9 ms·

Infosys settles with California over alleged visa scam, tax evasion

77 points by masonic 7y ago

SilasX 7y ago
The article focuses on the resolution of tax liability with CA, but it also mentions InfoSys heavily misclassifying immigrants, which seems to expose them to federal prosecution as well -- isn't that going to have much worse consequences? Will CA's sanctuary policy have implications for the feds' ability to prosecute (i.e. does it extend to "no we won't pass on what they represented in their filings")? Also, $800k feels like not enough deter this kind of thing.
- sct202 7y ago
  $800k penalty seems like basically nothing.
  - gamesbrainiac 7y ago
    My initial thoughts exactly.
  - SilasX 7y ago
    It's definitely nothing compared to Infosys cash flows as a whole; I'm only on the fence because I'm not sure how large it is relative to the profits of this specific scheme.
- pkaye 7y ago
  They are not illegal immigrants so probably the CA sanctuary policy doesn't apply. Now the question is are the Fed pursuing any prosecution.
  - toast0 7y ago
    So, if the B-1 visas are revoked while the holders are in the US, ICE would probably like to deport them as part of their Immigration Enforcement activities. The biggest portion (in my mind) of the law that I found [1] is: > 7284.6. (a) California law enforcement agencies shall not: > (1) Use agency or department moneys or personnel to investigate, interrogate, detain, detect, or arrest persons for immigration enforcement purposes, including any of the following: > [long list] I would say that the state was investing a company, not necessarily a person, and for tax enforcement purposes, not for immigration enforcement purposes. I also may not have the final law (or it may have been adjusted since). Also, people on B-1 visa shouldn't remain in the country for very long at a stretch (max 6 months), so it's likely there aren't a lot of people who could be detained for violations. [1] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB54 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml...
- alistairSH 7y ago
  I doubt any sanctuary city/state policies would impact federal investigation (and prosecution) of visa fraud. When a state/city declared itself a sanctuary, it typically relates to turning over immigrants to ICE, usually after they've been apprehended for non-immigration reasons (speeding and other minor crimes). I haven't heard of those policies extending to broader immigration crime.
- gamblor956 7y ago
  The article notes they already settled with the feds.
- TheBobinator 7y ago
  All Fines are bribes; the entire concept of a fine in of itself is fundementally a corruption of the law. If you want to stay pro-business, sentancing the executive management to public service, or probation, or anti-corruption workshops like they do for those with DUI works fine for me. I'm all for a 3 strikes program. First strike, you pay for the workshop and pass or get probation. Second strike you're on probation and if you don't like it, go to jail. Third strike, you're a felon.
olliej 7y ago
500 employees means less than 2k per employee. I suspect they made a much more significant profit than the fine they just received. I don’t understand why criminal charges weren’t applied to the people who committed perjury, and why the fine was not a whole number multiple of the profit they made through their fraud. I say this as a person who spent many years on an H1-B, and is sick of getting shit on because of these “consulting” companies. Let’s be honest: technical specialist visas have no business in general outsourcing/contracting firms. By definition a company offering outsourcing services is not a company that is hiring specialists.
- lonelappde 7y ago
  Can you explain your reasoning? Specialist is exactly the role I need to outsource.
  - olliej 7y ago
    An h1b is for specialists for your business. If you need a specialist so badly you need an h1b, then you should be employing them directly. Large outsourcing firms aren’t hiring a bunch uniquely talented specialists.
- jon_richards 7y ago
  >By definition a company offering outsourcing services is not a company that is hiring specialists. Counterpoint: If a specialist is so specialized that no single company can justify hiring them full time, an outsourcing/contracting firm is the perfect place to be.
paggle 7y ago
Another "settlement" that's scaled more like a sales tax.
vsskanth 7y ago
Violation of immigration law should lead to automatic bans on applying for future visas by the company. I always wonder why DHS or USCIS don't go after big names like them harder.
- lonelappde 7y ago
  Because the enforcement is pro business and anti-worker.
starpilot 7y ago
This is par for the WITCH companies (WiPro, Infy, TCS etc.). Indian companies, Indian culture. If you can get away with anything, even INSIDE the company, you do it, and don't stop unless the penalty is massive. I guarantee you the same behavior is still going on, perhaps only outside of California but a good chance inside as well.
- saagarjha 7y ago
  > Indian companies, Indian culture. Your comment would be significantly improved if you didn't lump in some casual racism.
  - primitivesuave 7y ago
    Indians such as myself are well aware of the reality of Indian work culture and business ethics. Indian corporations take tax evasion, environmental negligence, and worker abuse to an extreme far beyond what the US or any other developed country has to deal with. It is certainly improving for several reasons - a burgeoning startup environment, environmental awareness, better education - but I hardly find it racist to point it out.
  - tomc1985 7y ago
    Stereotypes based on half-truths aren't necessarily rascist
    - dang 7y ago
      Internet discourse based on them quickly sinks to the bottom of the barrel.
  - sabujp 7y ago
    This: replace indian with chinese or any other country where the quality of life, pay, and opportunities are not as great as in the destination countries and you have the main reason, a large pool of desperate people and managers/directors trying to "improve" their bottom line. Pay everyone the same across the board! Why pay programmers of equal value differently for the exact same work? FAANG companies do this within the US across various regions. How about fixing that first.
paxys 7y ago
$800K settlement and not having to admit any wrongdoing is a joke. It's basically a token fine so the state can say they did something while still keeping everyone who benefited from this (Infosys & their clients – so all large tech companies) happy.
DevKoala 7y ago
The $800k settlement is a joke. It sounds as if our state is corrupt, or worse, just flat out incompetent. Why weren't they prosecuted for the crime?
- gamblor956 7y ago
  Why weren't they prosecuted for the crime? Because they settled... And the $800k seems low (and probably is) but it only relates to state taxes, which are lower than federal taxes, and only applies to a specific, relatively uncommon type of non immigrant worker. Offset against the $800k is the cost they don't spend prosecuting the case, or collecting the amount deemed owed.
  - DevKoala 7y ago
    The problem is that the penalty is not enough to detract InfoSys or other companies from committing the same crime.

77 points by masonic 7y ago

The article focuses on the resolution of tax liability with CA, but it also mentions InfoSys heavily misclassifying immigrants, which seems to expose them to federal prosecution as well -- isn't that going to have much worse consequences? Will CA's sanctuary policy have implications for the feds' ability to prosecute (i.e. does it extend to "no we won't pass on what they represented in their filings")? Also, $800k feels like not enough deter this kind of thing.

sct202 7y ago
$800k penalty seems like basically nothing.
- gamesbrainiac 7y ago
  My initial thoughts exactly.
- SilasX 7y ago
  It's definitely nothing compared to Infosys cash flows as a whole; I'm only on the fence because I'm not sure how large it is relative to the profits of this specific scheme.
pkaye 7y ago
They are not illegal immigrants so probably the CA sanctuary policy doesn't apply. Now the question is are the Fed pursuing any prosecution.
- toast0 7y ago
  So, if the B-1 visas are revoked while the holders are in the US, ICE would probably like to deport them as part of their Immigration Enforcement activities. The biggest portion (in my mind) of the law that I found [1] is: > 7284.6. (a) California law enforcement agencies shall not: > (1) Use agency or department moneys or personnel to investigate, interrogate, detain, detect, or arrest persons for immigration enforcement purposes, including any of the following: > [long list] I would say that the state was investing a company, not necessarily a person, and for tax enforcement purposes, not for immigration enforcement purposes. I also may not have the final law (or it may have been adjusted since). Also, people on B-1 visa shouldn't remain in the country for very long at a stretch (max 6 months), so it's likely there aren't a lot of people who could be detained for violations. [1] https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=201720180SB54 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml...
alistairSH 7y ago
I doubt any sanctuary city/state policies would impact federal investigation (and prosecution) of visa fraud. When a state/city declared itself a sanctuary, it typically relates to turning over immigrants to ICE, usually after they've been apprehended for non-immigration reasons (speeding and other minor crimes). I haven't heard of those policies extending to broader immigration crime.
gamblor956 7y ago
The article notes they already settled with the feds.
TheBobinator 7y ago
All Fines are bribes; the entire concept of a fine in of itself is fundementally a corruption of the law. If you want to stay pro-business, sentancing the executive management to public service, or probation, or anti-corruption workshops like they do for those with DUI works fine for me. I'm all for a 3 strikes program. First strike, you pay for the workshop and pass or get probation. Second strike you're on probation and if you don't like it, go to jail. Third strike, you're a felon.

olliej 7y ago

500 employees means less than 2k per employee. I suspect they made a much more significant profit than the fine they just received. I don’t understand why criminal charges weren’t applied to the people who committed perjury, and why the fine was not a whole number multiple of the profit they made through their fraud. I say this as a person who spent many years on an H1-B, and is sick of getting shit on because of these “consulting” companies. Let’s be honest: technical specialist visas have no business in general outsourcing/contracting firms. By definition a company offering outsourcing services is not a company that is hiring specialists.

lonelappde 7y ago
Can you explain your reasoning? Specialist is exactly the role I need to outsource.
- olliej 7y ago
  An h1b is for specialists for your business. If you need a specialist so badly you need an h1b, then you should be employing them directly. Large outsourcing firms aren’t hiring a bunch uniquely talented specialists.
jon_richards 7y ago
>By definition a company offering outsourcing services is not a company that is hiring specialists. Counterpoint: If a specialist is so specialized that no single company can justify hiring them full time, an outsourcing/contracting firm is the perfect place to be.

paggle 7y ago

Another "settlement" that's scaled more like a sales tax.

vsskanth 7y ago

Violation of immigration law should lead to automatic bans on applying for future visas by the company. I always wonder why DHS or USCIS don't go after big names like them harder.

lonelappde 7y ago
Because the enforcement is pro business and anti-worker.

starpilot 7y ago

This is par for the WITCH companies (WiPro, Infy, TCS etc.). Indian companies, Indian culture. If you can get away with anything, even INSIDE the company, you do it, and don't stop unless the penalty is massive. I guarantee you the same behavior is still going on, perhaps only outside of California but a good chance inside as well.

saagarjha 7y ago
> Indian companies, Indian culture. Your comment would be significantly improved if you didn't lump in some casual racism.
- primitivesuave 7y ago
  Indians such as myself are well aware of the reality of Indian work culture and business ethics. Indian corporations take tax evasion, environmental negligence, and worker abuse to an extreme far beyond what the US or any other developed country has to deal with. It is certainly improving for several reasons - a burgeoning startup environment, environmental awareness, better education - but I hardly find it racist to point it out.
- tomc1985 7y ago
  Stereotypes based on half-truths aren't necessarily rascist
  - dang 7y ago
    Internet discourse based on them quickly sinks to the bottom of the barrel.
- sabujp 7y ago
  This: replace indian with chinese or any other country where the quality of life, pay, and opportunities are not as great as in the destination countries and you have the main reason, a large pool of desperate people and managers/directors trying to "improve" their bottom line. Pay everyone the same across the board! Why pay programmers of equal value differently for the exact same work? FAANG companies do this within the US across various regions. How about fixing that first.

paxys 7y ago

$800K settlement and not having to admit any wrongdoing is a joke. It's basically a token fine so the state can say they did something while still keeping everyone who benefited from this (Infosys & their clients – so all large tech companies) happy.

DevKoala 7y ago

The $800k settlement is a joke. It sounds as if our state is corrupt, or worse, just flat out incompetent. Why weren't they prosecuted for the crime?

gamblor956 7y ago
Why weren't they prosecuted for the crime? Because they settled... And the $800k seems low (and probably is) but it only relates to state taxes, which are lower than federal taxes, and only applies to a specific, relatively uncommon type of non immigrant worker. Offset against the $800k is the cost they don't spend prosecuting the case, or collecting the amount deemed owed.
- DevKoala 7y ago
  The problem is that the penalty is not enough to detract InfoSys or other companies from committing the same crime.