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Managers and Supervisors are Penalized for I-9 Violations, Too

June 28, 2017

Often times we see the hiring process is completed by internally-trained human resource personnel, including mid-level and lower level management. These individuals, while competent, have not received specific training on full compliance with immigration regulations and how to correctly complete a Form I-9. Typically, training is undervalued because managers think owners and CEOs are really the individuals on the hook for noncompliance or that E-Verify and electronic I-9s cover any liability, both of which are false.

 

Criminal indictments for immigration regulation violations do not stop with the business owners; they flow through to anyone involved in the company’s hiring process. As ICE has done in the past, it will continue to target “employers, owners, CEOs, managers, supervisors, and others in the management structure of a company.”

 

The first step, and perhaps the most crucial one, in reducing your liability for violations of immigration regulations is to train your Human Resources managers and everyone in the hiring process who should understand what compliance requires. 

 

We have compiled a small set of cases (below) where company managers and supervisors have gotten in trouble for noncompliance with IRCA hiring regulations, including hiring unauthorized workers.

 

Two Houston Waste Disposal Company Managers Face Serious Jail Time and Fines After Being Convicted of Conspiracy to Harbor Undocumented Workers

 

Size and industry type do not necessarily insulate employers from ICE Worksite Enforcement. On April 8, 2016, a federal jury convicted two waste disposal company managers in Houston, Texas, for employing undocumented workers. Each manager faces a mandatory 24-month prison sentence and could spend more than 10 years behind bars in addition to a possible fine amount of more than $250,000.

 
The company did an internal I-9 audit before being indicted; untrained managers largely ignored the audit recommendations and continued to employ undocumented workers. Internal audits are only helpful if they are conducted along with training for those dealing with I-9s and immigration compliance by those who are experienced in the field. These untrained managers, and likely others, will now be going to jail for not recognizing the importance of immigration compliance and training.

 

Kansas Restaurant Manager Jailed for Employing Undocumented Workers

 

ICE and U.S. Attorneys are actively enforcing immigration compliance requirements against employers in Kansas. Since the 2009 ICE Worksite Enforcement memo was issued, ICE and U.S. Attorneys have been imprisoning and fining Kansas employers for immigration-related violations. In February 2016, a manager of a rural Kansas restaurant, who was under ICE investigation since 2011, was finally sentenced to jail and fined for employing unauthorized workers.

 

The investigation into El Mezcal Mexican Restaurant in Ottawa, Kansas started several years before any charges were brought, but as soon as indictments were handed down, the restaurant was paralyzed and the manager caught off guard. The restaurant was eventually forfeited in 2013 and restaurant manager, Alex Sanchez, was charged with harboring for employing unauthorized workers and fined more than $20,000. Eventually, in February 2016, he was sentenced to six months in federal prison for the harboring charges.

 

ICE is staying true to the promises laid out in its Worksite Enforcement Memo from 2009, which say ICE is on criminal prosecution of employers for employing undocumented workers. The term “employers” means anyone in the hiring chain, not just CEOs and company owners.

 

To avoid any liability, employers should be proactive in handling immigration compliance matters. Any person in your company’s hiring structure or in charge of filling out I-9s should receive training. Many employers believe that if their I-9s are “good”, then they are shielded from liability if ICE comes to audit or investigate the company. Sadly, this is not the case, since many of the employers who have lost their businesses and/or are in jail had I-9s on their workforce, but lacked compliance.

 

Compliance requirements include: using E-Verify, maintaining copies of documents, annual I-9 audits, annual training, and others on the list of ICE Best Employment Practices. LINK

 

ICE Continues To Build Criminal Cases Against Supervisors and Managers, Not Only Business Owners, for Alleged Workplace Immigration Violations: The Story of Danny’s Family Car Wash and the Trickle Down Effect

 

An all-too familiar storyline has recently played out for an Arizona car wash chain owner and its managers.  Daniel “Danny” Hendon, the owner of Danny’s Family Car Wash, and the managers of his stores plead guilty and were sentenced to jail time for charges related to business immigration violations.

 

Moral of the Story: Criminal indictments for immigration regulation violations do not stop with the business owners; they flow through to anyone involved in the company’s hiring process.

 

What Happened? Danny’s Family Car Wash has dealt with Immigration and Customs Enforcement (“ICE”) a few times.  We reported on the company’s most recent encounter with ICE back in 2013, Arizona Car Wash Chain Hit with ICE Raid.   This raid resulted in criminal indictments for the owner and managers.

 

Original ICE Investigation.  ICE originally investigated the company in 2011 with an I-9 audit.  I-9 audits are a tactic used by ICE to determine whether a company is complying with the Immigration Reform and Control Act (“IRCA”) and “serve as an important step in the criminal investigation and prosecution of employers.”  In an April 2009 Worksite Enforcement Memo, ICE stressed its priority of seeking criminal punishments for employers and defined an “employer” as “someone involved in hiring or management of employees…includes owners, CEOs, supervisors, managers…”  April 2009 Worksite Enforcement Memo.

 

Danny’s Family Car Wash Wanted to Comply. Danny’s Family Car Wash’s I-9s for its 1,900 or so employees were seized and ICE found that about half of the employees were unauthorized to work in the United States.  The business was ordered to fire these workers and implement plans, policies, and procedures to correct the company’s immigration violations.  The workers were fired, but, as the ICE News Release reports, the new hires were “ineffective and/or too expensive.”  ICE News Release.

 

Danny’s Family Car Wash Failed to Comply. After a few months without the unauthorized workforce, Mr. Hendon allegedly instructed Danny’s Family Car Wash managers to “bring back” the employees that were fired.  According to the ICE News Release, some of the management “expressed discomfort with this instruction…[but] they were threatened with the loss of their jobs if they refused to comply.”  For the next couple of years, management rehired the unauthorized workers, sometimes assisting the workers in using their relatives’ information to get around the E-Verify part of the process, while Mr. Hendon “turned a blind eye” to what was occurring.

 

Mr. Hendon and his Managers Go to Jail. This brings us to the 2013 raid by ICE on the multi-location company.  The managers of Danny’s Family Car Wash and thirty workers were arrested.  Thirteen of the managers pleaded guilty to partaking in the rehiring scheme and conspiracy to commit identity theft and received sentences ranging from probation to three months in prison.

 

Mr. Hendon, however, was not indicted until months later, when he entered into a plea agreement, and was sentenced to 12 months in prison followed by a year of house arrest.  Additionally, Mr. Hendon had to forfeit, and promise not to regain any ownership in, the businesses he spent decades building.

 

ICE and the DOJ are Taking Employers to School on How Not to Conduct Business

 

In response to the sentencing of Mr. Hendon and his managers, a U.S. Attorney stated, “Today’s sentences should send a strong message to the Arizona business community – companies that knowingly employ unauthorized aliens will be punished severely.”  It is clear the Department of Justice (“DOJ”) is actively prosecuting all individuals involved with immigration violations.

 

Instead of complying with IRCA by implementing immigration plans, policies, and procedures, many employers believe a few myths for peace of mind:

 

  1. “My company is not the type of company ICE is investigating.” Most business owners tend to think since they are not conducting business within the traditional targeted industries, such as the construction or restaurant industries, they are not on ICE’s radar.  This is false.   Ask yourself, “Am I an employer?”  If yes, then you are on the radar.

  2. “ICE has already visited our company; they will not be back.” In fact, the opposite is typically true.  If ICE has visited your company before, they will be back to make sure you are in compliance.  ICE asked Danny’s Family Car Wash to terminate their unauthorized workers and returned to make sure the company kept its promise.  It did not, and now the owner and managers are going to jail.

  3. “My company is too small for ICE to care about who I hire.” This is also false.  ICE targets any and all employers, regardless of size.  In fact, we wrote about ICE investigations that have nearly crippled some small companies due to fines and jail time for the employers.  See Small New York Business Could Have Been Shut Down Due to ICE Form I-9 Penalties.

  4. “I am just the human resources (HR) manager doing what I was told.  I cannot get into trouble.” Middle Management/Supervisors are just as accountable as the owner of the business for immigration violations!  Prosecutors do not discriminate between pay grades when handing out criminal indictments; responsibility is distributed evenly, and sometimes, more heavily onto middle management. 

  5. “Only companies who are hiring a bunch of unauthorized workers will get in trouble.  Not me; I only hire one or two a year.” Hiring one unauthorized worker is a violation of the regulations and is enough to trigger an investigation.  Having just one unauthorized worker might not equal jail time for the employer, but it can mean the company will be fined.

  6. "I did not know they were undocumented…I cannot be held liable.” Most employers say this when confronted with the issue of hiring undocumented workers, and most of the time they are telling the truth.  However, ICE’s response to this is the employer would have known about their undocumented employees had they been following IRCA’s employment verification system.   The employer is held liable regardless of whether or not they actually knew the employee truly lacked work authorization.

 

These debunked myths lead us to one tried and true piece of advice to employers:  Comply before an investigation starts against your company. Implement immigration plans, policies, and procedures to ensure your company is in compliance and that no one will be going to jail.

 

Mid-Level Managers Caught in the Middle of I-9 Worksite Enforcement: Company Forfeits Millions of Dollars in a Non-Prosecution Agreement with the Government While Middle Managers and Supervisors Have to Defend Criminal Charges Against Them On Their Own

 

Grand America Hotels and Resorts operate luxury hotels and resorts in Arizona, California, Idaho, Utah, and Wyoming through its Sinclair Services subsidiary.

 

ICE Investigated Grand Palace for Alleged Immigration Violations
In 2010, US Immigration and Customs Enforcement began investigating the employer for potential Immigration Reform and Control Act violations, including errors on the I-9 Employment Eligibility Form and employing workers who allegedly did not have authorization to work in the United States.   What began as a “simple” I-9 audit has resulted, four years later, in drastically different outcomes for the company and the middle managers responsible for hiring of the workers.  One of the allegations against the company involved bringing terminated unauthorized workers back to work at Grand America as contractors through employment agencies. 


Company Agreed to Forfeit Profits and To Spend $500,000 on Immigration Compliance in Exchange for Non-Prosecution Agreement
The company entered into a non-prosecution agreement with the government.  In exchange for criminal prosecution, the government and Grand America have agreed that Grand America will forfeit approximately 2 million dollars to the Department of Homeland Security and spend  nearly $500,000 to set up its corporate immigration compliance, including:  adopting new policies to comply with immigration law; incorporating immigration law compliance clauses into labor service contracts; re-training human resources employees on I-9 procedures; and agreeing to continue to use the E-Verify employment eligibility verification website.  In addition, Grand America has agreed to retain immigration and corporate counsel to advise the company regarding hiring and immigration procedures.  It is important to understand that only if the company complies with the terms of the non-prosecution agreement, neither the company nor its owners will be criminally indicted.

 

Grand America’s Middle Managers and Supervisors To Be Criminally Indicted

 In contrast, Grand America’s “middle managers” and “low level employees” who were allegedly involved in the hiring and management of the unauthorized workers, have not received protection under the company’s non-prosecution agreement with the government.  Grand America’s mid-level management stands accused of rehiring unauthorized workers to work at Grand America’s hotel through several service contract companies.  This brings flashbacks of the Tyson investigation, where plant managers were criminally indicted for immigration violations and labeled “rogue” employees by the owners of Tyson.  Grand America’s middle management and supervisory employees were fired by Grand America.  They will be criminally prosecuted by the government, and will have to defend themselves without the company’s help.

 

What Should Businesses Do to Avoid Liability for Immigration Violations?

 In this case, the company and its owners avoided criminal prosecution.  This is a much better result for the employer compared to other cases, where business owners and top brass were targeted and criminally prosecuted.  However, they lost a significant amount of money in forfeitures and legal fees.  Employers should not wait until ICE is at their doorsteps to take action.  Immigration compliance is best done before ICE comes with an audit.  According to this ICE-driven non-prosecution agreement, compliance should include:

 

  • adopting policies to comply with immigration law;

  • incorporating immigration law compliance clauses into labor service contracts with employment agencies and other contractors;

  • training human resources employees on I-9 procedures;

  • using E-Verify; and

  • retaining immigration and corporate counsel to advise the company regarding hiring and immigration procedures.

 

Lessons for Middle Management/Supervisors

Middle managers and supervisors should think hard before taking any risks with their responsibilities in the hiring process, such as completing I-9s and dealing with employment agencies.  Middle managers and supervisors need to ask themselves, is the employer following ICE Best Practices?  Do I have enough training and tools to complete the I-9 process and hire service contract workers in compliance with the law?  If the employer is not following ICE Best practices as listed in the Grand America non-prosecution agreement (see above), then the outcome for the middle managers and supervisors may resemble the outcome in the Grand America matter.  The company will just pay fines while the middle managers and supervisors are stuck defending themselves in criminal court.

 

 

 

 

 

 

 

Danielle Atchison, Business Immigration Attorney

MDIVANI CORPORATE IMMIGRATION LAW FIRM

www.uslegalimmigration.com

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