to define a shortage of any job, at any salary, of any combination of skills, that an American is unwilling or unable to bring to bear.  So if Americans are not willing to work for less than market wage they would like to say that a shortage exists.

Corporations simply cannot be trusted when it comes to filling or defining shortages.  We need to measure that a shortage does exist and I believe that is very easy to do so long as the right data is being collected by the BLS.

In my mind a "shortage" exists when:

- Salaries of a particular skillset have risen significantly (> 10%) over the last 12 months.

- Unemployment in a particular skillset remains low (less than 2%)

- Total employment in a particular skillset has risen significantly over the last 12 months (> 10%)

- Overall employment in the field remains low (less than 4%>

In our case we have stagnating salaries, record unemployment in IT, reports that half of the fortune-1000 IT jobs will be sent offshore before 2016, and reports of wide-spread fraud.

Enough is enough.  If the government answers the demands of this letter, it proves that crony capitalism is alive and well.

Mar 26, 2012 9:13 AM hoapres hoapres  says:

We have a shortage of people willing to work 168 hours a week and only get paid for 40 hours at $8 an hour.

Mar 26, 2012 10:34 AM George George  says:


In the middle of Feb, on one of your blogs, you advised me to bet $1000 that Infosys legal issue will be covered by major media outlets in one month.  Obviously, it has been well over a month. Thankfully, I chose to ignore your advise.

Mar 26, 2012 11:14 AM ITman ITman  says:

The visa issues are obviously hitting all IT manpower companies (the so-called "bodyshops" more than the other companies in the list).

Another article by Don Tennant here mentioned increased activity in Australia by Infosys and TCS.  These may be countries where the visa regime is more permissive and the kind of practices that are coming under the scanner in USA may escape scrutiny under different regimes.  As a result of all this, I think I will predict a trend of increasing IT labor flow towards Australia, South East Asia and Europe at the expense of North America.

Mar 26, 2012 12:12 PM jake_leone jake_leone  says:

It's likely that the abuse of l-1, b-1, and H-1b is a case of the looter mentality.  A case of businesses, seeing that others are skirting or scoffing the law, and can't help but join in.

If the Feds are successful in getting their tax money from InfoSys, then there are billions more to be had.

I guess InfoSys is a test case and an 8-mile wide red flag on the abuse that is going on of our Public Visa system.

Look I started out in game testing, studied Unix systems for about a year at the local community colleges, and then landed a business software test position.  From there I studied programming and authored several programs in use by former and current companies. 

When companies bring in people using the L-1 or B-1 to fill Unix Test positions, they are blocking people such as myself from becoming computer programmers.  And Unix Admin is not high end stuff, in six months you can learn enough to do script testing, automated testing, Unix Administration.  And from there you can jump into programming.

All that with just an American Highschool Public education, not bad, and says a lot more than people (mostly snobs who don't like paying property taxes, Atherton types, Meg Whitmans (who never voted)) want to admit.

Mar 27, 2012 12:04 PM Don Tennant Don Tennant  says: in response to George

Yeah, my bad. Stuff happens. Be charitable and give it just a little more time.

Mar 28, 2012 6:03 AM Richard Richard  says: in response to R. Lawson

Trouble brewing for Indian IT

Mar 28, 2012 6:25 AM R. Lawson R. Lawson  says: in response to Richard

Richard, are you able to post a comment to economic times?  I am not.  Not sure why not, but suspect that they either don't appreciate my views on the H-1b or that they block all American traffic.  Maybe it's my browser (Chrome)... not sure.

Try posting something pro-H-1b or neutral and see what happens.  Want to make sure it's not a technical issue before I lambast them for censorship.

Mar 29, 2012 9:22 AM Indian Tatti Indian Tatti  says: in response to R. Lawson

Register and then post.

Mar 30, 2012 11:27 AM kiprn kiprn  says: in response to Richard

No fee hike and the companies bounce back

Some would have made good money both on the downside and upside.

Apr 1, 2012 10:44 AM Pro Pro  says: in response to kiprn

Are they travel agencies or tech companies???

Apr 3, 2012 1:25 AM Truth Truth  says:

Law suit against TCS in America

America should shut down all these top Indian ITs operating shop here. Crooks like Infosys, TCS, Wipro, Cognizant should be shut down. That day is soon coming!

Apr 3, 2012 6:40 AM Dolores Dolores  says: in response to Truth

Some progress in the Lief Cabraser suit against Tata, finally.

Apr 3, 2012 11:07 AM Richard Richard  says: in response to Truth

LOL, I was about to post this article and two people have already done so far. Nice...Seems we are all alert

Apr 3, 2012 11:15 AM HUH HUH  says:

L&T now

Apr 3, 2012 12:07 PM ITJob ITJob  says: in response to Richard

Nope...posting links from other websites is not the alertness required and it serves nothing.

Still this is the hot link according to me...because US is going welcome (1st step application) another 65k new immigrants on work visa from today.

Apr 3, 2012 12:44 PM Richard Richard  says: in response to ITJob

Understand that new H1Bs are getting filed this week. But the topic was related to the tax fraud commited by TCS. It has nothing to do with new H1Bs. The very purpose of this blog is to track the fraudulent activities commited by Indian IT companies, including Infosys.

Apr 4, 2012 12:29 PM justin justin  says: in response to ITman

Good, because we have AMERICAN IT COMPANIES who use legal methods and pay practices to do the same (but better) work than these body-shoppers.  no wonder Infosys and Tata work FOR AMERICAN companies, not vice versa.  They're nothing better than our little low paid programmers and always will be.  For the real brains, check out IBM, Accenture, HP, etc.  They know how to run outsourcing business.  But Infosys and Tata and Wipro win contracts because they underbid the project with cheap Indian labor who have entered with flimsy, at best, visa status.  The election won't matter, because this issue will come to a head before November.  There's free press and it's just one atom bomb disclosure away from being - POOF!  And by the way, this isn't just "imagining".  This is written by someone who knows.  Be scared, Infosys, CFO, and HR Execs, be very scared.  We are coming for you next.

Apr 8, 2012 1:20 AM Victim of Infosys Victim of Infosys  says: in response to justin

Something I want to bring to light.

1.) It is the only company I have seen which uses their offshore resources for other for other clients. Internally they are very open about it. It happened within my team. When I escalated to Infosys higher management, I came to know that in one of the case for the same client, they kept on charging the client for 3 months even after the person was out of Infosys.

2.) They cheat at the time of recruitment by verbally commiting something else for the roles, responsibilities and skill set.

3.) They cheat for project allocation. I was relocated to for architect role, but later on the project turn out to be production support.

4.) Task assigned for one of the project to bitch about work getting done by IBM at the client place.

Harassment to new employees is quite open. BU heads are unable to maintain any discipline. I am still unable to come out of the mental torchure I have been though. I don't know if can file any kind of law suit against them.

Apr 9, 2012 8:55 AM George Martin George Martin  says:

The L-1a visa is meant to be used for the intra-company transfer of managers into the US.  This means departments heads, people with high executive authority.  The L-1b visa is a vaguely worded provision for professions with "specialized knowledge" of a business.

Some US companies are contracting with outsourcing body-shops like TCS which bring large numbers of IT workers into the US with L-1 visa sponsorship as low-cost, docile, indentured servants.  The L-1 visa holders end up in the clients' IT departments performing low-level production support and programming.  They are also used to transfer work overseas to the outsourcing companies' facilities in India.  By no stretch of the imagination can most of these L-1 visa be called "managers".  Nor do they possess any real specialized knowledge of the business they are supporting.

Apr 9, 2012 11:57 AM Piddi Piddi  says: in response to George Martin

L1A is for manager and L1B is for non-managers. Company uses L1 as the resources can't change employer once he or she is in US. L1 costs less, and company can pay them less than H1 employee. Critieria for L1A is loosely defined or may be Indian companies are able to abuse it as well. Even TLs have been seen to get L1A. The additional advantage is that their Green card can be filed in EB1 category and then it is matter of hardly 6 months to get Green Card.

People have started realizing the hype, how these companies abuse the system, the quality of programmers they bring in and the way they do the business. They are following the path of SATYAM Computers (Infosys competitor which doomed because of their corrupt practises).

Apr 10, 2012 5:20 AM Richard Richard  says: in response to Victim of Infosys

Poor soul...I am so sad after hearing all this and it is so sad that the government allows such corrupt companies to flourish. There is nothing wring with offshoring but comprosing quality to such an extent is highly deplorable. Time to take stern action against Infosys and show it the prison

Apr 13, 2012 10:45 AM Themis Themis  says:

We all know that these Indian companies haven't respected our laws. It is time to make them accountable and our judicial system needs to serve them the biggest fine in the history of America. America needs to ban them for doing business in America and they need to arrest those who have forged documents. They are the biggest threat to America and they have implemented a discriminational model in the USA. The metaphor is that American people invite them for dinner and they will take American's houses. Indians hire and promote Indians and it is becoming a mafia. They have became well organized and followed the same blueprint. Do we know if the Indian government and several Indian greedy business people are involved in this scheme?

The biggest blame should go to  American companies and to the politicians who get bribes from the Chamber of Commerce. It is time to put the house in order


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