Imagine finding yourself as the center of a federal investigation for something that you didn’t do. Imagine losing millions of dollars in the process. I just described the nightmare that Jack Amoruso, president and owner of Lumber & Things, Inc. just endured.
Last year, Jack and his companies were implicated in a drug conspiracy involving the distribution of cocaine hydrochloride and marijuana. He was recently cleared of wrongdoing in connection to those charges after an extensive two-year investigation and subsequent federal indictments.
Lumber & Things, Inc. is a wood pallet manufacturing and recycling company located in Keyser, West Va. It is a major player in the West Va. pallet market. Jack Amoruso also started two other companies – St. Christopher Trucking Inc. and Springlick Pallet.
Jack said, “This was a very costly nightmare for me and my company. In this case, my innocence cost millions of dollars to prove.”
Jack was under surveillance for a long time. He personally underwent a lie detector test to prove his innocence. His reputation was trashed by competitors. And he had to fight hard to hold onto his company.
It all started with a raid by the FBI in 2008 and ended with the charges being dismissed in federal court in July. Criminal charges are still pending against others although Jack and his companies (Lumber & Things, St. Christopher Trucking and Springlick Pallet) have been cleared in the drug charges, according to Fawn Thomas of the U.S. Attorney’s Office.
Numerous industry sources confirmed that Jack and his businesses were implicated due to the marginal involvement in the companies of his son and others implicated in the drug conspiracy. Jack said, “It is fairly rare that a federal drug case gets outright dismissed.”
It appears that the federal prosecutors were intent on finding something that they could pin on Jack. Although the drug charges were dropped, federal prosecutors filed a separate charge of conspiracy to harbor illegal aliens. When the FBI seized records and conducted a raid in 2008, agents took I-9 forms and discovered that five employees working at the facility were not authorized to work in the country.
Given the fact that the combined companies employ over 200 people, finding five illegal aliens in this industry doesn’t seem like a major violation. Jack’s actions are far less egregious than the activity engaged by managers of IFCO Systems a few years ago. The IFCO incident was a national event. It was the largest raid of its kind at the time. In both cases, the federal government made sure to get a payday. This just highlights the high price of having any illegal aliens on your payroll and getting caught in the sights of federal authorities.
Jack said that he pled guilty on the conspiracy to harbor illegal alien charge because he was tired of fighting the government and wanted to move on with life. He explained, “In my opinion, it would have gone on forever.”
The court gave Jack a sentence of probation in connection with his plea agreement, which required Jack’s companies to participate in E-Verify, the federal government’s online verification system for new hires. Federal authorities also seized $552,655.90 from businesses owned by Amoruso.
Fawn Thomas confirmed that these monies were surrendered to the federal government as part of the plea agreement to the immigration charge although she declined to explain the negotiations. According to court records, the majority of this money was taken from St. Christopher Trucking and Springlick Pallet. It appears that the courts originally obtained this money because John Amoruso, Jack’s son, was listed as a corporate officer of those two companies.
Even though monies were originally seized due to the drug charges, federal statutes allow the federal government to keep it based on the asset forfeiture provisions. Federal and state asset forfeiture laws can result in extremely harsh consequences for companies or individuals unfortunate enough to have their property used in connection with any “criminal activity.”
What is asset forfeiture? Asset forfeiture is the process by which the government confiscates property that has been used in connection with, or represents the proceeds of, illegal conduct.
Although the law requires the government to show a “substantial connection” between the property and criminal activity in order for such property to be forfeited, many people would be dismayed by the low level of “connection” courts have upheld to be “substantial.”
The Jack Amoruso case reminds me of why I first wanted to be a journalist. Years ago I reported on Ocie Mills who went to jail for 21 months after filling a small parcel of land he owned. Mills dumped 19 loads of sand on a quarter-acre lot near a bay – with the State of Florida’s permission. Federal authorities didn’t agree, and they proceeded to make Mills an example for anyone else who would challenge their authority when it came to wetlands protection. Since Mills wouldn’t play ball and pay a fine, federal prosecutors decided to put Ocie and his son in prison. Having reviewed the facts in this case, I firmly believe that the Mills incident was a travesty of justice.
The Jack Amoruso case is less clear cut. But I certainly don’t think his actions warrant a seizure of almost a half million dollars. Based on the information that is publicly available, it doesn’t appear that Jack did anything out of the ordinary compared to most pallet companies. He could have taken a few more steps to provide protection from prosecution. But there doesn’t appear to be a mass conspiracy as proven in the IFCO cases. If Amoruso can lose more than $500,000 for his actions, every pallet company that hires Hispanic or other ethnic workers should take notice.
There are a number of lessons in this tragic story. The most obvious is be careful who you include as a corporate officer. This includes family. Having the wrong person connected to your company can expose your business to undue risk.
Second, proving innocence is never an easy matter when it comes to a federal investigation. The government invests lots of money in investigations, and federal prosecutors don’t like to be wrong. If you get in a war of wits with the federal government, you are facing a formidable force. Legal battles sap company resources and energy.
Third, the asset forfeiture statues give the government broad latitude to confiscate and retain property from suspect companies. This means that any “illegal” activity can jeopardize an entire business. That is why I believe that companies should have firm policies in place regarding activities that can get a business in trouble with federal authorities.
One of the most obvious places where a pallet or lumber company may be vulnerable is accidentally hiring illegal aliens. Companies should develop policies that effectively verify the work authorization status of each new employee. It is important that all new hires be treated the same to avoid exposure to discrimination lawsuits. Participation in the federal government’s E-Verify database is free. While E-Verify is far from foolproof, it can help provide additional credibility in court to demonstrate that a company is trying to abide by federal law. E-Verify uses data from government records, primarily Social Security information, to compare data submitted on I-9 forms with government records.
The U.S. Immigration and Customs Enforcement (ICE) launched an initiative earlier this summer to crackdown on illegal aliens in the workforce. ICE is conducting audits of I-9 records for 652 companies, which is more than the agency did throughout all of last year. This illustrates ICE’s increased focus on holding employers accountable for their hiring practices and efforts to ensure a legal workforce.
Pallet and lumber companies need to realize that the current downturn may be an ideal time to look at workplace practices that could cause legal problems one day if the feds ever come knocking on the door.
