Infosys says it's 'target' of federal probe
Indian services firm warns investors that it doesn't know how the work visa investigation will turn out
Computerworld - WASHINGTON -- One of India's largest IT services firm, Infosys, is warning investors that it is facing a U.S. government probe over its use of work visas, and "cannot predict the final outcome."
The company, in an April 18 SEC filing, said it has been advised "that we and certain of our employees are targets of the investigation," following a recent meeting with the U.S. Attorney's Office for the Eastern District of Texas.
Infosys problems began when an employee, Jay Palmer, alleged that he was harassed at work for refusing to help the company use B-1, business visitor visas, for work that allegedly required an H-1B work visa.
Palmer filed a civil lawsuit against Infosys that caught the attention of federal investigators.
Last May, Infosys announced that it had received a subpoena issued by the U.S. District Court for the Eastern District of Texas concerning its use of the B-1 visa. Since then, there has been little news about the grand jury investigation until last week.
In its securities filing, Infosys also said that the U.S. Department of Homeland Security has been reviewing its Form I-9, an employment authorization form, and "has found errors in a significant percentage" of those forms "with respect to our employees working in the U.S."
"In the event that the DHS ultimately concludes that our Forms I-9 contained errors, the department would likely impose fines and penalties on us," said Infosys in the filing. "At this time, we cannot predict the final outcome of the review by, or the discussions with, the DHS or other governmental authority regarding the review of our Forms I-9."
The company has said from the onset that it is cooperating with U.S. authorities, and has denied any wrongdoing.
It is nonetheless informing investors that it remains in ongoing talks with U.S. authorities. "We are unable to make an estimate of the amount or range of loss that we could incur from unfavorable outcomes in such matters," the company said.
Infosys' offshore outsourcing model is dependent on the use of visas.
Although the company does not disclose the number of workers it has on visas quarter-to-quarter, it has previously reported figures above 9,000 workers.
To illustrate what the company spends on visas, it told investors last year that it incurred $12.1 million in costs for visas in the three months ended June 30, 2011, compared to $7.7 million in costs for visas in the three months ended March 31, 2011.
Patrick Thibodeau covers SaaS and enterprise applications, outsourcing, government IT policies, data centers and IT workforce issues for Computerworld. Follow Patrick on Twitter at @DCgov, or subscribe to Patrick's RSS feed . His e-mail address is email@example.com.
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