Infosys, one of the biggest Indian outsourcing companies, allegedly cheated 500 American graduates out of jobs over 11 years from 2006 to 2017 — and will only have to pay $800,000, without admitting guilt, in a settlement with California’s attorney general.
“Today’s settlement shows that attempting to evade California law doesn’t pay,” said a statement from Attorney General Xavier Becerra. “Infosys brought in workers on the wrong visas in order to underpay them and avoid paying taxes.”
“With this settlement, [the government of] California has been made whole,” he continued.
Infosys’s alleged misconduct was exposed by a team of whistleblowers led by Jay Palmer, one of the many Americans who were sidelined when Disney outsourced its Florida technology center to an Indian outsourcing company. Palmer’s team will get a private settlement from the company, plus 15 percent of California’s $800,000, plus its legal expenses.
The Indian company allegedly cheated American graduates by importing Indian workers under B-1 visas. The B-1 visas are provided to company employees for short-term, non-work visits, such as training or inspections. By quietly flying in Indian workers with the B-1 visas, the company saved itself the cost of hiring American graduates for American work in American work sites.
The state’s press release said:
California Attorney General Xavier Becerra today announced an $800,000 settlement against Infosys Limited, an India-based business consulting, information and outsourcing services company, and its subsidiary, Infosys BPM Limited (collectively, Infosys). Infosys will pay California $800,000 to resolve allegations that between 2006 and 2017 approximately 500 Infosys employees were working in California on Infosys-sponsored B-1 visas rather than H-1B visas. This misclassification resulted in Infosys avoiding California payroll taxes such as the unemployment insurance, disability insurance, and employment training taxes. H-1B visas also require employers to pay workers at the local prevailing wage.
The Indian managers allegedly broke multiple laws, and yet they dodged potentially huge penalties, the press release admitted:
The settlement resolves the Attorney General’s claims that Infosys’s conduct violated California laws, including the California False Claims Act and Unfair Competition Law. The California False Claims Act permits the Attorney General to recover treble damages and civil penalties against any person who knowingly makes or uses a false or fraudulent statement to either obtain money from the state or avoid paying money owed to the state.
The press release did not explain why Becerra did not push for greater damages to deter Infosys and like-minded companies from cheating more American graduates. In fact, Becerra did not even get the company to admit guilt. The settlement says:
WHEREAS, the Attorney General believes that there is an evidentiary basis for potential legal claims against Infosys as a result of the allegations set forth above:
…
Compromise of Disputed Claims. The parties acknowledge and agree that this Agreement is not and shall not in an way be construed as, a presumption, concession, or admission by any of the parties of any fault, liability wrongdoing, damages, or any unlawful or wrongful conduct ….
The settlement did not identify or describe the corporate clients who paid Infosys for the B-1 workers.
However, Becerra is not alone in this delicate treatment of alleged visa fraud. On September 19, President Donald Trump’s Department of Homeland Security described large-scale B-1 and H-1B visa fraud by multiple Indian managers at a prestigious Indian company in Chicago, Mu Sigma:
Mu Sigma — a large, advanced analytics service provider headquartered in Chicago, Illinois, with its main delivery center in Bangalore, India — was illegally circumventing U.S. government H-1B visa regulations by actively employing B1 visitor visa holders under contract within the U.S. In addition, the company’s invitation letters for the B1 visa holders misrepresented the nature of the B1 visitors’ intended business. Furthermore, company officials illegally instructed potential B1 business visitors and company handlers how to avoid detection by U.S. authorities.
…
Mu Sigma B1 visa holders who were illegally working in the United States were also paid in India at India-based wages, which are substantially lower than their U.S. counterparts. This unlawful employment tactic greatly increased Mu Sigma’s profit margins and the company’s ability to provide low bids for end-user contracts. Mu Sigma also required its employees to sign bond contracts that unlawfully sought reimbursement of up to $10,000 of the H-1B visa costs if an employee ceased employment before an agreed upon date. Additionally, to circumvent U.S. laws that might delay or prevent their entry into the U.S., Mu Sigma instructed its H-1B employees to misrepresent to U.S. consular and border officials their intended destination of employment within the U.S.
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This investigation identified about 400 potential B1 visa violators, and more than 300 instances of illegal visa bond contracts, during the defined five-year statute of limitations. Investigating special agents also identified nine Mu Sigma executives and managers who actively participated in these schemes.
Yet the federal government fined the Chicago company a pittance for the fraud and let the nine company executives walk:
On Aug. 28, 2019, HSI’s Dallas Document and Benefit Fraud Task Force reached a $2.5 million final global settlement with Mu Sigma for allegations of H1B and B1 visa abuse. Of the $2.5 million settlement, $1.6 million will satisfy the civil allegations, and $900,000 will satisfy the criminal allegations.
State and federal governments rarely demand painful penalties to the companies who cheat American college graduates out of jobs, careers, and homes. In part, the laxity is a combination of corporate influence on government agencies and passivity by establishment journalists.
U.S. investors have imported an army of roughly 1.5 million foreign workers to take jobs from American graduates. At least half come from India, via the U.S.-India Outsourcing Economy, and they get into the U.S. job market with H-1B visas, L-1 visas, Optional Practical Training (OPT) work permits, TN visas, J-1 visas, H4EAD work permits, and B-1 visas.
Census data shows how huge numbers of American software graduates have been replaced by Indian & Chinese visa-workers in N.J., California, N.C., Georgia, N.Y., Texas, Virginia, Florida, and other states. Next: Healthcare professionals. @S386 https://t.co/qH9p4Ynd34
— Neil Munro (@NeilMunroDC) October 3, 2019
The huge supply of foreign professionals helps to reduce salary gains for American college graduates below the wage gains enjoyed by blue-collar workers.
Goldman Sachs says blue-collars are getting a 4.3% raise or 2.7% after inflation.
That growth is beating white-collar salary growth since 2016, partly b/c of higher min-wage laws, but also b/c the gov't imports many foreign grads to lower salaries. https://t.co/2diCwbRMBF— Neil Munro (@NeilMunroDC) December 11, 2019
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