Two of the seven former IFCO employees indicted for criminal charges in connection with immigration raids conducted in 2006 have entered guilty pleas in federal court. William Hoskins, 33, and Tomas Soto Castillo, 56, both of Cincinnati, Ohio pled guilty to a felony conspiracy to harbor illegal aliens and to encourage and induce illegal aliens to remain in the United States. Soto Castillo also pled guilty to a felony conspiracy to knowingly hire illegal aliens.
Hoskins and Soto Castillo were former New Market Development managers for the Pallet Management Division of IFCO Systems North America. They pled guilty before Judge Lawrence Kahn in the U.S. District Court for Northern New York. Due to the time limitations before going to press, IFCO could not be reached for comment about the latest guilty pleas by former employees.
Hoskins faces a potential sentence of up to ten years in prison while Soto Castillo could be imprisoned for up to five years. Both defendants face the possibility of a fine of up to $250,000.
On January 23, 2009, Hoskins, Soto Castillo and five IFCO executives were indicted by a grand jury in the Northern District of New York for immigration, tax and social security related felony offenses.
Five IFCO executives are challenging the criminal charges against them. And a trial is scheduled to begin in late April 2010. These defendants are Haskell “Buddy” Ross of Lakeland, Fla. (Senior Vice President – Human Resources); Christopher Tiesman of Spring, Texas (Senior Vice President – Finance and Accounting); Charles Davidson of San Antonio, Texas (Vice President of New Market Development, formerly Director of New Market Development); Kenneth Gines Jr. of Spring, Texas (Controller – Pallet Services); and Wendy Mudra of Tampa, Fla. (Human Resources Manager).
The prosecution stems from the government’s investigation of illegal immigration and employment-related practices at IFCO’s pallet management service facilities. The investigation began following a tip to ICE in February 2005, that illegal alien laborers at the Albany IFCO plant were observed ripping up their W-2 forms.
On April 19, 2006, U.S. Immigration and Customs Enforcement (ICE) agents, in concert with other federal and state authorities, conducted work site enforcement raids at over 40 IFCO pallet plants in 26 states. This action resulted in the detention of 1,181 illegal aliens working at those plants.
The United States Attorney’s Office has previously prosecuted several IFCO managers for criminal offenses associated with the employment of illegal alien workers at IFCO pallet plants. Including the pleas announced today, eleven IFCO managers have entered guilty pleas related to hiring illegals and other violation of U.S. immigration, tax and workplace law.
In December 2008, the United States government reached a record corporate settlement with IFCO, pursuant to which the company agreed to pay $20.7 million dollars in civil forfeitures and penalties over four years. The settlement amount included $2.6 million dollars in back pay and penalties relating to IFCO’s overtime violations with respect to 1,700 of its pallet workers. IFCO also agreed to pay $18.1 million in civil forfeitures that will be available to support future law enforcement activities. IFCO has been fully compliant with the settlement agreement to date.
IFCO’s agreement in essence shielded the company from prosecution and has allowed it to stay in business as long as the company agrees to follow U.S. laws as well as the letter of the agreement. Depending on what comes out at trial, IFCO may still have to face legal challenges. If new information emerges that indicate illegal actions were defacto company policy instead of the actions of rogue managers, the Department of Justice could always re-open its investigation into the company as a whole or senior management.
The IFCO raids alarmed the pallet industry back in 2006 because one of its largest companies became the poster child for aggressive enforcement of U.S. immigration and labor laws. Government analysis of IFCO’s payroll information suggests that as many as 6,000 illegal aliens worked at IFCO pallet plants from 2003 to April 2006.
IFCO received repeated notice from the Social Security Administration (SSA) going back as far as 2000 noting irregularities in the social security numbers used for employment purposes by many of its pallet workers. According to federal prosecutors, IFCO, its managers and employees, failed to take significant measures to verify the social security numbers of these workers.
Since the Bush administration began to crack down on the hiring of illegal workers in 2006, the Department of Homeland Security has developed guidelines to help determine the work eligibility of new hires while encouraging the use of E-Verify, an Internet-based system offered by the federal government to help compare employee information submitted on I-9 Forms with Social Security data.
The federal government has targeted companies that blatantly ignore immigration laws or traffic in illegal aliens. Companies that have a legal system in place and follow it should be safe from prosecution even if it does have illegal immigrants working there under false pretenses. The key things to remember are to have written policies in place for all new hires, follow these rules for every new employee, keep proper I-9 records, consider using E-Verify or other software to check the work status of new hires, and handle any discrepancies in a proper manner.
Employers must keep proper I-9 documentation and screen all new hires. While employers and their agents are not expected to be document fraud experts, they should use common sense and follow established procedures. The key is to develop effective programs, train employees on the procedures, and have experienced legal counsel review your policies from time to time.
The Pallet Enterprise will provide an update on the IFCO cases in a future issue.
