Who Will Infosys Throw Under the Bus in Visa Fraud Case?


As the U.S. government wraps up its criminal investigation of the rampant visa fraud made public by Infosys employee and whistleblower Jay Palmer, very high-profile mainstream media coverage is likely to blow the lid off of Infosys' arrogant public dismissal of the government's case in the very near future. When the heat in the Infosys kitchen gets unbearably hot as a result of the case suddenly being thrust into the media spotlight, it will be interesting to watch the finger-pointing and blame-shifting begin in earnest.


As you know, if you've read this blog with any regularity at all, Palmer's civil lawsuit against Infosys has to do with the harassment and retaliation he suffered after blowing the whistle on the visa fraud. But the real problem for Infosys isn't so much what it stands to lose in Palmer's civil case, but rather what it stands to lose as a result of the federal criminal investigation that was sparked by Palmer's case.


Now, a second Indian IT services company is likely to come under the scrutiny of federal investigators for the very same reasons, and under remarkably similar circumstances. Mumbai-based L&T Infotech earlier this week was named as the defendant in a class-action lawsuit brought by two female employees who are alleging gender discrimination. But that's not what L&T needs to sweat about. One of the women, Nanda Pai, worked in the human resources department in L&T's New Jersey office, and became aware of rampant visa fraud at L&T. The fraudulent activity was outlined in detail in the lawsuit, because it pertained to the ill treatment that the women were alleging.


Here's an excerpt from the lawsuit, filed last week in U.S. District Court for the District of New Jersey:

Defendants became concerned with potential liability for having submitted false documents to the United States government in connection with H-1 B visa applications, and for having indulged in fraudulent misconduct concerning nonimmigrant visas. To address these concerns, Defendants commissioned an audit of their immigration records and procedures by Ernst & Young. Ernst & Young completed the audit, and submitted a report to Defendants in October 2008. That report revealed significant procedural and substantive shortcomings and documentary discrepancies reflective of widespread visa fraud in Defendants' applications to the United States government for visas on behalf of employees and potential employees that were sponsored by Defendants for admission to the United States. To cover up the serious problems identified by the Ernst & Young audit, Defendants, through Ms. Pai's supervisor/manager, systematically backdated and/or fabricated documents in massive numbers. Defendants were aware that they had made false statements to the United States government under penalties of perjury, and to evade liabilities and penalties therefor, willfully sought to cover up that misconduct by such backdating and/or fabrication.


Ms. Pai was extremely concerned and distressed at this massive cover-up operation.


Ms. Pai's distress was compounded when she discovered that on many such backdated documents, her signature had been forged. When she raised this issue with Defendants, she was advised to stay silent. Ms. Pai became increasingly anxious that she was being set up to be the fall person for these massive immigration violations, and was constantly in a state of high anxiety. This drastically affected her lifestyle and personal relationships. But she needed the income from the job, and could not afford to resign.

Unlike Palmer, then, Pai never blew the whistle on the illegal activity. In the end, according to the lawsuit, L&T made Pai the scapegoat:

Defendants used the opportunity to scapegoat Ms. Pai, and blame her for mistakes and omissions which had been identified by the Ernst & Young audit. In fact, as Defendants well knew, to the extent the mistakes were inadvertent and attributable to sloppiness, they were, in fact, committed by Defendants' employees located in India. With respect to those infractions which were willful, Defendants' own managers/supervisors were singularly responsible.

An interesting element in all of this is that L&T at least had the sense to commission a reputable outside company to come in and audit its immigration records and procedures. Infosys, on the other hand, appears to have overlooked that prudent measure. I spoke about this today with Palmer's attorney, Kenny Mendelsohn. Here's what he had to say about it:

I found it kind of interesting -- [L&T] started worrying about immigration problems, and hired Ernst & Young; Infosys gets a whistleblower complaint, and they hire a criminal defense lawyer. To this day, we have not been contacted by any independent auditor or lawyer who has investigated the immigration and tax violations. A criminal defense lawyer is hired to keep you out of jail. If Infosys had hired Ernst & Young instead of a criminal defense lawyer, it would have revealed these problems, whereas now they're saying they didn't do anything wrong. What I've been saying the whole time is, if they hadn't done anything wrong, why not hire an independent auditor? Why hire a criminal defense lawyer?

So at least L&T appeared to have a plan: Get Ernst & Young to do an audit to find out exactly what the problems are, and then pin the blame on the woman in HR who's been such a thorn in the company's side with her complaints about gender discrimination. Infosys, on the other hand, appears absolutely rudderless. Nobody with any decision-making authority appears to have the slightest clue about the extent of the criminal activity within the company, or what to do about the criminal investigation, so the company has mindlessly defaulted to denial mode.


But again, things are going to get very ugly, very quickly, when Infosys' outrageous actions are exposed by a high-profile mainstream media outlet. It's only a matter of time, and I have a hunch that it's going to be sooner rather than later. And when it happens, it will be fascinating to see how Infosys handles it. It will be equally fascinating to see who's thrown under the bus when the feds make it clear that denial is a bus ticket to indictment.