Internal Infosys Emails Document Illegal Activity

Don Tennant

Email exchanges between employees at Infosys Technologies, including individuals in the company's legal and human resources departments, show that Infosys knowingly engaged in illegal activity by arranging for B-1 visa holders to work at client sites in the United States.


The emails, copies of which I have in my possession, appear to support several of the allegations made in the lawsuit filed on behalf of Infosys employee and whistleblower Jay Palmer in February. One of the emails, dated Oct. 8, 2010 and sent by an offshore project manager to an Infosys employee in the United States, referred to a "fixed-price milestone" on a particular contract, and noted that a B-1 visa holder working on the contract was to be paid by the client:

That reminds me, we need to get email approval from client to bill any FP milestone for [employee name]-He is on separate invoice due to his B-1 Visa Pls. get the email approval from client to bill the milestone, amount is 20,352.

That, of course, is a blatant violation of the law. B-1 visas are issued to individuals who come to this country on short-term business, to engage in such activities as negotiating contracts and attending conferences and seminars. It's illegal for them to work here, and it's illegal for them to draw an income from a U.S. entity. That this particular worker "is on a separate invoice due to his B-1 Visa" is incriminating, given the fact that it's illegal to invoice a U.S. entity for work performed by a B-1 visa holder.


A second email, dated Nov. 1, 2010 and sent from an employee in Infosys' HR department to Jeff Friedel, Infosys' corporate counsel, stated explicitly that B-1 visa holders were illegally working at client sites, and weren't paying U.S. taxes:

I researched and confirmed that three employees [that a U.S. Infosys employee] listed as B-1's for [a large corporate client] who were working on client sites have not been paid out of the US. Please see the screen shots attached (B-1's here illegally) from our US pay system-Payforce. If they were paid from the US legally, they would be in this system and therefore would be paying US taxes.

To be clear, the phrase "B-1's here illegally" was written and put in parentheses by the HR employee who sent the email. The phrases in brackets were added by me to protect Infosys employees and clients.


Whether the Palmer case goes to trial or arbitration, Infosys will be in awfully hot water if it's unable to demonstrate that it took action to rectify the illegal activity that was brought to the attention of its corporate counsel. And the Infosys executives whose responsibility it was to rectify that illegal activity-and under whose watch it occurred in the first place-will likely face some extremely difficult questions from federal authorities who are conducting the ongoing criminal investigation of the company.

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Apr 4, 2011 5:30 PM Mili Mili  says:

Its shocking that a company of such repute and integrity indulged in illicit activities and then also left traces of it being incriminated so openly.

Either they are ignorant about it or have been very stupid.

I think if such a big company can indulge in such practicies, then the government should also investigate smaller companies as well and tell them to obey the law of the land. Period!

Apr 5, 2011 8:02 AM IndianTechie IndianTechie  says:

I wonder if a company in India wants to build a mall, and wants to engage the services of an American architecture firm to design and oversee the process.

So an American employee travels to India and stays for 3 months, finalizing the design and overseeing the construction. He gets his Indian expenses reimbursed. He continues to get his salary paid by his American employer. His American employer billed the Indian company for his services, should it be considered fraud ?

Apr 5, 2011 8:26 AM IndianTechie IndianTechie  says:

Dan needs a refresher on B1...I have no doubt costs figured big in Infosys's decision..but however there is no "aha" moment here. An Indian company can bill a client for services rendered by an employee during a business trip. Refer my previous example.  Two emails and thre employees not going to be enough for a federal investigation to bring Infosys down. At the best u are looking at a fine that Infosys which is going to be very affordable.

Apr 5, 2011 2:20 PM IndianTechie IndianTechie  says: in response to Don Tennant

"And a U.S. entity can reimburse a B-1 visa holder for expenses incurred during a business trip, but it cannot be billed for the types of work these people have been doing at client sites. "

Infosys's US entity can reimburse the B1 employee for his expenses. Infosys's Indian entity where the person holds employment can pay his salary in India. Infosys's US entity can bill itz clients for services rendered by a consultant on B1. All the above are legal. The only breach will be if the B1 employee recd a "pay" from the us entity which did not happen here. Even here there are some exemptions. If a US university invites a guest speaker for a month to speak on a subject, the guest speaker can receive a compensation for it. It will be subject to taxes if it is not an expense reimbursement. The individual is supposed to file for refund of taxes as part of his returns, provided he can prove he is a non resident.

Ex. When the LA county fair happens, a b1 visa is used by visitors who take up a stall to display and sell merchandise. The income is subject to income taxes and sales taxes. Federal Govt allows foreign nationals to earn and report US income via ITIN numbers. Same is the case with state of california. U can get a FTB account if you are a visitor selling merchandise in US.

If there is no direct or indirect financial benefit nobody is going to waste their time here. So the B1 visa does not preclude financial compensation.

u cannot "work" in B1, but what constitutes work vs business consulting is a gray area at best.

B1 documentation in state dept website states that engineers are allowed to install, maintain, service, supervise work products. There is no hard definition here that the B1 resource cannot touch a computer or not stay in client locations beyond x hrs or should get 8 hrs sleep without fail etc..The b1 Trip cannot last more than 6 months, which Im sure Infosys was in compliance with. Infosys's US entity cannot pay wages other than expense reimbursement. Im sure they were in compliance with this.

The evidence is going to be circumstantial. If 2 B1 resources were on site for an avg. 3 months out of a team of 30 and the project duration was 12 months, it is not going to get qualifies as B1 abuse no matter what those 2 resources were doing at the client site or for how many hrs per day.

Wrongly stating Infosys was doing something illegal without knowing the legal facts is defamation. U cannot state that explicitly with internal emails without getting a legal opinion to verify if that is indeed illegal. I would be careful.

Apr 5, 2011 5:33 PM Don Tennant Don Tennant  says: in response to IndianTechie

I'm not sure what would make you think that these two e-mails constitute the totality of the evidence against Infosys. They do not. They merely provide one small but glaring example of what's been happening within Infosys. And a U.S. entity can reimburse a B-1 visa holder for expenses incurred during a business trip, but it cannot be billed for the types of work these people have been doing at client sites. It's against the law for them to perform the types of work they've been performing at client sites. This case is not going to 'bring Infosys down.' I don't know that anyone wants to see Infosys brought down. But a lot of people, including me, want to see Infosys and all companies that engage in H-1B visa fraud and abuse brought to justice. And my name is Don, not Dan.

Apr 6, 2011 9:58 AM Mea Culpa Mea Culpa  says: in response to IndianTechie

There must be a reason why "IndianTechie" thinks that Infosys will come out of this unscathed.  In India crime pays and there are many ways for the rich and powerful to go unpunished. See this instance where the investigating agency itself lied to save a prominent businessman... typically third world: http://www.dailypioneer.com/329359/Govt-lied-in-SC-HC-on-Bofors-probe-expenses.html

Most Indians believe that criminals can and will eventually get away. In some sense, there exists a wide tolerance of crimes and scams among Indians, even if they have lived abroad for a long time.  Almost every Indian is "connected" to some politician, police officer or judge who will tweak the system for them.  This is routine. When nothing works, allegations will be called defamatory (just as IndianTechie did) and cases can be made to drag on for twenty years or something like that.  Also, in India, criminal defamation laws are used to silence whistleblowers, and there are a bunch of Information Technology laws called IT Act 2000 which are used against people who use computers for whistleblowing, blogging, citizens journalism and so on. Take a look at "http://www.mail-archive.com/national-forum-of-india@yahoogroups.co.in/msg01209.html"  for a typical instance.

But that is not to suggest that Don should worry as much as IndianTechie wants him to.  The Indian IT Act 2000 does empower an Indian police officer to send nastygrams to Don, should Infosys choose to call this blog annoying or misleading. That is explained at "http://www.cis-india.org/advocacy/igov/blog/primer-it-act/" and I am sure IndianTechie knows how powerful an Infosys or a Satyam are in India. These companies prefer to do their "dispute settlements" in India rather than in the USA, for good reason !  Don just needs to be cautious and do the right thing. In my view, he does not need to fear because he is not Indian

Apr 7, 2011 1:25 PM IndianTechie IndianTechie  says: in response to Mea Culpa

@Mea Culpa..

Well thanks for ur understanding of India..u are the American equivalent of people in India who sterotype Americans as people with loose morals, everybody sleeps with everybody else, kids carry guns to schools, bad parents, can't stay married , an angry american = indiscrimate firing at strangers at a random location.

The Indian stereotype is as true as the American stereotype above.

There is enough mud to sling back on you folks. Try harder.

Apr 11, 2011 8:25 AM hugh hugh  says:

It was quite strange that a leading Indian website reported that firms were suspended from a visa program (big firms)


and later the page above went missing! Is there censorship on this kind of coverage?


May 17, 2011 4:04 PM free minder free minder  says:

Indian Techie - I got to hand it to you for your exemplary maturity in trying to present an even handed argument and standing on your own, with politeness and clarity when showered with words of such intense negative stereotyping and hate speech. Like the song "hollywood is not america", I think it would take a few weeks of living amidst Indians in India for someone who has never been here to understand another country, especially with news broadcasts preferring only to highlight disasters.

The most amusing part of the story is the fact that never for a moment has it dawned on folks about the personal financial gain angle - in a litigation country, we would continue to have bizarre warnings saying hot coffee is hot, a plastic bag is not a toy (as if the kid is going to read it!) and we shouldn't boil eggs in the microwave. Infy holds 4bn USD of cash piling it up frugally dollar by dollar, over decades like an ant collecting grains, it would be nice to a hold of some of that I guess.

Sep 9, 2011 9:26 AM Kulkarni Kulkarni  says:

Well, we all in India want all the corporates and capitalists to learn a lesson because the current PM opened flood gates of economic liberalization in 1991 and these third grade true to third world bribing businessman were given all powers to squeeze in labourers. Just wonder if US counterparts are fooled like what would be the state of Indian cheap labourers.

We would be grateful to US workers if they expose all capitalists of India.


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