Outsourcing Firm Pays $34 Million Penalty to Settle U.S. Prosecutors' Allegations of Visa Fraud

To B-1 or not to B-1? According to U.S. prosecutors, one company is learning the hard way that it made the wrong choice.

In a record-setting penalty, Indian outsourcing firm Infosys agreed yesterday to a $34 million settlement resulting from what federal prosecutors called "systemic visa fraud and abuse" intended "to deceive" U.S. authorities. By making it appear as if individuals were coming to the U.S. for business meetings when, in reality, they were coming to provide work for U.S. companies, Infosys could use simple B-1 "business visitor" visas for its workers rather than more expensive and time-consuming H-1B "temporary worker" visas. Although Infosys continues to deny any wrongdoing, employers should definitely view this as a symbolic victory for U.S. officials—visa abuse is being taken seriously and the government wants you to know it.

The logic behind Infosys' alleged scheme is obvious: H-1B visas—while they permit the foreign worker to live and work in the U.S. for up to six years—are tightly controlled and in short supply, with only 65,000 being issued per year and the so-called "H-1B Cap" routinely being reached within weeks of the annual visa allotment becoming available. Further, each H-1B visa petition can cost employers up to $5,000. The B-1 visa, on the other hand, costs only $160 dollars, permits applicants to apply directly at a U.S. Consulate, and is in unlimited supply—the catch, however, is that the B-1 visa only allows foreign workers to enter for business meetings and training, and specifically precludes any work for a U.S. employer. Prosecutors allege that Infosys' scheme involved false invitation letters that purported to invite workers to the U.S. for meetings when they were really coming for work, providing foreign workers with instructional guides on how to trick U.S. authorities, and a "widespread failure" to keep appropriate records (i.e., Form I-9s) for workers after they entered the U.S.

Again, the underlying reason for Infosys' alleged actions is clear: there are an insufficient number of temporary work visas available to U.S. companies each year and the system is in need of reform. This case shows, however, that abuse of the current visa system while Congress works on a fix is not a solution. Infosys' $34 million penalty in this case was extreme, but even a less egregious abuse of U.S. immigration law can lead to similar bad consequences for employers. Employers who utilize international workers and frequent the U.S. visa system should beware: knowingly or even negligently using non-work visas to gain entry for work purposes can lead to government investigation and significant penalties.