PLANO, Texas — Infosys announced a $34 million settlement Wednesday to end a federal investigation into allegations that the Indian technology outsourcing giant circumvented immigration laws to bring thousands of lower-paid workers into the United States.
Federal prosecutors in Texas and Infosys said the settlement would head off any criminal case.
Infosys, which operates in more than 30 countries with more than 160,000 employees, had been under investigation for using short-term B-1 visas to bring thousands of workers to the United States instead of the more expensive H1-B visa for specialized workers. The U.S. caps the number of H1-B visas issued each year, making the process highly competitive among companies looking to hire foreign employees.
Authorities accused Infosys of gaining a leg up by importing qualified workers with the B-1 visa and paying them an Indian wage, which allowed them to underbid competitors. Prosecutors said they didn't know what those workers were paid and whether they still remained in the United States, but said Infosys had agreed to changes that would bring it into compliance with American law.
Infosys was also accused of making errors on thousands of I-9 forms that are required to determine a person's work eligibility. Agents from Homeland Security Investigations who reviewed about 9,000 I-9 forms as part of the federal probe found more than 80 percent of them had errors.
In a statement, the company blamed paperwork errors for the problems on I-9 forms and said it had made changes to prevent future mistakes. Infosys strongly denied it had misused B-1 visas or committed any visa fraud. It did not admit any criminal liability as part of the settlement.
An Infosys consultant flagged what he said was an illegal practice and contacted authorities. The whistleblower, Jay Palmer of Alabama, stands to collect millions from the settlement under the False Claims Act, a federal whistleblower law, which could award him as much as 25 percent, according to U.S. Attorney John M. Bales.
"If not for his coverage and convictions, these illegal Infosys policies would likely be ongoing as we speak," said Dave Marwell, special agent in charge for the Dallas branch of U.S. Immigration and Customs Enforcement's Homeland Security Investigations arm.
Authorities accused Infosys of entering "invitation letters" that concealed the real reason B-1 visa holders were coming to the United States and building a system to teach applicants how to deceive immigration authorities. According to prosecutors, Infosys created a memo with tips for visa applicants, including, "Do not mention activities like implementation, design & testing, consulting, etc., which sound like work."
But Infosys strongly denied it had used invitation letters improperly or committed any visa fraud, saying in the settlement that any letters "were accurate and their level of detail was appropriate for their purpose in the B-1 visa application process."
"As reflected in the settlement, Infosys denies and disputes any claims of systemic visa fraud, misuse of visas for competitive advantage, or immigration abuse," the company said in a statement. "Those claims are untrue and are assertions that remain unproven."
Under the settlement, Infosys is forbidden from using invitation letters and will be required to comply with rules on keeping its I-9 forms.
"Infosys persuaded me and our partners that they could be fully fledged legal participants in the immigration process of the United States, so we'll see," Bales said. He added that Infosys hired American workers and was valuable to the American economy, and "we're not in the business of putting people out of business when they provide value."