Infosys Under Federal Investigation in Visa, Tax Fraud Case

Don Tennant

If Infosys Technologies was sweating bullets before, now it must be sweating cannon shells. According to Kenny Mendelsohn, the Alabama attorney who filed the lawsuit against Infosys alleging visa and tax fraud, Infosys is now under investigation by U.S. federal authorities.


Mendelsohn told me that his client, Jay Palmer, the Infosys employee who blew the whistle on the Indian outsourcing services provider, is cooperating with federal authorities as part of the investigation. Mendelsohn said he was not at liberty to disclose which federal authorities are conducting the investigation, or how they became involved in the case. He did confirm that Infosys is aware of the federal investigation.


Mendelsohn noted that after it became aware that Palmer was cooperating with federal investigators, Infosys demanded that Palmer surrender his laptop, and threatened to fire him if he didn't comply:

[Palmer] got a letter, basically setting out policies regarding his laptop. They demanded it, and I have advised him not to give it to them. I don't think it is being requested in good faith, or related to his whistleblower complaint. And I don't believe it's being asked for in good faith as it relates to this lawsuit. [The attorney representing Infosys in the case] Jay St. Clair has a right to request, under the rules of procedure, state or federal, that we provide him with the documentation that we have. A lot of this documentation has already been provided to the [Infosys] Whistleblower Team, to [Infosys] Human Resources, and to [Infosys corporate counsel] Jeff Friedel. The fact that they want his laptop is concerning to me. If that was important, then I would have thought that the Whistleblower Team would have asked for the laptop back in October when he made this claim. They didn't ask for it until after they became aware that Jay was cooperating with federal investigators. So it makes me concerned about their motive behind wanting that laptop, and I have a serious problem with them threatening to fire him if he doesn't provide them with that laptop.

Separately, in a development unrelated to the federal investigation, Infosys has filed documents to move the case from the Circuit Court of Lowndes County, Ala., to federal court. Mendelsohn said he had anticipated the move:

To me, it makes no difference-I'm happy to be either place. Actually, the federal courthouse is closer to my house than the Lowndes County one here in downtown Montgomery. It's no big deal-the law's still going to be the same. My guess is that for whatever reason, [Infosys] didn't feel comfortable having this lawsuit brought in Lowndes County, Alabama. Why they didn't want a Lowndes County jury hearing it, I don't know. But the federal judges are great judges here, and we'll still be getting a jury -- instead of all Lowndes County people, there'll be some from Lowndes, some from Montgomery, Autauga County, Elmore County. It's just a wider-spread jury panel.

I asked Mendelsohn if moving the case to federal court has any impact on the likelihood of a settlement. His response:

I don't think it has anything to do with settlement. It doesn't affect me in any way. The rules of law are that when you're in federal court on a diversity case, which is what this is called because there's a diversity of citizenships, you follow federal procedural law, but you still follow Alabama state law. So the federal judges still apply Alabama law as it relates to the claims that we've made. It doesn't make me feel any better or any worse about the case.

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Mar 25, 2011 8:19 AM Gabe Gabe  says: in response to hoapres

Any particular reason why you think so, hoapres? I'd be a tad freaked if my company had caught the Fed's attention that way.

Mar 25, 2011 10:23 AM Dolores Dolores  says: in response to Jerry Latham

When I was managing servers, I didn't take down a troubled server without having at least two backups, on two different types of media, of any data. This would be easy to to in Mr. Palmer's case. I would also take a complete snapshot of the hard drive.  They may plant something on there and claim he was engaged in wrongdoing - porn, financial, whatever they can dream up. And have it done by an outside tech professional willing to be a witness, that would be great too.

Mar 25, 2011 11:28 AM Indians give back Indians give back  says: in response to Warior

A little racist are we? When you wiped out civilizations, impoverished the world, it was all fine and free trade...a few lost jobs and you grumble...this is plain and simple racism...how could the little brown men take my job...

Mar 25, 2011 1:10 PM Dolores Dolores  says: in response to Indians give back

I knew it, the Indo-apoligists would show up sooner or later. Talking to us about oppression, when they invented the caste system and all the mechanisms of enforcement down through history. The "breast cloth" riots, burnings, assaults, etc. for as long as they have been a nation.

To take my job the "little brown man" needs a recent Master's degree with a dual major from a respected American university and 20 years of acquiring the right combination of technical and cultural people skills. The only way they could beat me in my niche would be by lying and/or else volunteering to work for close to free when I have big American bills to pay  ... oh, wait ....

Mar 25, 2011 1:30 PM Don Tennant Don Tennant  says: in response to Indians give back

A snide, ignorant remark in response to a snide, ignorant remark hardly advances the discussion, my friend. It only fans the ignorance flame.

Mar 25, 2011 1:35 PM Dolores Dolores  says: in response to Don Tennant

But see who started it! And they'll be back for more. Mark my words.

Mar 25, 2011 1:45 PM Dolores Dolores  says: in response to Dolores

Besides, what I said was 100% true. Want citations? The whole "breast cloth" conflict was distubing on top of being cruel.

Mar 25, 2011 4:28 PM gana gana  says: in response to Dolores

what is a "breast cloth' riot ?

Mar 25, 2011 4:42 PM Vincenzo Vincenzo  says:

And still nothing in the mainstream news.  Thanks for blogging this, Don.  It won't solve the various H-1B visa loopholes that allow employers to legally underpay H-1B visa beneficiaries, but it's something at least.

Mar 25, 2011 4:43 PM Vincenzo Vincenzo  says: in response to Vincenzo

"It won't solve the various H-1B visa loopholes that allow employers to legally underpay H-1B visa beneficiaries, but it's something at least."

Just for clarity - I meant the investigation, not Don's blog entry.

Mar 25, 2011 4:47 PM Dolores Dolores  says: in response to Vincenzo

There was a low caste in South India that was subject to numerous restrictions: they couldn't use an umbrella, wear shoes, had to carry pots on their heads not their hips, and the women were forbidden to cover their breasts in public. If they did, they'd be attacked and stripped. Under British rule, there were violent riots and they eventually won the right not only to cover their chests but to wear a cloth diagonally across (as with saris) like higher caste women. It is sometimes also called the upper cloth controversy. http://en.wikipedia.org/wiki/Upper_cloth_controversy

Mar 25, 2011 6:31 PM Jerry Latham Jerry Latham  says:

Mr. Palmer could, if push came to serious shove, use a utility program such as Acronis True Image or Symantec Ghost to create a mirror image of the laptop's hard drive for his future use and surrender the laptop to the company -- IF a court so orders.

BTW: if such an imaging tool is used, I would make 2 or 3 images since they don't always work perfectly and if the image is created on a media such as DVD there is always the possibility of one of the series of DVDs created will be corrupt.

Best of luck to Mr. Palmer in his fight and Hurrah! for both Alabama and Federal judicial systems for taking a serious interest at this serious problem.

Mar 25, 2011 6:57 PM Warior Warior  says:

here they go: http://www.youtube.com/watch?v=ZdhIR1-s8Mg&feature=player_embedded

Don ! if you are still thinking yourself an American, I ask you to help us to expose them all ..

Mar 25, 2011 7:42 PM hoapres hoapres  says: in response to Warior

The Fed investigation is not likely to be that much of a big deal for Infosys.

Mar 26, 2011 8:41 AM Don Tennant Don Tennant  says: in response to Dolores

Um ... apparently you thought my comment was directed at you, Dolores. If you scroll up, you'll see it was directed at "Indians give back." Although he didn't start it. He was responding to another reader.

Mar 26, 2011 11:39 AM hoapres hoapres  says: in response to Don Tennant

It's not a big deal and Infosys is going to walk away maybe with a small fine.

Nothing wrong with publishing it and the mainstream media is not giving this story the time of day.

This stuff has been going on for decades.

Mar 26, 2011 3:47 PM Dolores Dolores  says: in response to Don Tennant

Yeah, after I cooled down I realized that. I just get so tired of these "your country is bad" tirades from Indians. Can you tell I've heard a lot of them? I'll take lectures from Switzerland maybe, or maybe Tibet, but really!I t's actually the prolegomenon to an attack on our right to restrict immigration and guestworker access to our country. When they are allowed to get going, that is what comes tumbling out. I've heard enough of these to know.

And if you look at the history of castes who fell to a lower status, you'll often  see that an insult-fest preceded it. Like, there's a big untouchable caste who according to legend, used to be Kshatriyas (soldiers). But they got defeated in a war, hid out in the forrest for a while, and when they came out were accused of having resorted to meat eating, and were reclassed downwards. It seems to be some sort of cultural pecking-order thing, that we had better not lose.

Mar 26, 2011 4:48 PM Desi Girl Desi Girl  says: in response to Dolores

proglemenon what? I am Indian, studiously studied  the Queen's language from kindegarten to graduation, but don't know what that means. Need a dictonary.

I know what snide means though. And you are not. Snide.

Mar 26, 2011 4:58 PM Bill Bill  says: in response to Indians give back

Racist, yes it is ! I worked with a group of Indian consultants from WIPRO.

These people were required to work 13 to 16 hour days for a lot less than an American worker would get. When I asked why they agree to it I was told that there are thousands in India waiting to take their job. They can not change companies because as they near green card requirements they are shipped back to India because WIPRO does not want them to be able to apply to a company here in the USA. Racist , yes and that racist is YOU

I suppose that you also want dual language in schools so the little Hispanic child will never better themselves and you will have a cheap pool boy. It's people like you that hide behind the word racist and place it on others that are the true racists in America.

Mar 26, 2011 5:05 PM Don Tennant Don Tennant  says: in response to Dolores

Besides, you can be way too snide for my taste, but I'll give you a pass on ignorance. I have to keep a dictionary handy to read your comments.

Mar 27, 2011 9:40 AM AG AG  says:

Dolores ,

Not sure of you are a history major ...Here is some to educate you about the history of America.

If the Breast cloth riot disturbs you what would you say to the slave ships that caught africans , and brought them to the US as plantation slaves . Millions perished in the journey. The cast system in India was a system of "untouchability" not "slavery" . The upper castes did not force the lower casts to work for them under the sting of a whip .

What would you say to the millions of red Indians who were shot and theor heards decimated so that the "white" man could rule the frontier . There are scores of other brutal reprisals which americans have committed agsint so called inferior races .

The Racial system in US was million times more brutal than the Indian caste system . Even today a majory of Black men are in prison and black communities on the average are far below economically as compared to while communities .

So read a bit of US history while measuring India on the case system. I know that the west loves to believe that India is a land of snake charmers and castes because that seems to give them a sense of false su[superiority on one hand which then gets shattered when the brown man takes away his job .

So if you want a discussion on the pros and cons of IT , lets talk , do not point of the holes in someone's else's trousers when you yourself are not wearing one .

Mar 27, 2011 10:27 AM EngiNERD EngiNERD  says:

Hoapres wrote   -  "This stuff has been going on for decades"

Right he is!!!!

I first learned of ESP  -  Engineering Shortage Propaganda in 1989 when the infamous NSF shortage study was leaked.    Wasn't soon thereafter the initial  H-1b legislation was passed ?

Then  several new engineering  societies  surfaced to  proclaim the engineer shortage was a big  lie and H-1b  visa  program   would soon become a problem.

No one listened.  That was twenty years ago 

How many of you ever heard of  AACE?

American Association of Concerned Engineers

It is  long since disbanded.

Then there is   AIE  -  American Insititute Engineers.. yet another group  no longer following American Job Destruction.

Only  www.aea.org  (American Engineers Association)  fights on to  expose ESP  and the   problems h-1b  visas.


And for those you willing to surf the NET

  Go  surf.....     Peri  Software   fined

  or try     Google:   Michael  Emmons   Siemens

or this     "sona shah"   h-1b  microsoft

and if you really want something distressing try

Google:    "Kevin Flanagan"   "Bank of America"


Mar 27, 2011 2:12 PM hoapres hoapres  says: in response to EngiNERD

A solitary few have been complaining about the H1B program since day one.  Nothing is likely to change.

Mar 27, 2011 3:47 PM Dolores Dolores  says: in response to AG

As usual, Indian reading comprehension has failed here so I'll spell it out: what I said was, India has no business lecturing the US on being bad.

How can anyone say that the caste system is better than the American Indian wars when the caste system has gone on for thousands of years, and the American Indian wars lasted only a tiny fraction of that? And what's the difference between untouchability and slavery when untouchability means being restricted to one or a few low-paid, low-status occupations? When it means being shut out of education? Shut out of religious inclusion? Kept from bettering oneself and punished when one does? These conditions describe the caste system throughout most of its history. What's the difference between this and slavery? 

And, low caste people often faced violence from upper caste people, and still do in many areas. Some violence is to enforce social distinctions, to punish them for being "uppity" and other violence is just because bored, antsy youth can get away with it if they choose a low-caste victim. Other low caste people also faced draconian laws and punishments throughout most of India's history. A sudra who heard the Vedas being recited was supposed to have molten lead poured into his ears.

Who is doing better, our black people or their dalits? Who eats better and is safer in their homes from the majority overclass? Everywhere I have lived in America, there has been a good sized black middle class, with homeowners, college graduates, and professionals. Black does not equal ghetto in America. I have performed years of customer service management for black and other minority customers who outranked and outearned me. But with their Ph.D's and their professional careers, that was to be expected and I was fine with it.

I get really disgusted when a foreigner accuses me of not knowing my history, and then spouts stereotypes and Hollywood drivel.

However evil America has been at times, we've only been at it for a few hundred years and have greatly improved since the 19th century. India on the other hand has had thousands of years to get their act together. The caste system has been prominent throughout most of that history, with all its attendant abuses. Much of the increase in civil rights in India came as the result of the British influence.

All of India is one big glass house. I'd stop with the insults if I were an Indian trying to make a point here.

Mar 27, 2011 5:58 PM R. Lawson R. Lawson  says:

The tide is turning against Infosys, yet aside from this blog and perhaps one other publication there is very little coverage - still - in the mainstream media.

Great work Don! 

Mar 27, 2011 6:01 PM Don Tennant Don Tennant  says: in response to R. Lawson

Thanks, Roy, I appreciate it.

Mar 28, 2011 10:52 AM Wakjob Wakjob  says: in response to Indians give back

If you call wiping out a bunch of people who were sitting around in mud huts, smoking dope, and slaughtering each other in tribal wars a bad thing, then it is you who are uncivilized. The world never had it so good since white western civilization took over. You know. The kind of civilization that India and China are trying to copy today. Which industries give all you Indians your jobs? The ones like, say, oh IT which up until 1998 was 98% white Americans. Please name the civilizations that were wiped out? Native American savages? Heart-ripping Aztecs? Cannibals? You've been lied to in your schools because your government wasted 50 years on the failed system called communism. You are poor because your gov't followed communism for 5 decades, and because of the rampant crime, corruption, and other ills of Indian society. Without our industries, you'd still be unemployed.

And it's not 'a few jobs' India has destroyed in the west. Since 1998 20 million jobs have been destroyed in the USA alone. I know your country needs to look for a scapegoat to blame India's problems on, but the 'racist' white west has given the world every good thing and has lifted hundreds of millions in Asia out of poverty thanks to all the jobs our inventions create for you.

Mar 28, 2011 11:04 AM Wakjob Wakjob  says:

Aside from the fact that some of InfoSys's people might go to jail, this lawsuit allows all the dirty laundry to come out in court where anyone can see it. One can just imagine what goes on in these Indian companies. This lawsuit is just the tip of the iceberg. This kind of illegal behavior is RAMPANT in Indian companies in the USA. I don't see any Swedish companies telling their visa'ed workers in the USA to DON'T SAY YOU ARE WORKING.

And now that the lawsuit has triggered a federal investigation a lot more dirt is going to come out before this is over.

InfoSys wanted to move the case to Federal court becsuse the Federal judges are more in line with the pro-immigration policy of the U.S. Gov't and because they are more corrupt (bribeable). Maybe Mukarjhee can show up with another suitcase of $ like he always does.

And don't call us racists. InfoSys is an INDIAN company. Does Indians give back expect a free pass for Indian companies who are abusing visa laws?

Mar 29, 2011 4:49 PM IndianTechie IndianTechie  says:

To the inventors of capitalism..stick it.

If u want US companies to create US jobs, well ask them to withdraw from all the countries they are operating in...sell in US..create US jobs and shut up..why the hell does rest of the world need to drink coke in a mcdonalds restaurant anyway..

Almighty dollar as a reserve currency and a higher standard living does not come without a cost..your turn to give back..by whatever means that is.

Mar 29, 2011 4:57 PM IndianTechie IndianTechie  says: in response to Wakjob

Plsss..we know why we are poor and we also know why you are rich..gul gulp gulp..oil...gulp gulp gulp..oil..look there is one more..bomb..gulp gulp gulp..oil..

Apr 15, 2011 7:49 PM Virendra Virendra  says: in response to Dolores

Not sure if you are following recent developments in India. Caste system was long abolished. There was an affirmative action plan put in place by 1947.. Indian constitution was written by an untouchable. There are lot of things which have changed in India and are changing. I am not sure if you have learned Indian friends or not, but whatever has been your interactions with Indians seems to be limited. If you look at Indian-American stats, on average Indians have invested heavily in education and have more education compared to other ethnic minorities in US.  It is again not bragging but a society which is built on hard work. There are grey areas in every society but again being a very open society with very strong media (24x7independent press), vigilant judiciary and active society I am sure Indians will continue to improve on what they are not today. If you can follow, try following the recent anti-corruption agitation in India. A country of 1.2 BN + people cannot change overnight, but a positive momentum built on values and hard work will create a lasting success.

Jun 23, 2011 3:39 PM Rocky Rocky  says: in response to Vincenzo

I am surprised that noone is talking about L1 visa. Majority of them come through L1 and there is no limitation. Also the advantage L1 has its even their spouse can work when they come thru L1. It is like taking away two jobs. In H1 there is limit restriction and H4 cannot work.

Infosys like company abuse L1 visa by bringing in Non Skilled Workers thru L1.

L1 should have restriction.

Jun 23, 2011 3:40 PM Rocky Rocky  says:

I am surprised that noone is talking about L1 visa. Majority of them come through L1 and there is no limitation. Also the advantage L1 has its even their spouse can work when they come thru L1. It is like taking away two jobs. In H1 there is limit restriction and H4 cannot work.

Infosys like company abuse L1 visa by bringing in Non Skilled Workers thru L1.

L1 should have restriction.


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