A pallet management services company has agreed to pay $20.7 million to settle allegations that the company hired more than 1,000 individuals who were unauthorized to work in the United States.

IFCO, which is based in Houston, agreed to pay $20.7 million dollars in civil forfeitures and penalties over four years. The settlement amount includes $2.6 million dollars in back pay and penalties relating to IFCO's alleged overtime violations with respect to 1,700 of its pallet workers. IFCO is also paying $18.1 million in civil forfeitures.

The government began its investigation of IFCO following a tip that claimed illegal alien laborers at the Albany IFCO plant were observed ripping up their W-2 forms. On April 19, 2006, ICE agents, in concert with other federal and state authorities, conducted a work site enforcement action at over 40 IFCO pallet plants in 26 states, which resulted in the detention of 1,182 individuals who the government says were illegal aliens working at those plants.

The United States Attorney's Office has prosecuted several IFCO managers and employees for criminal offenses associated with the employment of illegal alien workers at IFCO pallet plants. To date, nine IFCO managers and employees have entered pleas of guilty. Four managers are currently pending trial on a felony indictment. The IFCO settlement agreement covers only the liability of the corporation and does not address any pending or possible future criminal charges against individual employees.

The government alleges that several IFCO managers and employees harbored and transported illegal aliens, and encouraged and induced them to remain in the United States as pallet workers. The government claims that as many as 6,000 illegal aliens could have worked for the company during the time period from 2003 through April 2006.

Under the settlement agreement, the company agreed to cooperate fully and actively with the U.S. Attorney's Office and the government entities involved in the investigation. The agreement further includes a precedent-setting, compliance and reporting program, designed to prevent the employment of illegal aliens at IFCO plants in the future. The company will take remedial actions in hiring, such as use of the government's "E-Verify" screening program for all new hires, and will verify the social security numbers of all IFCO employees through the goverment.