Recycling Company To Pay $21M In Immigration Case

IFCO Systems North America Settles After Crackdown On Hiring Illegal Immigrants


A wood pallet recycling company caught in a national crackdown on hiring illegal immigrants has agreed to pay almost $21 million to settle charges lodged by federal prosecutors in upstate New York.

Several senior managers of IFCO Systems North America had previously pleaded guilty to misdemeanor and felony immigration charges since authorities conducted a 26-state roundup of nearly 1,200 foreign workers two years ago.

Now prosecutors say they'll drop charges against the company as part of the settlement announced Friday, which includes IFCO taking responsibility for the illegal hiring.

"The agreement severely punishes IFCO for its serious immigration and employment violations, but it also allows the corporation to continue its operations, so that its lawful employees and innocent shareholders do not suffer the consequences of a business failure in this difficult economy," said Andrew Baxter, acting U.S. Attorney for the Northern District of New York.

The government's settlement with IFCO is the largest ever with a corporation charged with employing illegal immigrants, almost doubling the $11 million Wal-Mart agreed to pay in 2005 to settle allegations it used hundreds of illegal immigrants to clean its stores, said John Torres, acting Assistant Secretary of Homeland Security for Immigrations and Customs Enforcement.

The Houston-based subsidiary of the Dutch company IFCO Systems describes itself as the leading company in America servicing wooden pallets used in shipping and storage. Executives did not immediately return a call for comment on the settlement.

The investigation began in February 2005 after a tipster called to report that illegal alien laborers at a plant in Guilderland, just outside of Albany, were tearing up their W-2 tax forms, said Torres.

Coordinated raids at 40 IFCO plants a little more than a year later netted 1,182 illegal workers, most of them Mexican, Torres said. Investigators believe that as many as 6,000 illegal immigrants worked at IFCO plants between 2003 and 2006, though not all at the same time.

Under the settlement, IFCO agreed to make the payments in installments through 2012. It also agreed to cooperate with the government's continuing investigation and try to prevent hiring illegal workers at its plants in the future by verifying all employee Social Security numbers.

If IFCO meets all the terms and conditions by 2012, the government has agreed not to pursue criminal charges against the company related to the conduct of its employees before April 2006.

The settlement doesn't close the case, however. Nine IFCO managers have already pleaded guilty to felony and misdemeanor criminal charges related to transporting and employing illegal aliens. Four more still face felony charges and might stand trial, prosecutors said.