Palmer’s Case Against Infosys: It Was, Indeed, a Game Changer

    In March 2011, a month after Infosys whistleblower Jay Palmer filed a harassment and retaliation lawsuit that exposed alleged rampant visa fraud and abuse on the part of the Indian IT services provider, I wrote my second post about the case. It was titled, “H-1B Visa Fraud Case Against Infosys May Be a Game Changer.”

    That case, as people all over the world now know, revealed for the first time how Infosys was allegedly sending workers to the United States on cheaper, more easily secured B-1 visas to perform work that was supposed to be performed by workers on H-1B visas due to their “specialized talent.” Two-and-a-half years later, Infosys would pay $34 million to the United States government to settle an investigation, sparked by Palmer’s lawsuit, that federal authorities say showed Infosys had engaged in “systemic visa fraud and abuse of immigration processes.”

    I opened that post with a hunch: “The lid just might be blown off the H-1B visa abuse problem by a couple of good ol’ boys from Alabama. I can’t say for sure, but I think the you-know-what is going to hit the fan.” I was referring to Palmer and to his attorney, Kenny Mendelsohn, who filed the suit in U.S. District Court in Alabama.

    “I’m just a street lawyer in Montgomery, Alabama,” Mendelsohn told me at the time. “I can’t solve all the world’s problems, and I can’t really force a whole lot of changes with this lawsuit.”

    “I’m not so sure about that,” I wrote in that post. “I wouldn’t be a bit surprised if this case turns out to be a game changer. Hopefully, it will prompt a federal investigation of Infosys, sooner rather than later, and compel other H-1B visa abusers to clean up their acts.”

    It turned out the case did, indeed, prompt a federal investigation. But as the dust settles in the aftermath of last week’s settlement—the largest monetary settlement of an immigration-related case in U.S. history—we’re left with the question that begs to be answered: Was this case, indeed, a game changer?

    Brian Gray, a group supervisor in the Department of Homeland Security’s Homeland Security Investigations (HSI) unit and head of the Document Benefit Fraud Task Force (DBFTF) that conducted the investigation, said there’s no question about it. He highlighted how the case has educated the federal government.

    “We hope this will serve as a model for the other DBFTFs to follow, because this was kind of new territory for us to go through, and it was an educational process along the way,” Gray said. “We foresee that this will aid in the training of our customs and border protection counterparts there at the ports of entry, the consulates overseas that are issuing the visas, and educate them on how this matter started, and maybe what to look for.”

    Ed Koranda, the DHS special agent who teamed with Department of State special agent Tim Forte to carry out the investigation in the trenches, said changing the game was his goal all along.

    “I hope the success of this investigation will encourage other U.S. Attorney’s Offices to take these things on, because it does require, like Brian said, a great learning curve, and sometimes it’s a little intimidating,” Koranda said. “So I hope the fact that this was a success breeds other investigations.”

    According to David Marwell, HSI special agent in charge in the Dallas Field Office, which oversaw the investigation, it already has.

    “We are looking at other companies,” Marwell said. “This case has taken us in other directions. And there are other, what we call ‘spinoff’ cases, which we’re following up on. … We want other companies like Infosys to be on notice that we will be looking, and with proper predication and proper information, we will investigate practices and hold other companies that are doing this same sort of thing accountable.”

    “I think it’s a game changer in a few respects,” Marwell added. “I think you know as well as we know that a lot of folks knew about this, and certainly those in the IT industry were very well aware of what was going on. They were sitting, watching, waiting to see what sort of action all this would yield. So I think from an overarching perspective, a strong deterrent message is being sent. If for no other reason, I think that makes it a game changer.”

    Marwell suggested that other companies learned from what Infosys was doing.

    “Look, to get this competitive edge, for Infosys to do what they did, others, I think, followed suit,” he said. “And in following suit, it became a systemic issue, not only within Infosys, but, as far as we can tell and see, and as others have brought to our attention, it seems to be a systemic problem with the IT industry.”

    Marwell detailed how the investigation has compelled Infosys to change its business practices.

    “Their leadership did appreciate the fact that there were substantial problems in the way that Infosys was conducting its business in our country,” Marwell said. “The settlement ultimately required Infosys not only to get on the correct path, but really to step it up and adhere to these corrections. … I believe that from the strong compliance measures that Infosys has built into their business practices, and how they have come around and will adhere to the I-9 process, and are changing their ways in obtaining the visas from our consulates abroad, I think all of those things weigh strongly. I think this settlement, as it’s put out in the public domain, stands as a deterrent to others that are engaging, or may be engaging, in similar practices.”

    Shamoil Shipchandler, Assistant U.S. Attorney in the Eastern District of Texas, who was instrumental in negotiating the settlement on behalf of the U.S. government, said the case enabled him and his colleagues to gain a far better understanding of the visa abuse issue.

    “We understand the ins and outs of this, we understand what’s right and what’s wrong,” Shipchandler said. “Given that level of understanding, I think it helps inform what we can and can’t do. I think you’ll certainly see that our efforts and scrutiny have changed, and I think what you’ll also see is companies themselves will take some actions to police themselves on these grounds.”

    Shipchandler agreed with his colleagues on the “game changer” question.

    “If you want to characterize ‘game changer’ as being whether it will cause other people to change their behavior, I think the answer is yes, it has to,” he said. “Infosys cannot have come up with this on its own—there have to be other people who are doing the same thing. And if they look and see that one of the largest companies in the world is being held accountable for its conduct, they must understand that they would be no different.”

    And what about Palmer himself, and the actions he took in blowing the whistle on Infosys?

    “Had it not been for Mr. Palmer’s courage in bringing these allegations to our attention,” Shipchandler said, “this case would not have happened.”

     Marwell agreed.

    “Jay brought this information to us, he stood by his convictions, he was very vocal about it,” Marwell said. “He brought forth a lot of really pertinent information that took us the better part of two years to corroborate.”

    According to Koranda, Palmer was a key resource throughout the investigation.

    “We’ve talked to Jay quite often. He brought the initial information, and he was always available to help us understand the obscure IT language, and contract language,” Koranda said. “In that respect, Jay was instrumental. He’s the one who opened the door, he’s the one who brought us up to speed in that particular niche.”

    Mendelsohn, for his part, was reflective when I spoke to him on the day the settlement agreement was announced.

    “You were the first one who called it a game changer,” he said. “And it is. The effect this has had, the things that Congress is looking at, all of the attention this is getting, not just on the B-1 issue, but on the question of whether the H-1Bs coming over here are really specialized talent. The number of Americans who have lost their jobs, who have been more than willing and anxious to work in the IT industry again, but aren’t able to because jobs are taken away—the thought that some may get their jobs back, if you read a lot of the stuff on Infosys, they’ve been reporting that they’re having to hire more Americans. And that’s great.”

    Mendelsohn said he and Palmer had talked about the significance of the case very early on, and that they both realized it was a lot bigger than either one of them.

    “You’re talking about American jobs. You’re talking about people skirting around American laws to try to increase their profits,” he said. “The fact that I may have had some small part in correcting that is extremely rewarding.”

    Infosys did not respond to a request for comment.

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