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Crackdown on illegals

38 Commerce City workers arrested, part of national investigation

Laura Frank, Rocky Mountain News

Published April 21, 2006 at midnight

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The multistate investigation that led to the arrest of seven current and former IFCO Systems managers and more than 1,110 of its workers, including 38 locally, signals a new crackdown on illegal immigrants and their employers, a top federal official says.

In the past, immigration officials were more likely to issue civil fines than seek criminal charges in such cases.

But the investigation of IFCO Systems, the largest wood pallet maker in the country, shows that the "status quo has changed," Homeland Security Secretary Michael Chertoff said in a statement.

"These enforcement actions demonstrate that this department has no patience for employers who tolerate or perpetuate a shadow economy," he said.

"We intend to find employers who knowingly or recklessly hire unauthorized workers and we will use every authority within our power to shut down businesses that exploit an illegal workforce to turn a profit."

About time, said U.S. Rep. Tom Tancredo, the Colorado Republican who is a leading proponent of tougher immigration laws.

"After years of calls, letters and protests, DHS leadership finally might be getting the message: enforce the law," Tancredo said in a statement.

"Today's law enforcement action is a cautious first step, but if this approach continues, the federal government might be on its way to actually getting at the heart of the illegal immigration problem for the first time in memory."

Immigration officials detained 38 people Wednesday at the IFCO Systems site in Commerce City. The workers, who were charged with immigration violations, were among 1,187 detained at 40 sites owned by IFCO.

Agents from U.S. Immigration and Customs Enforcement also arrested seven current and former managers in other states on criminal charges. They are accused of conspiring to "transport, harbor, and encourage and induce" illegal immigrants to live in the U.S. for their own commercial advantage and private financial gain, according to a statement.

If convicted, the managers face up to 10 years in prison and a fine up to $250,000 for each illegal immigrant involved.

Two other lower-level employees were arrested on criminal charges relating to fake documents.

In a statement Wednesday, the company pledged to cooperate with the investigation and comply with state and federal requirements.

A woman at the Commerce City office of IFCO said officials had no comment.

The company was still operating Thursday with workers moving pallets behind its warehouse.

The IFCO investigation began after officials got a tip that workers in Guilderland, N.Y., were seen ripping up their W-2 forms because they did not intend to file tax returns, Chertoff said.

Last year, federal officials checked a sample of the 5,800 U.S. IFCO workers and found more than half were using invalid Social Security numbers, according to immigration officials. The Social Security Administration sent the company 13 written notifications of the problems, according to immigration officials, but no action was taken.

Tancredo said Congress needs to make workplace immigration enforcement more streamlined.

"Today's enforcement action underscores the need for an employer verification system so that we can hold employers accountable without months-long stakeouts," he said.

Homeland Security officials have asked for more money for its document verification system in the 2007 budget.

Tancredo said the IFCO investigation - which alleges that the company transported illegal immigrants and paid their rent, then deducted money from their paychecks for these expenses - showed "criminal businesses are dangerous to illegal aliens, they're dangerous to their communities, and they're dangerous to our economy."

"We're looking at them in the same way we look at criminal organizations," Chertoff said at a Washington news conference.

About IFCO in Commerce City

IFCO acquired the Commerce City plant with its August 2000 purchase of PalWest. Neither the purchase price nor the owner of PalWest at the time were disclosed in a news release announcing the deal. Some facts about IFCO, according to news releases:

• The company is the nation's largest pallet recycler, processing more than 60 million pallets each year.

• IFCO operates a pool of more than 75 million reusable plastic containers, which are used to transport groceries from producers to stores.

• The Commerce City facility is one of 53 of IFCO's plants in the U.S.

• IFCO is based in Amsterdam with operational headquarters in Houston and Munich. IFCO is traded on the Frankfurt Stock Exchange.

• IFCO reported worldwide sales of $576 million in 2005, a 22 percent gain from the year earlier

• IFCO reported net income of $40.9 million in 2005, a 27 percent increase from 2004

• The company last year had a 20.2 percent profit margin

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