One of Mississippi’s most successful and largest private employers pled guilty in federal court last week to knowingly violating federal criminal conspiracy laws in its employment of illegal aliens at the company’s electrical transformer plant in Laurel, MS following an investigation by ICE and Homeland Security Investigations (HSI).  The company agreed to pay a $2.5 million fine, which is larger than normal for such a conviction, the U.S. Justice Department said in a news release.

Immigration agents detained more than 600 illegal immigrants at Howard Industries’ electrical transformer plant during a massive raid on Aug. 25, 2008. Those detained in the raid came from countries including Brazil, El Salvador, Germany, Guatemala, Honduras, Mexico, Panama and Peru, and most of them were deported, though a few were convicted on identity theft charges for using fraudulent documents and providing fake papers to other workers.

The company said in a statement that it was pleased to resolve the investigation “based on the actions of its former human resources manager Jose Humberto Gonzalez.”  Gonzalez is the only company executive who has been charged in the case. He pled guilty in December 2009 to conspiracy and admitted that he hired hundreds of people who he knew were in the country illegally.  

The company had repeatedly denied allegations that it had knowingly hired individuals without work authorization, putting all of the blame on its HR manager, Jose Humberto Gonzalez, who was charged in a 25-count indictment with conspiracy and employee verification fraud.   He faces a maximum of 5 years of imprisonment on the conspiracy charge and on each employee verification fraud count. He also faces a minimum of 2 years imprisonment for the aggravated identity theft charge and possible fines up to $250,000.

Howard Industries was charged with knowingly and willfully conspiring to encourage and induce undocumented workers to reside in the US, and knowingly conspiring to conceal, harbor and shield from detection such workers.  As it turned out, Howard Industries waived indictment and agreed to plead guilty to the one-count felony of  conspiracy to commit offense or to defraud the United States which calls for a term of not less than one and not more than 5 years of probation and a fine of up to $500,000. However, this fine was substantially enhanced to $2.5 million due to the nature of the crime (harboring), the number of workers involved (100 or more), and the size of the company.

Apparently Gonzalez would routinely hire unauthorized workers who presented false identity documents, including green-cards and Social Security cards, and then would complete the I-9 with the fake information.  Gonzalez was also accused of submitting SSNs to the Social Security Administration to verify their numbers and then disregarding the results if they came back as invalid.

E-Verify doesn’t protect against identify fraud: Howard Industries was using E-Verify and ran every applicant through the system, but E-Verify doesn’t detect identify fraud and shouldn’t be used as a substitute for I-9 compliance.  The case at hand teaches a lesson about the E-Verify program, in that using E-Verify doesn’t insulate an employer against penalties and doesn’t provide a safe harbor against worksite enforcement.

So what’s an employer to do?

If you are contemplating ‘going electronic’, whether that be an electronic I-9 system or enrolling in the E-Verify program, it is imperative that you find out what condition your I-9’s are in.  This is done by having a qualified immigration attorney that specializes in compliance issues perform either a partial or full audit on your I-9’s so that the reoccurring errors and violations buried in your paperwork can be identified, corrected, and your staff properly trained.  We additionally encourage our clients to work with us in establishing policies and guidelines as to how they want to process and manage the I-9 function at their organization and document this, and make sure that everyone involved with the process is trained and fully understands your internal policies.

We link to the ICE press release

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