The IFCO guilty pleadings: what was behind them

The Wall Street Journal (subscription required) on Tuesday 2/27 ran an article about how ICE (Immigration and Customs Enforcement) went after the executives at IFCO, the pallet manufacturer raided last year, for systematically hiring illegal workers. The article contains nuggets of information about ICE’s new strategy – which I have excerpted here. They include patiently collecting information in several states on manager communications; getting Social Security to cooperate in revealing huge mismatches of Soc Sec numbers; and planting an informant. (I have previously posted on IFCO.)
According to an article in the Salt Lake City Tribune, five managers pleaded guilty:
James Rice, 37, of Houston, an executive regional general manager of the Netherlands-based IFCO Systems, pleaded guilty to conspiring to employ illegal workers. Robert Belvin, 43, of Stuart, Fla., a former general manager of the Albany IFCO plant, pleaded guilty to two felony conspiracy charges. They face up to 2 years in prison. Dario Salzano, 36, of Amsterdam, N.Y., Scott Dodge, 44, of Elmira, N.Y., and Michael Ames, 44, of Shrewsbury, Mass., each pleaded guilty Tuesday to one misdemeanor. They could face up to six months in jail and $3,000 in fines for each undocumented worker employed, though they likely will get reduced terms because they cooperated, Sciocchetti said. Charges were pending against two other IFCO managers in Houston and Cincinnati.
Here in addition are some figures from the ICE Fact Sheet on the net:
* The number of criminal arrests in worksite enforcement cases has increased from a mere 25 in Fiscal Year 2002, the last full year under the old INS, to 716 during Fiscal Year 2006 under ICE..
* The number of individuals arrested on administrative immigration violations in worksite enforcement cases has increased from 485 in Fiscal Year 2002, the last full year under the old INS, to 3,667 during Fiscal Year 2006 under ICE.


The Wall Street Journal articles reads:
In 2005, the Department of Homeland Security announced that instead of imposing small fines for sloppy paperwork, its immigration-enforcement branch would flush out “egregious” employers and put them in jail. That demands proof and police work — including undercover informants and secret recordings — more common to drug busts than immigration audits.
Since ICE’s creation in 2003, employer arrests have leapt from 25 in 2002 to 718 in 2006. Only last week, ICE arrested three executives of a Nevada-based janitorial service with national reach. But successful prosecutions have so far largely been limited to smaller labor contractors, restaurant owners, and a company putting up a fence on the Mexican border.
IFCO’s parent, IFCO Systems NV, by contrast, has world-wide sales of nearly $650 million. Registered in Holland and managed out of Houston and Munich, it promotes itself as a smoothly run system, listing Target Corp., Cargill Inc. and Dell Inc. among many corporate customers. Repairing pallets — the rough frames that carry goods from factory to warehouse — is tough work. Up until last April, most IFCO pallet workers were Hispanic.
It was easy for ICE to swoop down on those working illegally. To accuse their bosses of a conspiracy, punishable by prison terms of up to 20 years, was a far greater task. The clues ICE collected, as disclosed in the complaints filed in federal court in Albany, resulted from a combination of lucky tips and accidents. The evidence was backed up by local police work, aggressive surveillance, and the unusual involvement of the Social Security Administration..
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TEST CASE
Immigration Crackdown
Targets Bosses This Time
Fake Papers and a Spy
Foiled IFCO Managers;
‘César’ Wore a Wire
By BARRY NEWMAN
February 27, 2007; Page A1
GUILDERLAND, N.Y. — Early in April of 2005, a man whose friends knew him as César went looking for a job at a wholesale distribution hub near this upstate village. At a workshop run by IFCO Systems North America Inc., the nation’s biggest recycler of wooden pallets, César let the boss know that he was in the country illegally, but would be trying to buy some fake “papers.”
[filing] RELATED READING
See the complaint1 filed by Immigration and Customs Enforcement against IFCO managers.
“That will work,” said Robert Belvin, the 42-year old IFCO site manager.
What Mr. Belvin didn’t know was that César was an undercover informant working for federal immigration enforcers. Or that he was wearing a wire.
The conversation — and many others César recorded — helped build a case that is the biggest test so far of a heavily touted government campaign to control illegal immigration.
A year after César went to work, agents from the Immigration and Customs Enforcement bureau pounced on 52 IFCO workshops in 26 states, arresting 1,187 foreigners. Unlike raids on many other companies — including December’s arrests of 1,282 workers at Swift & Co. — the motivation for the raid on IFCO wasn’t to catch foreigners. It was to catch the Americans who hired them. Seven IFCO middle managers were also arrested that day and charged, in identically worded complaints, under the same felony statute that punishes human smuggling. Five of them, people familiar with the case say, are expected to plead guilty today in the U.S. District Court for the Northern District of New York.
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Neither the company nor its top executives were named in the complaints, which allege that the managers “knowingly conspired with others” to transport, harbor and support undocumented workers for “commercial advantage or private financial gain.” But the investigation isn’t closed. Like any ICE operation today, one immigration official says, the objective is “to move up in the organization.”
In 2005, the Department of Homeland Security announced that instead of imposing small fines for sloppy paperwork, its immigration-enforcement branch would flush out “egregious” employers and put them in jail. That demands proof and police work — including undercover informants and secret recordings — more common to drug busts than immigration audits.
Since ICE’s creation in 2003, employer arrests have leapt from 25 in 2002 to 718 in 2006. Only last week, ICE arrested three executives of a Nevada-based janitorial service with national reach. But successful prosecutions have so far largely been limited to smaller labor contractors, restaurant owners, and a company putting up a fence on the Mexican border.
IFCO’s parent, IFCO Systems NV, by contrast, has world-wide sales of nearly $650 million. Registered in Holland and managed out of Houston and Munich, it promotes itself as a smoothly run system, listing Target Corp., Cargill Inc. and Dell Inc. among many corporate customers. Repairing pallets — the rough frames that carry goods from factory to warehouse — is tough work. Up until last April, most IFCO pallet workers were Hispanic.
It was easy for ICE to swoop down on those working illegally. To accuse their bosses of a conspiracy, punishable by prison terms of up to 20 years, was a far greater task. The clues ICE collected, as disclosed in the complaints filed in federal court in Albany, resulted from a combination of lucky tips and accidents. The evidence was backed up by local police work, aggressive surveillance, and the unusual involvement of the Social Security Administration.
IFCO maintains that nothing points to illegal immigration as part of its formal business model. “We deeply regret that we had even a single ineligible worker on our payroll,” the company said in a written statement. The company declined to comment further on the case.
The government claims that the immigration status of more than half of IFCO’s 5,800 workers in the U.S. was suspect. It is unclear whether the U.S. Attorney in Albany, who is supervising the case, will bring charges against higher-level IFCO executives.
Still, the government’s intrusive new style has petrified other companies that rely on foreign labor. “Everybody thinks these are show trials,” says Amy Peck, an immigration lawyer in Colorado who represents corporate clients. “And at the same time, we’re scared to death about what’s going on.”
[Chart]
The IFCO evidence, she and other lawyers acknowledge, appears to pull back the curtain of “plausible deniability” that effectively allows six million foreigners to work illegally in the U.S. To avoid discriminating, employers have argued for 20 years, they can’t turn away candidates whose papers seem to be genuine. But at one upstate work site, the IFCO complaints allege, that was disingenuous.
The first hint came three months before César applied for a job, when the phone rang at the ICE office in Latham, 10 miles from here. The caller said he worked for IFCO, and said he saw some Spanish-speaking co-workers tearing up their W-2 tax forms. That made the immigration enforcers at ICE very curious: Why would anyone tear up a W-2?
The IFCO worker who phoned said that one of his bosses told him the men didn’t need W-2s because they didn’t file tax returns. “That’s not something you hear every day,” says Julie Myers, the DHS assistant secretary who heads ICE. Her agents decided IFCO was worth watching.
Toward the end of the month, a few IFCO workers were relaxing at the Governor’s Inn, a motel near the pallet shop. “They like to drink,” a Honduran named Reynaldo says now. “They went to the store to get more beer.” (A forklift driver arrested in the raid, he has remained in the area and asked that his full name not be used.) As four men returned to the motel in a Chevrolet, the Guilderland police say, they crashed into a Subaru. Two young women were slightly hurt. The Chevy’s driver jumped out and ran.
The police found the other three men in the motel. Mr. Belvin, the manager of IFCO’s operation, arrived and went with his workers to the police station. All three, the police told Mr. Belvin, had admitted being in the country illegally. Mr. Belvin said that was untrue and that he had the documents to prove it. Mr. Belvin’s lawyer didn’t respond to phone messages seeking comment.
Then, in an unrelated incident in March, a woman called the police to say she had been attacked in a garage by a Hispanic man. An officer sent to the scene found no suspects. But he did interview six men at a nearby house in connection with the woman’s complaint. The men all said they worked for IFCO. The police, recalling IFCO’s connection to the earlier accident, notified ICE. Senior inspector John Tashjian said, “If there’s any suspicion they’re undocumented, we do that.”
Responding, ICE agents found five men who didn’t belong in the country and arrested them. In sworn statements, a Honduran said he didn’t show any documents when IFCO hired him and a Salvadoran said he was told “that papers would be provided to him later.”
It wasn’t long before ICE decided to plant its spy.
“I have never heard of that being done in an immigration work-site enforcement action, never,” says Paul Zulkie, an attorney who advises corporations on immigration policies and is also president of the American Immigration Law Foundation.
But ICE’s orientation has changed. Many of its agents came out of the former Customs Service, which enforced import and export regulations. For them, getting evidence to prove that managers know full well that documents are fake means peeking behind the paperwork.
According to the complaints, ICE’s informant had himself been arrested by the Border Patrol for entering the country illegally. After he assisted ICE in a human-smuggling case in Texas, the agency gave him temporary leave to remain in the U.S. — plus a stipend — in exchange for his cooperation to help with the IFCO investigation. In April, the complaints say, he introduced himself to some IFCO workers at a grocery.
The informant isn’t cited by name in the complaint. But piecing together bits of information, former IFCO workers say they knew him as César, a Portuguese-speaking forklift driver.
The complaints detail how he ultimately got his fake green card and fake Social Security card directly from ICE. The name on the Social Security card wasn’t the one he had given IFCO. Nor was the name on the green card. The picture, say the complaints, was of someone else. César showed the documents to Mr. Belvin’s boss, James Rice.
Mr. Rice, then 35 years old, was a development manager who had come to open the Guilderland operation the previous October. But because it was a start-up, people close to the company say, its managers were having a hard time finding workers. Looking at the photo on the fake green card while César recorded him, Mr. Rice said, “It looks like you to me.” Mr. Rice’s lawyer had no comment.
Once hired, César did more at IFCO than drive a forklift. At Mr. Belvin’s request and with assistance from ICE, the complaints say, he helped recruit more illegal workers. He got phony documents for five other new hires and he phoned an IFCO manager in Houston to ask about jobs here for two Mexicans who had crossed the border.
In July, César was promoted to foreman.
Already well along in its work, ICE opened a second line of inquiry into IFCO: It enlisted the Social Security Administration.
When numbers on tax returns don’t match numbers on its books, Social Security tells employers by letter. A “no-match” can have many explanations, but to ICE it’s a red flag of illegal immigration. Yet privacy law bans Social Security from showing ICE its data. Companies do volunteer for audits in return for shelter from raids, and they can check Social Security numbers of new hires themselves. IFCO didn’t volunteer for such programs. But the sanctity of its records vanished the moment its recyclers were seen tearing up W-2s.
Destroying the forms was a violation that let Social Security in on the case. Through a subpoena of IFCO’s payroll processor, says one official, its inspectors learned that 53% of IFCO’s workers in 2005 had dud Social Security numbers. What’s more, the complaints say, they discovered that in 2004 and 2005 IFCO received 13 letters in Houston informing it that “more than 1,000 social-security numbers” at “several” of its sites “did not match the records of the SSA.”
IFCO didn’t follow up on the letters. People familiar with IFCO’s position say an employee set the letters aside unopened, failed to tell anybody about them, and then left the company for good.

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