Infosys on Tuesday said that it is close to resolving its ongoing visa-related case with the US authorities.

According to a statement made by the Office of US Attorney John M. Bales for the Eastern District of Texas, the State Department would announce the settlement of systemic visa fraud and immigration abuse allegations. The settlement, to be announced on Wednesday, could include a fine of $35 million on Infosys.

Reserve fund

In the second quarter, Infosys said that it has earmarked $35 million from its reserve of $4.2 billion to battle a case in the US around alleged misuse of B-1 visas in the past.

When contacted, an Infosys spokesperson said: “In response to reports attributed to Justice Department officials, Infosys is in the process of completing a civil resolution with the Government regarding its investigation of visa issues and I-9 documentation errors. The resolution has not been finalised.”

India’s second largest software exporter has come under scrutiny of the Department of Homeland Security and the Department of Justice for errors in I-9 forms that are required to be filled up by a company to be stationed in the US. This issue of eligibility of some of its workforce in the US came to light after some former Infosys employees filed lawsuits alleging that the Infosys management retaliated against them for blowing the whistle on visa related fraud.

Another case

Infosys has amicably settled one such case with Satya Dev Tripuraneni, an Indian American who worked for five years at Infosys’ as an accounts manager in the Silicon Valley office in California. Another such case was dismissed by the Alabama District Court, which was filed by Jack Palmer, an American employee of Infosys, but the ruling pointed out that the nature of the case was based on Alabama statutes, not federal law.

Infosys CEO S.D. Shibulal said at the time of the ruling that judge Myron H. Thompson’s decision has confirmed that Palmer’s claims were completely unfounded.

Industry watchers are concerned about the repercussions of this on Infosys and the Indian IT sector as North America accounts in excess of 70 per cent of its business.

“Such visa fraud issues will surely affect its business there,” said Sanchit Vir Gogia, Chief Analyst, Greyhound Research.

Infosys denies any claims of systemic visa fraud, misuse of visas for competitive advantage, or immigration abuse. "Those claims are untrue and only unproven assertions. The Company's use of B-1 visas was for legitimate business purposes and not in any way intended to circumvent the requirements of the H-1B program."

"No criminal charges have been filed against the Company and no court rulings have been issued," the company said.

"Infosys's policy demands adherence to all laws, rules, and regulations everywhere we operate and we continue to take our compliance obligations seriously.”

venkatesh.ganesh@thehindu.co.in