INNOVATE. INTEGRATE. TRANSFORM.

Business Solutions with SAP

Guest Worker IT Firms Crash Then Burn When Investigating Visa Fraud

June 11th, 2012 by
SAP Consulting Fraud

Guest Worker Consulting Fraud

Recently a gentleman by the name of Jack Palmer blew the lid on the entire Guest Worker scam at InfoSys.  Anyone who has worked hard to establish their career in SAP (or other IT areas) the old fashioned way, through hard work and perseverance, owes this man a huge debt of gratitude.  He literally exposed the entire fraud and scam of the whole guest worker program by showing how one of the biggest guest worker companies routinely commits fraud.  Mr. Palmer’s case tells the story of how the guest worker program is abused and misused and even defrauds U.S. taxpayers.  His complaint even alleges how they believe Americans are stupid for allowing them to get away with it. 

In a statement to the Senate Judiciary Subcommittee on Immigration, Refugees and Border Security on Tuesday, Jay Palmer, the whistleblower at Infosys, said the company “intentionally violated our visa and tax laws for the purpose of increasing revenues.” Mr. Palmer accused Infosys of frequently violating U.S. visa laws and of staffing multiple client projects with illegal employees, including at Goldman Sachs, American Express, Wal-Mart and Johnson Control, among others [FN6].

It is worthwhile to note for the SAP crowd that several of those big name customers are SAP shops as well.

Mr. Palmer’s willingness to stand up to the guest worker fraud has caused the Department of Justice and the U.S. Attorney’s office to look into the practices of several  Indian guest worker firms who have “unusual” practices related to U.S. IT projects.

In my opinion this has been a very, very long time in coming and maybe only serious prison time will discourage some of the routine abuses of the system.  Please bear in mind that unlike some of my counterparts I could care less about the number of guest workers as long as the FRAUD is stopped.  I don’t mind competing with the very best in the world but I am tired of cleaning up messes from fakes, “freshers” and wannabees.  Enterprise projects are hard enough already and in my opinion it is because of the massive and widespread resume fraud and consulting fraud.  As a result few companies realize the benefits of properly implemented enterprise applications.

Judicial Summary of Palmer v. InfoSys Guest Worker Fraud Case

“This case stems from allegations of visa fraud and retaliation.  Palmer alleges that, while employed as an Infosys consultant, he uncovered evidence of fraud in the procurement of H-1B visas for specialty workers” [FN1].

Palmer says he began digging into how and why Infosys seemed to be bringing in large numbers of workers from its corporate headquarters in Bangalore, India, into the U.S.

Palmer says at first, most came over on H-1B visas. These visas are for people with specialized talents or a level of technical ability that can’t be found among American workers.

When asked if all the people had some special expertise that couldn’t be found in the U.S., Palmer said, “Absolutely not. Not even close. Many of them [are] what we call freshers. People that would just come over, whoever they could get to come over. Whoever got accepted for a visa.”

Many of the people brought in, in fact, didn’t know what they were doing at all, Palmer said. “There was not a project or program that I was involved in that we did not remove somebody because they had no knowledge of what they were doing,” he said.

When the U.S. State Department began to limit the number of H-1B visas, Palmer says Infosys began using another type of visa, the B-1. The B-1 is meant for employees who are traveling to consult with associates, attend training or a convention. But Palmer says the employees were brought in not for meetings, but for full time jobs.

Palmer said the jobs were in “Everything from coding software to testing software to fixing software to installing.”

Palmer said, “They could outbid everybody or underbid everybody on every contract (because they were paying less.) For example…if I’m gonna pay you $15,000 a year why would I pay an American or a legal worker $65,000 a year? It makes no – it’s just economics.”

And Palmer says the B-1 workers never paid U.S. taxes because they received their salaries from India.

“They’re basically a lot of times being paid on a cash card or a debit card where money was put in their account,” Palmer said. “And the fact is, is they’re just taking that money out and they’re never paying U.S. taxes.”

[O]ne of Palmer’s most serious allegations is that top company executives not only knew of the alleged fraud, but wanted to expand on it to increase profits. Palmer says during a 2010 meeting at Infosys’ corporate headquarters in Bangalore the practice was discussed with a group of executives, including a senior vice president.

Palmer told CBS News, “There [were] some conversations about how to increase the share price, which is – in America is the stock price. So it’s really about getting people over no matter what the cost or whatever. And you know, I think that’s the first time I heard the term, you know, ‘Americans are stupid.'”

According to Palmer, telling documents come from an internal Infosys website. One document appears to be a “do’s and don’ts” list that gives instructions on how to get B-1 visa requests by the U.S. State Department, telling managers not to mention things like work or employment on their applications or in interviews with U.S. Customs and Border Patrol agents.

When asked when he saw the information on the internal website what struck him, Palmer said, “Intent. Deliberate. Not even trying to follow the spirit of the law.”

When asked if the internal document on the website was an instruction guide on how to beat the system, Palmer replied, “Yes, in my opinion, absolutely.”  [FN2]

Legal Grounds for Palmer’s Civil Lawsuit Against InfoSys

Jack Palmer’s CIVIL legal claims and grounds for a lawsuit against InfoSys consist of the following [FN1]:

  • intentional infliction of emotional distress
  • negligent hiring, training, monitoring and supervising
  • legal misrepresentation
  • breach of contract

Americans and conscientious foreign workers can likely follow Mr. Palmer’s example and help to stop the blatant fraud in the system. 

There are likely additional grounds to sue as well.  There are also potential civil or criminal legal theories for unfair and deceptive trade practices, RICO (Racketeering and Corrupt Organization), Mail Fraud, etc.

There may be Corporate and Personal Liability for Fake Consultants, even by those companies who hire outside system integrators if an employee indicates unqualified, fake, or fraudulent consultants are being used by the system vendor.  The key is in raising the concerns about the frauds within the organization. 

Ongoing Criminal Investigations for Guest Worker IT Firms

As I mentioned, InfoSys is NOT alone in this.  InfoSys is just the tip of the iceberg as there is still a massive amount of Visa Fraud still going on today.  How many more courageous Americans will stand up and be counted to end the widespread, ridiculous FRAUD in the IT space?

While there are a few media reports, few if any of them clearly reference that there are CRIMINAL investigations going on as well as Palmer’s civil suit for damages.  While the extensive excerpts from CBS News deal with InfoSys there are several other guest worker programs that are under CRMINAL investigation as well by the U.S. Attorney’s office in the Eastern District of Texas. 

  • Vision Systems Group Inc. (IT Guest Worker Visa Fraud) [FN3]

The companies that are the subject of this investigation have asserted that the foreign workers have been brought to the U.S. to fill existing vacancies. However, the companies allegedly have not always had jobs available for these workers, thereby placing them in non-pay status after they arrive in the United States. In some cases, the foreign workers have allegedly been placed in jobs and locations not previously certified by the Department of Labor, displacing qualified American workers and violating prevailing wage laws.

The companies and foreign workers have allegedly submitted false statements and documents in support of their visa petitions. The false statements and documents were mailed or wired to state and federal agencies in support of the visa applications. The companies are suspected of visa fraud, mail fraud, wire fraud, money laundering and conspiracy.

  • Mumbai-based Larsen & Toubro (IT Guest Worker Visa Fraud) [FN4]

[The Complainant] Pai’s job in human resources at Larsen & Toubro in New Jersey adds a new dimension to this case.

In her role as human resources manager, Pai was required to help process visa-related documents. She alleges that immigration fraud “appeared to be rampant” at the company, according to the lawsuit.

This lawsuit is similar to one filed against another major Indian firm, Infosys.

While I don’t think I could be accused of being pro-union I can certainly agree with much of what the report from the AFL-CIO has uncovered related to guest worker fraud.  They have done extensive research in their 60+ page report entitled “Gaming the System 2012” [FN5].

 —————————-

[FN1] These are quotes or excerpts from the Judge’s Order in Palmer v. InfoSys order denying arbitration, Docket #10, November 9, 2011 pages 1 – 2. http://www.r3now.com/1/Palmer-Infosys-10.pdf

[FN2] CBS News – Whistleblower calls out IT giant over U.S. jobs, April 12,2012.  http://www.cbsnews.com/8301-505263_162-57412896/whistleblower-calls-out-it-giant-over-u.s-jobs/ (retrieved June 10, 2012)

[FN3] http://www.desicrunch.com/Wiki/Default.aspx?page=Abuse%20and%20Fraud,%20H-1B%20and%20L-1,%20for%20article (retrieved June 10, 2012)

[FN4] Computer World online.  ‘Massive’ visa fraud alleged in lawsuit against Indian firm, April 4, 2012.  http://www.computerworld.com/s/article/9225847/_Massive_visa_fraud_alleged_in_lawsuit_against_Indian_firm (retrieved June 10, 2012)

[FN5] Gaming the System 2012: Guest Worker Visa Programs and Professional and Technical Workers in the U.S., AFL-CIO, Department for Professional Employees.  http://dpeaflcio.org/wp-content/uploads/Gaming-the-System-2012-Revised.pdf (retrieved June 10, 2012)

[FN6] Wall Street Journal Blogs.  http://blogs.wsj.com/indiarealtime/2011/07/28/infosys-employee-testifies-on-alleged-visa-fraud/ (retrieved June 10, 2012)

Related Posts:

Being an Expert Witness in an SAP System Integrator or Consultant Fraud Trial

May 29th, 2012 by
SAP Expert Witness

SAP Expert Witness

Those who have followed this site for any period of time are probably aware that one of my passions is to see the whole business application space “cleaned up.”

A recent group of comments and private messages I have received about consultants who knowingly commit fraud really got me aggravated.  I’ve actually received e-mails through my site from these “freshers” who would brag about having their fake resume ready and they were excited about actually conning their first customer.  Enough already, I decided to do a series on helping expert witnesses through the litigation process against some of these unscrupulous tactics.  

Although I am NOT, NOT, NOT, a fan of litigation I believe we have reached an unfortunate time in the business application consulting space where something must be done.  There are too many fraudulent consultants, too many staffing firms which facilitate and in some cases participate in this fraud, and too many system integrators who take advantage of clients who do not fully appreciate how SAP projects work.  Please understand this is not legal advice, for that you must consult an attorney. 

You Just Got Called to be an Expert Witness in an SAP, Oracle, or other Business Application Lawsuit

Being called upon or contacted to be an expert witness in a court case for your field of expertise can be an exciting and frightening proposition.  Over the years I’ve been contacted by lawyers and expert witness brokers to do exactly that.  I’ve never taken them up on the offer but have taken the time to understand the process.  If you want to be an “expert” witness in some multi-million dollar litigation about a failed SAP, Oracle, or other business software implementation you will want to prepare for…

What Can You Expect?

First, be prepared to have your writings, resume, personal life, and your past carefully scrutinized in tremendous detail.  Anything you’ve written online, in publications, or even in social media spaces is fair game for legal evaluation over your judgment as an expert witness.  Consider carefully whether you want past events that might be “colored” to affect your professional judgment raised in a court of law (and no, that is NOT why I haven’t accepted any expert witness assignments ;) . 

What are the Legal Requirements for Expert Witness Testimony

First of all expert testimony in the United States is generally governed by Federal Rule of Evidence 702.  That rule governs “technical or other specialized” testimony from experts and virtually every U.S. State has either the same rule or some equivalent.  However, each state can have different ideas of what that Rule actually means in their own state level courts so it is really important to understand what state a case is in, or whether it is in federal court.  In legal terms this is related to “venue” or what court the case will be tried in.  Is it is state or federal venue.

Standards for Admitting Expert Testimony

Two key U.S. Supreme Court cases govern the admissibility of expert testimony.  The two cases which either open the door, or close it, for expert testimony are often referred to as “Frye” and “Daubert.”  To be an expert witness you really should be familiar with these two cases and what they mean to you if you consider offering expert testimony. 

These legal cases use two different standards which are in use to some extent throughout the United States.  The Frye case comes from a Washington D.C. Circuit court case with the case style (or caption) of Frye v. US, 293 F. 1013, 34 A.L.R. 145 (D.C. Cir 1923).  That case established a “wide acceptance” standard meaning that something should not be admitted into evidence unless the subject matter being testified about covered something that was widely accepted.   This usually (although not always) meant that there was lots of published material that had been peer reviewed or scrutinized in other ways.   An expert under Frye addresses issues almost exclusively from the “wide acceptance” standpoint.  Keep in mind that the “wide acceptance” standard may have allowed the “flat earth” society to have prevailed in court in the Middle Ages.

As both science and technology continued to mature at a faster pace additional clarification was added in another U.S. Supreme Court legal case which is often cited as Daubert v. Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993).  That case established newer and more robust “scientific methods” which must be considered before accepting expert testimony.

While there is no complete checklist, and there are several additional factors to consider, one U.S. Federal Appeals Court has summarized a short list of a few key issues which should be considered for the Daubert standard.  These include:

  1. Whether the theory or technique of the expert can be tested.
  2. Whether there is a known, or potential, rate of error that can be determined with some level of assurance.
  3. Whether there has been any peer review and publication (think Frye here).
  4. Whether the theory or technique is generally accepted in the expert’s community (again, think Frye).  For us it would be in the SAP community.

The Gatekeeper Role to Prevent Unreliable Expert Testimony

The role of the judge in court cases involving expert witnesses is to act as a “gatekeeper” by letting in only those experts who at the most basic meet two key criteria: the testimony has some measure of reliability by fitting the criteria of either of the cases above, and the testimony directly relates to some set of facts or circumstances of the case that the expert will help everyone understand.  The expert’s testimony should help bring enough clarity that the judge and jury can more easily make an informed decision about some fact or issue in the case.

Which Expert Testimony Legal Standard to Use?

It is important to understand that if you end up litigating as an expert witness in a state court case in the United States rather than a federal case you may be subject to different standards and requirements as an expert witness.  Again, which venue is this, is it a state court case or a federal case?  For example, as of 2011, the following states use the following expert witness standards as defined in the legal cases above [FN1]:

[A]s many as 34 state jurisdictions have adopted the U.S. Supreme Court’s standards articulated in Daubert. Those states include Alaska, Arizona, Arkansas, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Indiana, Iowa, Kentucky, Louisiana, Maine, Massachusetts, Michigan, Mississippi, Montana, Nebraska, New Hampshire, New Mexico, Ohio, Oklahoma, Oregon, Rhode Island, South Dakota, Tennessee, Texas, Utah, Vermont, West Virginia, and Wyoming – and most recently in 2011 Alabama and Wisconsin.

Currently 9 states and the District of Columbia follow the Frye rule – either specifically rejecting Daubert or choosing not to apply Daubert principles. These include California, the District of Columbia, Florida, Illinois, Kansas, Maryland, Minnesota, New York, Pennsylvania, and Washington.

Meanwhile, 7 states have their own unique approach and utilize neither Daubert nor Frye: Missouri, Nevada, New Jersey, North Carolina, North Dakota, South Carolina, and Virginia.

This is more than enough of an introduction to the legal standards. There are a few areas to focus on here.  There is the consulting fraud itself – fake skills, experience, and backgrounds.  There are considerations for how much affect the consulting fraud has had on a project (i.e. damages, etc.) and then there are potentially fraudulent system integrator tactics which are designed to maximize their profit while taking advantage of the client. 

================

[FN1] Daubert, Frye … or Both? Tracking Florida’s Buy-In. http://www.ims-expertservices.com/blog/2012/daubert-frye-or-both/

Related Posts:

3 Development Phases for SAP Center of Excellence Maturity

May 14th, 2012 by
SAP CoE Maturity

SAP CoE Maturity

Before we get into the substance of HOW TO build a next generation IT organization that is integrated with business a quick review is in order.

Last week’s post on SAP Service Provider to Business Peer Through Center of Excellence Maturity proposed the direct maturity of the SAP IT organization.  The key principle is there are three stages or strata of Organizational Change Management Inside the SAP IT Support Organization These stages create clear distinctions between SAP Service Delivery versus Value Delivery

This week is an overview of the development and maturity details to use SAP as a Change Enabler through SAP Enabled Business Transformation for IT Leadership.  Please keep in mind this organizational development overview is just one component of the Series on SAP Competency Center or SAP Center of Excellence.  The need to continue your Steering Committee Governance for an SAP Center of Excellence cannot be ignored.  Properly formed and instituted your SAP steering committee is a key enabler for business to IT convergence. 

To achieve SAP IT Convergence Beyond Business to IT Alignment requires a senior leader change champion to make this a deliberate and accountable effort.  This is not intended to be a theoretical discussion but instead it is an action plan.  The entire initiative is as a project and needs a project plan, deliverables, key milestones, assigned resources, etc.   All of the structure and processes will need to be defined within your IT organization to move this forward.

SAP Center of Excellence Maturity Development Level 1 – Internal Focus on IT Operations (Service Provider)

Internal focus is an “all hands on deck” effort.  If internal focus, or basic IT service delivery is suffering then everyone within the IT organization must work to ensure your systems are meeting business needs.  You will not gain enough trust of the business community to become a partner or peer until the basic infrastructure works. Some of the key development in this phase includes:

  • A skills matrix
  • IT staff training and development plans
  • Clear SLA requirements
  • Consistent and regular feedback and coaching

Typical activities for service delivery include:

  • Help desk functions
  • Data maintenance
  • Security and authorizations
  • Technical infrastructure (servers, system performance, database maintenance, network, etc)
  • System access (desktop, remote, mobile, etc).
  • Hardware procurement
  • Knowledge (information) base development (Wikis, SharePoint, collaboration tools, etc.)
  • Knowledge transfer to the user community (formal and informal training)
  • Super user development

Skills development focuses on SAP or technical domain competence

  • Application module specialties (SD, MM, PP, SRM, CRM, FI, APO, BObj, etc)
  • Programming languages (ABAP, Java, PHP, etc.)
  • Infrastructure (Cisco, routers, VOIP, IPv6, DHCP, LDAP, etc.)
  • SAP Solution Manager use
  • Effective presentation skills

SAP Center of Excellence Maturity Development Level 2 – SAP IT Integration With the Broader Business Enterprise (Business Partner)

At this stage, depending on the size of your SAP or IT organization, there are 2 levels of leadership here: 1) delivery management, and 2) process management while developing methodologies, tools, templates, and controls.  A key part of the process management is the development of KPI indexes.  Typical activities for business (enterprise) integration include:

  • Requirements gathering
  • Blueprinting
  • System & solution architecture
  • Business case development (cost and value)
  • Knowledge transfer
  • Subject matter expert training
  • Super user training
  • KPI and PPI* development with analytics
  • Project management
  • Team and project leadership
  • Basic supervisory tasks
  • Mentoring, coaching, and staff development
  • Budget adherence
  • Sourcing and supplier management
  • SAP Solution Manager setup and maintenance for project delivery as well as BPM

Skills development focuses on project delivery and management.

  • Facilitation, meeting, and time management skills
  • Project management (training and certification)
  • Managing conflict
  • Supervisory & leadership
  • Negotiation skills
  • Organizational Change Management
  • Total Quality Management
  • Business Process modeling

SAP Center of Excellence Maturity Development Level 3 – Strategic Development Around the Marketplace and Competitors (Business Peer)

Split development track for leaders – 1) product or service engineering support (i.e. the “innovation” track) or 2) sales and marketing (i.e. customer focus).  Typical activities for value added strategic technology convergence include:

  • BPI* development and analytics
  • Marketplace analytics with solution proposals
  • Customer analytics with solution proposals
  • Value analysis – ROI assessment and benefit compliance
  • Cost analysis – TCO assessment and cost savings
  • Business case review for strategic fit
  • Technology roadmap for system & solution architecture
  • System architecture integration with business process management
  • Program management
  • Program & project budget development
  • Project audits / QA’s
  • Mentoring, coaching, and development of level 2 participants
  • Vendor management

Skills development focuses on business drivers, marketplace competitive pressures, sales, and senior leadership.

  • Advertising principles
  • Business statistics
  • Market research
  • Sales management
  • International marketing
  • Sales models
  • Organizational development
  • Coaching and leadership
  • Delegation
  • Strategic planning

Conclusion on SAP Center of Excellence Maturity Development

This analysis provides a framework for development of a world class, fully integrated SAP IT organization.  However, this framework only scratches the surface of a much broader and more important topic–, Organizational Change Management Inside the SAP IT Support Organization.

Communication is One Key to Business and IT Integration

One of the most critical components of a change management program is not listed above in any of the bullet points – developing communication channels.  Maybe this is naïve of me but I would expect that actively and aggressively developing clear and open lines of communication between IT at all levels with the business would be assumed.  Developing an overall communication program and plans is a basic part of any change management initiative.

There is a significant amount of additional guidance for developing your SAP Center of Excellence in the Series on SAP Competency Center or SAP Center of Excellence.  A systematic approach, including key milestones to measure progress against are important elements to success.  To that end I hope this framework contributes to the dialog and direction of future SAP IT organization maturity.

========

* An upcoming post in the future will look in detail at this concept of “KPI, PPI, and BPI” as Key Performance Indicators, Process Performance Indicators, and then finally Business Performance Indicators.




Popular Searches:


  • Building a SAP COE
  • center of excellence phases
  • organizational structure for SAP Center of Excellence

Related Posts: