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It’s been a busy week in the press room for Homeland Security Investigations (HSI), as ICE continues to aggressively pursue employers (regardless of industry) that violate immigration laws or engage in abuse or exploitation of workers. These investigations occasionally involve violations of criminal statutes which can lead to steep fines and even jail-time for owners or managers who engage in fraudulent or deceptive activities. As discussed earlier this week, ICE investigations often begin with an administrative Form I-9 audit which is designed not only to identify substantive or technical violations (leading to the dreaded Notice of Intent to Fine) but also to build a case for eventual criminal prosecution in situations involving egregious behavior. Today, we look at three recently announced investigations involving (1) several donut stores, (2) a deli operated by a former FBI agent (of all people), and (3) a construction subcontractor working on a school project (which may or may not have involved drywall…author’s prerogative for a catchy title).

Time to make the donuts…and call your lawyer

Our first story involves George Valvanis, a manager of several Dunkin Donuts stores, located in the Portland, Maine area. Earlier this week, Valvanis pleaded guilty to one count of engaging in a pattern or practice of recruiting or hiring undocumented workers, and to one count of using a false attestation on one of his employee’s I-9 forms. How did the prosecution arrive at these charges? First, according to the court records, the manager knowingly employed 18 undocumented workers in his stores from 2001 to 2009 (most definitely a pattern or practice, especially given the time frame). For this violation, the manager could face up to 6 months of jail time and $3,000 per employee.

Second, the prosecution alleged that the manager signed and approved an I-9 form for a US citizen (as indicated in section 1), while knowing that in fact the employee was a Brazilian national who had overstayed his visa. The penalty for a false attestation is even greater, as the manager can face up to 5 years in jail and $250,000.

Sentencing for the case is currently scheduled for April 2011.

Deli Owner Serves up $18,000 fine and federal embarrassment

Our second story concerns a former Dallas FBI special agent who admitted to employing undocumented workers in her deli franchise. According to court documents, the ex-agent operated a Schlotzky’s Deli from at least August 1997 until December 2008, during which time she hired and employed at least 6 individuals knowing that they were not authorized for work in the U.S. In July of this year, the ex-agent pleaded guilty to the misdemeanor offense of unlawfully employing aliens. On Wednesday, she was sentenced to two years probation and an $18,000 fine.

What’s interesting about this case is that involved a former government agent, which according to protocol, dragged the FBI and the Department of Justice into the investigation and the resulting press. We can only imagine how thrilled the FBI was to learn that their ex-agent was going to be on the front page of ICE’s website. Well, at least we know that ordinary civilians are not the only ones ensnared in ICE’s worksite enforcement net!

Labor Disputes and I-9 Problems Go Hand-in-Hand

Our last story involves three individuals from Daniel Builders, a construction company that was awarded a $2.7 million contract at Southside Elementary School in Florida. In February 2009, HSI special agents and the Miami-Dade County Public Schools Office of Inspector General initiated an investigation after receiving allegations that many employees were being paid substandard wages and that no social security and income taxes were deducted from their paychecks. The investigation eventually led to a Form I-9 Audit in October which revealed that the three defendants used their corporation, Daniel Builders, to hire and underpay undocumented workers to increase their profit margin. Thereafter, they concocted a scheme of using nominee corporations that acted as labor providers and payroll administrators, in order to insulate the company from responsibility for payroll tax and social security withholdings.

The President was sentenced to 21 months in prison followed by three years of supervised release. His wife was sentenced to two years of supervised release, including eight months of home confinement. Their son was sentenced to five years’ probation. All three were ordered to pay restitution in the amount of $76,317 and a civil fine in the amount of $121,086 for I-9 violations (the icing on the cake).

That’s all for today…but stay tuned for additional chapters in the evolving story of I-9 Enforcement.

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