2007-03-05 Agency targets company bosses (By Barry Newman)

Immigration case takes new angle

Early in April 2005, a man whose friends knew him as Cesar 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, Cesar let the boss know he was in the country illegally, but would be trying to buy some fake "papers."

"That will work," said Robert Belvin, 42, the IFCO site manager.

What Belvin didn't know was that Cesar was an undercover informant working for federal immigration enforcers. Or that he was wearing a wire.

The conversation - and many others Cesar 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 Cesar went to work, agents from the Immigration and Customs Enforcement, or ICE, 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.

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 a low of 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 worldwide 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 who were 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."

The IFCO evidence, she and other lawyers acknowledge, appears to pull back the curtain of "plausible deniability" that effectively allows 6 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.

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Of the workers rounded up in April, many have left the country or slipped underground. A man who is called Reynaldo, a Honduran who drove a forklift for IFCO here, has stayed on in a frame house nearby.

The arrest of his managers at IFCO was news to him.

"That really touches me," the 24-year-old said, sitting beside a messy bunk bed one evening as other men came and went.

"These are people who offered us opportunities."

"They haven't committed a crime," said a Nicaraguan named Mario who sat next to him. Mario is 39 and fixed pallets at IFCO for 30 cents apiece. "At least," he added, "it's not a crime to me.