January 12, 2009
Federal officials recently announced the largest settlement ever in a work
site enforcement case. IFCO Systems North America, the largest pallet management
services company in the country, agreed to pay $20.7 million in fines and back
pay to resolve a three-year criminal investigation relating to the hiring of
more than 1,000 undocumented workers. John P. Torres, the acting assistant
secretary of homeland security for Immigration and Customs Enforcement (ICE),
said it would “send a powerful message that ICE will investigate and bring to
justice companies which hire illegal workers.”
According to an ICE press release, IFCO employees “failed to take significant
measures to verify the social security numbers of . . . workers, and . . .
failed to make any effort to address the use of invalid social security numbers
by numerous . . . employees.” ICE also stated that IFCO had agreed to implement
a “precedent-setting, compliance and reporting program, designed to prevent the
employment of illegal aliens at IFCO plants in the future.” IFCO remains bound
by the agreement until 2012, at which time the government would not seek
prosecution provided that IFCO was in full compliance with all terms of its
settlement agreement. The government had previously charged twelve IFCO managers
with criminal offenses. Nine pled guilty, while three face trial.
The agreement comes at a time in which the rate of immigration prosecutions
continues to rise sharply. According to recently released data, federal
prosecution of immigration cases nearly doubled in 2008, as the year saw more
than 70,000 immigration cases. Meanwhile, federal prosecutions of other crimes
have remained steady or declined in recent years – e.g. weapons,
organized crime, etc..
The IFCO settlement and the sharp rise in immigration prosecutions serve as
reminders of the need for companies to implement formal immigration law
compliance mechanisms, and to address any potential problems before they expose
companies and their employees to criminal liability.