Finally, somebody besides Don Tennant or Patrick Thibodeau is covering the looming Infosys trial:


Infosys Visa Fraud Trial Should Leave CIOs ‘Worried’

Infosys, the Indian IT outsourcing giant, is headed to court this month, to face allegations that it committed visa fraud to bring workers to the United States, and then tried to intimidate a whistleblower. Immigration and outsourcing experts say recent scrutiny facing the practice means CIOs need to be more vigilant when monitoring outsourcing firms who work onsite, or face harm to company reputation, and even legal consequences and the deportation of staff.

The civil suit, filed by a former consultant with the firm, alleges that Infosys improperly used short-term business travel documents, known as B1 visas, to bring Indian workers to the United States to work on client sites. The case will go to federal court in Alabama on August 20, after attempts at a settlement collapsed last week.

Jack Palmer, the former employee, claims he was asked to fill out paperwork for the employee travel visas, falsely representing the purposes of these trips as short visits for meetings. When he refused and reported the violations to the company’s corporate counsel, Palmer alleges Infosys managers retaliated by withholding bonuses and pulling him off job sites. Infosys also did not withhold federal or state taxes from these employees, the suit alleges. Infosys is now the target of a federal criminal investigation, probing its use of visitor visas, the company stated in a corporate filing in May.

“There is not and never has been a policy to use B1 visas to circumnavigate visa policies,” said Danielle D’Angelo, a spokeswoman for Infosys. “We have never retaliated against any employee and any allegations that say otherwise are simply not accurate.”

The practice of improperly using business travel visas is common for outsourcers that send workers to client sites, said Phil Fersht, CEO of HfS, an outsourcing research firm. The H1B work visa–the appropriate document for longer-term onsite work–costs companies thousands of dollars per employee and the federal government has reduced their availability in recent years. “Outsourcers are trying to get staff to work an engagement as quickly as possible and they will work the system as much as possible,” Fersht said.

CIOs contemplating the hiring of on-site outsourcers can expose their companies to grave reputational harm if they don’t ask the right questions, Fersht said. “They should be worried.”

Even if the client company has no knowledge of outsourcer visa policies, it can be named in legal actions surrounding the case, like numerous Fortune 500 companies named in the Infosys civil case documents. “I don’t think any American organization wants their name attached to foreign employees on incorrect visas, in widely publicized court battles,” Fersht said.

To avoid this reputational harm Fersht says CIOs should push outsourcers to ensure that workers brought into the office are on the correct visa. “They’ve got every right to validate the immigration status of every employee sitting in their office.”

James Nolan, a New York-based immigration attorney, says CIOs who use outsourcers could also find themselves in legal hot water if they help facilitate a visa under false pretenses. CIOs may be asked by a foreign outsourcer to provide the “welcome” document needed for a business travel visa, which states that an outsourced employee is coming into the country for a meeting or training. But if he knows the worker will actually do longer-term work onsite, he could be committing immigration fraud, Nolan said. “If it’s ongoing and systematic, they could be prosecuted,” he said.

CIOs who use outsourcers who are not aboveboard on immigration issues also risk being left with projects incomplete, if a crackdown leads to workers being deported, said Ben Trowbridge, CEO of Alsbridge, an outsourcing consulting firm. “If your provider has to have people sent back, an essential system can go down because of the disruption to the team,” Trowbridge said.


Comments (12) -

United States indian tatti
August 7. 2012 09:16
indian tatti

BANGALORE: In a fresh twist in the legal battle between Infosys and whistle-blower employee Jack Palmer, the Bangalore-based software services firm has contested evidence submitted to court by Palmer, even suggesting that the evidence - copy of email communication between Infosys and employees - may have been tampered with.

The evidence was submitted by Palmer opposing a motion by Infosys for a summary judgement - a judgment without full jury trial, ahead of the jury trial date. Palmer, who alleges that Infosys flouted US visa norms while sending employees to work in that country, had submitted copies of email communication as evidence to the court to buttress his claim.

Infosys however, informed the court last Friday that based on independent verification, some of the emails submitted to the court appears to be modified from their original form, with new phrases introduced. The firm has also requested the court to not consider the contested evidence.

Infosys's submission to the court was backed by the findings of Kroll Ontrack Inc, an electronic data firm, which compared and analyzed the records of email communications available with Infosys, against the ones submitted by Palmer.

Fuck Hindus

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United States Dean
August 7. 2012 11:35

yeah, that makes sense. This Jack Palmer guy went to all this trouble, so that he could get have his life thrown into turmoil and upended. For sure, everyone is looking to have their life thrown into chaos like that. Fucking indians are natural born liars and will never change...

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United States Drifter
August 7. 2012 11:35

Yeah right. So infosys has paid someone off to claim that the emails don't match. Like anyone but the blindest infosys cheerleaders will believe it....

After they couldn't get Palmer's laptop back when they demanded it.

This is infosys trying to stem the massive internal hemorrhaging as the leaks are springing faster than they can fix them.

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United States mojo
August 7. 2012 12:58

Sikhs just got fucked
hatred breeds hatred.
I am sure your brothers are proud of you .

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United States James
August 7. 2012 16:13

Of course InfoSys is going to lie and say the evidence is tampered. They know they will probably go to jail as fraud is ALWAYS a criminal  offense. Typical Indians - run a criminal syndicate, rape, pillage, plunder, and then when they get caught, try to deflect attention with the usual LOOK OVER THERE! ploy.

"Infosys however, informed the court last Friday that based on independent verification, some of the emails submitted to the court appears to be modified from their original form, with new phrases introduced. The firm has also requested the court to not consider the contested evidence.

Infosys's submission to the court was backed by the findings of Kroll Ontrack Inc, an electronic data firm, which compared and analyzed the records of email communications available with Infosys, against the ones submitted by Palmer. "

Independent verification? How can such a thing ever be verified? For all we know, InfoSys changed the emails on the servers after Palmer captured them then had an outside organized "verify" them.

Kroll Ontrack Inc is another IT firm? Let me guess who runs it. MORE INDIANS.

WE ALL KNOW InfoShit is GUILTY and they are scrambling to cover their asses now that the trial is here.

I can't wait to see these frauds led away in handcuffs.

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United States Indian Tatti
August 7. 2012 23:03
Indian Tatti

Aug 7 (Reuters) - The New York banking regulator's accusation that Standard Chartered Plc hid $250 billion in transactions tied to Iran may bring fresh scrutiny on the outsourcing of sensitive functions by global financial institutions, especially to India.

Standard Chartered lost $16 billion in market value on Tuesday as its shares plunged after the New York State Department of Financial Services (DFS) threatened to cancel the British bank's state banking licence.

As part of its report, the regulator said the bank's failures included "outsourcing of the entire OFAC compliance process for the New York branch to Chennai, India, with no evidence of any oversight or communication between the Chennai and the New York offices."

OFAC is the U.S. Office of Foreign Assets Control.

Standard Chartered said the bank "does not believe the order issued by the DFS presents a full and accurate picture of the facts".

Scope International, Standard Chartered's wholly-owned back office outsourcing centre, is based in the south Indian city of Chennai and employs more than 8,500 people who provide support for the bank's global operations.

The DFS accusation could negatively affect India's outsourcing industry, worth about $100 billion and growing at 14 percent per year. It is one of the few bright spots in an economy blighted by policy stagnation and political instability.

"Perception-wise, people will stop sending larger-quantum and more sensitive works to India," said Rishi Sahai, director at Indian consultancy Cogence Advisors, an advisory firm that specialises in the technology sector.

"Any work related to regulatory compliance, internal audit and those kind of things, they will close their arms around it and keep it closer to where they are," he said.

Standard Chartered's Indian global back office, known as a "captive" operation because it is a unit of the bank, handles functions including HR support, finance and accounting, IT services and helpdesk support for the group globally, according to the Scope International website.

A spokeswoman for the bank in Mumbai declined to comment.

The offshoring of jobs to lower-cost locations such as India can be a politically contentious issue in the United States, especially during a presidential election year, although Standard Chartered is not U.S.-based.

Worries about data security also occasionally crop up around shipping work to India by global firms.

India received 58 percent of global outsourcing contracts last year, according to industry estimates.

Global banks and financial services companies are among the biggest outsourcers to Indian companies, including Infosys and Tata Consultancy, which provide services ranging from payroll management to maintaining IT networks.

"I think this will become a hot topic for the United States presidential election," Sahai said.

Many banks, including HSBC Plc, JPMorgan and Royal Bank of Scotland, have their own facilities in India with thousands of employees providing support services for global operations, taking advantage of lower costs.

Financial services firms can cut their costs by at least a third by shifting work to in-house operations in India, according to some technology sector estimates.

The issue will give more ammunition to groups in the West that oppose outsourcing because of fears of job losses, said Sudin Apte, chief executive of independent advisory and research firm Offshore Insights. But he did not see a long term-effect.

"Some more rigour in compliance, some more rigour in scrutiny and process adherence...but I think I would welcome that because that makes the system perfect or near perfect," he said.

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United States Indian Tatti
August 7. 2012 23:35
Indian Tatti

NEW YORK/LONDON/MUMBAI: Outsourcing of key oversight jobs by global banks to India has come under the scanner for the second time in less than a month for exposing the US financial system to terrorists and money laundering risks.

On the heels of a probe by the US Senate's Permanent Committee on Investigations pointing out major lapses in the work of HSBC's India staff, another UK-based banking giant Standard Chartered's outsourcing of key banking jobs to Indian shores have come under the scanner in the US.

A probe by the New York State's key banking regulator, the Department of Financial Services (DFS), has found deficient money laundering controls in outsourcing of work by StanChart to India, thus exposing the US financial system to terror financing and other risks.

The findings in these two separate probes have come at a time when the voices against outsourcing of jobs to India and other locations are gaining momentum in the US, ahead of the Presidential elections in November.

In an order last night, the DFS accused StanChart of hiding secret transactions involving USD 250 billion with Iran -- leaving the US financial system vulnerable to terrorists, weapons dealers, drug kingpins and corrupt regimes.

The DFS probe found that SCB had assured the New York state in May 2010 that it would take immediate steps to comply with the US Office of Foreign Assets Control (OFAC) sanctions. However, another regulatory examination in 2011 found continuing and significant Anti Money Laundering failures.

Among these, the bank was outsourcing its "entire OFAC compliance process for the New York branch to Chennai, India, with no evidence of any oversight or communication between the Chennai and the New York offices."

The OFAC is the designated US government agency for preparing list of entities with whom US citizens and entities are barred from doing any business.

Standard Chartered slumps 20% in India

The Standard Chartered Bank stock today plunged by up to 24 per cent in the Indian and UK markets, as the New York state in the US threatened to revoke its licence and charged it of USD 250 billion worth secret transactions with Iran.

At the Bombay Stock Exchange, the scrip fell 19.97 per cent to hit its lowest permissible limit for the day at Rs 83.15. On the NSE, the scrip was down 19.97 per cent at Rs 82.95.

At the London Stock Exchange, Standard Chartered shares plunged 23.9 per cent to 1,119 pence in morning trade.

The New York state has threatened to revoke the bank's licence after charging the UK-based global banking giant of operating as a "rogue institution" and hiding over 60,000 transactions worth USD 250 billion with Iran.

While the bank has refuted the charges saying that more than 99.9 per cent of its Iran-related transactions complied with the US regulations, the New York State Department of Financial Services (DFS) has charged StanChart of exposing the US financial systems to terrorists, drug kingpins and weapon dealers through its transactions with Iran for about 10 years.

In a 27-page order, the Superintendent of Financial Services Benjamin Lawsky of DFS said that "grounds exist for revocation of Standard Chartered Bank's licence to operate in the State of New York and that interim measures must be taken to protect the public interest."

The order accused Standard Chartered of operating as a "rogue institution" which was "motivated by greed."

Reacting to the regulator's order, Standard Chartered said it "strongly rejects" the position and portrayal of facts made by DFS.

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United States James
August 8. 2012 02:46

USA must stem hate crimes.

Go to India and see the racism there.

Search "An unhappy New Yorker in India".

Watch the racism firsthand as the the guy working at the train ticket window sees the American coming and slams the place closed on him.

What goes around comes around baby. These people come here and bring their anti-American, anti-white racism and takeover mentality with them and then wonder why it gets thrown back in their faces.

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United States Indian Tatti
August 8. 2012 04:39
Indian Tatti

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Canada ezygoer
August 8. 2012 10:25

CEO/CIO's who outsource must be put down.

They are the scum who are worse than the beneficiaries of the easy money gravy train. India Inc. seems to have them in their pockets.

Next are members of Congress who pass the visa laws.

No protection for US workers at all.

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United States Indian_Tatti
August 8. 2012 23:51

As offshoring grows, banks grapple with oversight

(Reuters) - Global banks that ship increasingly sensitive and sophisticated work overseas to save costs will be forced to step up oversight of back office operations after industry scandals point to lapses involving offshore units in India.

What started a decade ago as call centres staffed by young Indians faking Western accents to sell credit cards and field routine queries has grown into a core function for banks, handling work from risk and fraud management to finance and accounting.

The New York state banking regulator's accusation this week that London-based Standard Chartered (STAN.L) hid $250 billion in transactions with Iran and did not give proper oversight to its back office operation in Chennai underscores the perils of shipping sensitive work to far-flung locations.

"When you offshore, the biggest challenge is not at the offshore end but it's on the onshore end and the management of the offshore operations. And these companies are underinvested in that," said Bundeep Singh Rangar, chairman of London-based IndusView Advisors.

"If they don't put (in) enough oversight, governance procedures and practices, then you will have a problem with the satellite centre, whether that is located onshore or offshore," said Rangar, whose firm advises foreign companies, including technology firms, on doing business in India.

Drawn by an English-speaking population and wages that can be one-fifth those in the West, more than three-quarters of global banks have a direct or third-party offshore presence in India.

Bank of America Merrill Lynch (BAC.N), Barclays (BARC.L), Goldman Sachs (GS.N), HSBC (HSBA.L), JPMorgan (JPM.N) and RBS (RBS.L) are among financial giants employing thousands in India. These wholly owned offshore operations, running around the clock, are known as "captive" centres.

Financial firms such as Citigroup (C.N), Credit Suisse (CSGN.VX) and Aviva (AV.L) are among the biggest clients of Indian IT giants such as Infosys (INFY.NS), Tata Consultancy Services (TCS.NS) and Wipro (WIPR.NS).

The New York regulator rapped Standard Chartered for "outsourcing of the entire OFAC compliance process for the New York branch to Chennai, India, with no evidence of any oversight or communication between the Chennai and the New York offices."

OFAC is the U.S. Office of Foreign Assets Control.


Scope International, Standard Chartered's back office outsourcing centre, employs more than 8,500 people in India.

"Over the course of the years, these captive centres have matured to an extent that they are doing a lot of high-value works as well," said Arup Roy, principal analyst in Mumbai at technology research firm Gartner.

The Standard Chartered issue, he said, would "lead to much greater level of scrutiny, and the governance processes and the risk and compliance processes would be under the lens".

Standard Chartered said it has been in talks with U.S. authorities over its Iran transactions since early 2010 and said the public accusations by New York came as a shock.

On Wednesday, it won some help from Britain's central bank governor, who said the various regulators should coordinate action and publish findings only when investigations are complete.

While shipping of jobs by global banks to low-cost locations will continue, analysts said banks would have to invest more to strengthen internal processes and controls.

"What I have seen is that a lot of these discussions happen internally or in-house because security is obviously a dominant area of concern and by virtue of that a lot of them follow the book as they see," said Mayur Sahni, a Singapore-based senior market analyst for IDC Asia/Pacific. "But they don't revise the book when the newer version comes up," he said.


Most banks are reluctant to talk about their offshore operations in India. Standard Chartered, JPMorgan, HSBC and RBS declined to comment when contacted by Reuters, while Barclays, Bank of America Merrill Lynch, and Goldman Sachs did not immediately respond to emails.

Financial services firms can cut costs by one-third or more by shifting work to in-house operations in India.

The global market for back-office offshore services was $4 billion in 2010 and will grow to $9.4 billion by 2015, according to IDC. The financial sector accounts for the biggest share.

The New York regulator's accusations come close on the heels of a backlash in Britain after customers of RBS and its Natwest unit were left locked out of their accounts for a week due to an inexperienced IT operator in Hyderabad, media reports said.

A recent U.S. Senate probe criticising anti-money laundering controls at HSBC identified deficiencies in the work done by its "offshore reviewers" in India, according to media reports.

HSBC has one of the biggest captive operations in India, with about 20,000 people spread across seven locations.

In 2006, the security of Indian back office operations came under scrutiny after a British TV channel's investigation showed that criminal networks in India traded British consumers' account details and other commercial information for profit.

In the same year, a worker at HSBC's Bangalore centre was arrested after being caught by internal security for taking funds from British bank customers.

"When you offshore, you can't sort of offshore your problems. You have got to have a proper structure in place and you have to have more centralisation of processes," said IndusView's Rangar.

"And once you do that, it really shouldn't matter as to whether you are based in Houston or Edinburgh or Chennai."

(Edting by Tony Munroe and Jeremy Laurence)

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United States Still seeing it
August 13. 2012 12:42
Still seeing it

Oh, LA DI DA - the Wall Street Journal last week has a short video of an interview with someone at Infosys who blithly tells us that it is 'easier to bring someone to the East Coast of the US from India than it is to transfer someone from the West Coast of the US to the East Coast'.  Lies and prevarication.  

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