ICE I-9 Worksite Enforcement Aggressively Targets Employers with Civil and Criminal Penalties

The Immigration Reform and Control Act (IRCA) has been law since 1986. It has two main requirements of employers:
(1) To hire only persons authorized to work in the United States, and
(2) To not discriminate on the basis of citizenship status or national origin.

IRCA was enacted to control unauthorized immigration to the United States. Under IRCA, employers may be sanctioned by the Department of Homeland Security's (DHS) two primary immigration related agencies the United States Citizen and Immigration Service (USCIS) and Immigration and Custom Enforcement (ICE) for knowingly hiring non-U.S. citizens who are not authorized to work in the United States.

IRCA requires U.S. employers verify the employment eligibility status of newly-hired employees. IRCA makes it unlawful for employers to knowingly hire or continue to employ unauthorized workers. In response to the law, the legacy Immigration and Naturalization Service (INS), which is now the United States Citizens and Immigration Service (USCIS) and an integrated component of the Department of Homeland Security (DHS), created Form I-9 and mandated its accurate and timely completion by all U.S. employers and their employees.

Employers are on the frontline of the government's efforts to stop illegal immigration. Recently provided with increased funding, ICE is using its authority under IRCA to target employers and employees suspected of engaging in unauthorized employment.

Employers carry the burden because the reality seems to be that most illegal workers have no problem obtaining falsified documents designed to satisfy the I-9 requirement and some even avoid detection through E-Verify (formerly the Basic Pilot Program).

New ICE I-9 Enforcement Strategy
ICE's new immigration and Form I-9 enforcement strategies include strong worksite enforcement to deter illegal employment, and detection and apprehension of individuals or organizations that engage in identity theft and document counterfeiting operations. This vigorous enforcement program has resulted in a dramatic increase in worksite raids, arrests, and federal charges related to the illegal employment of unauthorized workers.

DHS' and ICE's new I-9 enforcement strategy clearly and emphatically targets employers with all the resources the federal government can muster:

• "ICE is about to try a new approach; not just targeting the workers, but also the people who employ them in the first place. That's a challenge. There are millions of employers in the United States'"

• "We just can't focus on the very biggest employers--we have to do this at all levels."

-John Morton, Department of Homeland Security Assistant Secretary for Immigration and Customs Enforcement (Director of ICE)

• "....individuals who have profited from hiring illegal aliens -- and often exploiting them -- we're going after their houses, their Mercedes and any money that they have, as well."

• "When we find those employers who don't want to do the right thing, we're going to target our criminal efforts and bring all the criminal statutes that we can to bear against them..."

• "We found that the fines were not an effective deterrent, employers treated them as part of the cost of doing business."

• "Just a small fine or a slap on the wrist is not a deterrent...we see more robust criminal cases...the prospect of 10 years in prison carries much sharper teeth than just a small fine."

• "Worksite enforcement actions target a key component of the illicit support structure that enables illegal immigration to flourish. No employer, regardless of industry or location is immune from complying with the nation's laws. ICE and our law enforcement partners will continue to bring all of our authorities to bear in this fight using criminal charges, asset seizures, administrative arrests and deportations."

-Julie Myers, prior Department of Homeland Security Assistant Secretary for Immigration and Customs Enforcement (Director of ICE)

• "We want to send the message that your cost of business just went up because you risk your livelihood, your corporate reputation and your personal freedom."

-Brian M. Moskowitz, ICE special agent in charge for Ohio and Michigan

To avoid Forms I-9 liabilities it is imperative that every employer becomes pro-active and develops a comprehensive I-9 policy. Click here to learn more about implementing employer I-9 best practices and company I-9 policies, procedures and training procedures.

ICE's IMAGE Program Assists Employers
ICE unveiled the ICE Mutual Agreement between Government and Employers (IMAGE) program in July 2006. ICE recognizes that the majority of employers want to comply with the immigration laws. ICE also recognizes that employers are confronted with illegal aliens attempting to secure jobs through fraudulent means, including the use of counterfeit documents and stolen identities.

IMAGE fosters partnerships between ICE and businesses, promoting the use of screening tools, best practices, and continuing education to determine employment eligibility based on immigration status. Employers seeking to participate in IMAGE must first agree to:

• Submit to an I-9 audit by ICE, and
• To ensure the accuracy of their wage reporting, verify the Social Security numbers of their existing labor forces, utilizing the Social Security Number Verification System (SSNVS).

The program begins with a self-assessment of hiring practices and helps uncover vulnerabilities to illegal activity that are related to immigration status. Technical tools to screen Social Security numbers and other information on job applicants and existing employees are integrated with best practices to lead to a high level of assurance that all of a participating business's employees are legally eligible for employment.

Many immigration attorneys do not recommend clients participate in IMAGE because of the employer requirements for:
• Signing the Mutual Agreement (Memorandum of Understanding or MUA) with ICE;
• Submitting to an ICE I-9 audit;
• Verify existing workforce through SSNVS (Social Security Number Verification Service);
• Using E-Verify; and,
• Allowing ICE on premises to review documentation.
Neither IMAGE nor E-Verify provide a "firewall" to ICE subsequently using employer data in an enforcement action.

Third Party Complaints to ICE
A person or entity having knowledge of a violation or potential violation of employer sanctions provisions may submit a signed written complaint to the ICE office with jurisdiction over the business or residence of the potential violator, whether an employer, employee, or agent. The complaint must include the names and addresses of both the complainant and the violator, and detailed factual allegations, including date, time and place of the potential violation, and the specific conduct alleged to be a violation of employer sanctions. By regulation, the ICE will only investigate third party complaints that have "a reasonable probability of validity."

ICE Procedures
Regardless of whether the ICE investigation is developed internally or through a third party complaint, if ICE believes that violations have occurred, ICE may issue:

• A Warning Notice,
• A Technical or Procedural Failures Letter notifying the employer of technical or procedural failures in need of correction; or,
• A Notice of Intent to Fine (NIF).

In cases where a NIF is issued, employers may request a hearing within 30 days of service of the NIF to contest the NIF before an Administrative Law Judge of the Office of the Chief Administrative Hearing Officer (OCAHO), Executive Office for Immigration Review, U.S. Department of Justice. Hearing requests must be in writing and filed with the ICE office designated in the NIF. If a hearing is requested, ICE will file a complaint with OCAHO to begin the administrative hearing process which may end in settlement, dismissal, or a Final Order for civil money penalties.

If a hearing is not requested within the 30-day period, ICE will issue a Final Order to cease and desist and to pay a civil money penalty. Once a Final Order is issued, the penalty is unappealable.

ICE Criminal Prosecution
Immigration and Customs Enforcement (ICE), has significantly ratcheted up its efforts to enforce IRCA employment eligibility verification (EEV) and I-9 violations using a number of criminal tools, including bringing "alien harboring", "aiding and abetting" and "conspiracy" felony charges against companies and individuals employing unauthorized aliens.

(1) "Encouraging" and "Harboring" an Illegal Alien
(a) "Encouraging an alien to come to or reside in the U.S."--Felony
It is a felony to encourage or induce an alien to come to or reside in the U.S. knowing or recklessly disregarding the fact that the alien's entry or residence is in violation of the law. This crime applies to any person, rather than just employers of illegal aliens. Courts have ruled that "encouraging" includes counseling illegal aliens to continue working in the U.S. or assisting them to complete applications with false statements or obvious "errors". The fact that the alien is a refugee fleeing persecution is not a defense to this felony, since U.S. law and the UN Protocol on Refugees both require that a refugee must report to immigration authorities "without delay" upon entry to the U.S.

(b) "Harboring" an illegal, including out of status, alien--Felony
It is a violation of law for any person to conceal, harbor, or shield from detection in any place, including any building or means of transportation, any alien who is in the United States in violation of law. Harboring means any conduct that tends to substantially facilitate an alien to remain in the U.S. illegally. The sheltering need not be clandestine, and harboring covers aliens arrested outdoors, as well as in a building. This provision includes harboring an alien who entered the U.S. legally, but has since lost his legal status (including out of status and visa overstay).

An employer can be convicted of the felony of harboring illegal aliens who are its employees if it takes actions in reckless disregard of their illegal status, such as ordering them to obtain false documents, altering records, obstructing ICE inspections, or taking other actions that facilitate the alien's illegal employment. Form I-9 is an official record that may be altered, as well as a document that may not be falsified. . Any person who within any 12-month period hires ten or more individuals with actual knowledge that they illegal aliens or unauthorized workers is guilty of felony harboring.

Employer liability is through actual or constructive knowledge and prosecutions are be supported with circumstantial evidence of constructive knowledge, including constructive knowledge of independent and subcontractor employee I-9s and authorized employment status. A worker may be deemed a company "employee" through a subcontractor relationship.

"Harboring" conduct may include, for example, providing transportation to the job site, assitance with finding housing, and paying the employee off the books. The government has argued in "harboring" prosecutions that the employer's constructive knowledge is established because the employer would not have done certain acts or omitted certain acts unless the employer had some concern that the employee did not have legal status.

The penalty for felony harboring is a fine and imprisonment for up to five years. The penalty for felony alien smuggling is a fine and up to ten years imprisonment. Where the crime causes serious bodily injury or places the life of any person in jeopardy, the penalty is a fine and up to 20 years imprisonment. If the criminal smuggling or harboring results in the death "of any person," the penalty can include life imprisonment.

(c) "Conspiracy" to Harbor or "Aid and Abet" Harboring--Felony
Convictions for aiding, abetting, or conspiracy to commit alien smuggling or harboring, carry the same penalties. Courts can impose consecutive prison sentences for each alien smuggled or harbored. A court may order a convicted smuggler to pay restitution if the alien smuggled qualifies as a "victim" under the Victim and Witness Protection Act.

(d) Penalties
The maximum statutory penalty for alien harboring conspiracy is ten years imprisonment, a fine of $250,000, three years supervised release term, and a $100 mandatory special assessment

The maximum statutory penalty for alien harboring is five years imprisonment, a fine of $250,000, three years supervised release, and a $100 mandatory special assessment.

These criminal penalties are discussed more fully in the Criminal Penalties section of this website.

(2) "Money Laundering" and Asset Forfeitures
Most employers are not aware that the crime of money laundering is now in the ICE arsenal for prosecuting employment eligibility verification (EEV) I-9 violations.

Recently, the government began charging employers who knowingly hired illegal aliens with conspiracy to commit money laundering, claiming businesses are using money gained from knowingly hiring illegal aliens to promote a criminal enterprise that continues to illegally hire undocumented aliens. The government claims businesses conceal their illegal profits by not reporting that their profits are derived from the illegal hiring of undocumented aliens. Thus, the government can obtain forfeitures of any assets it establishes are the fruits of hiring illegal aliens.

(a) Asset Forfeiture
Asset forfeiture may include the employer's profits related to employing the "illegal" employee. For example, the government could argue that since, for example 30% of the workforce was "illegal", 30% of the company's profits should be forfeited. Another government theory for conviction is "saved wages" or what the ocmpany would have paid for authorized employees based on market wages.

(b) Employer's "Saved Wages" Forfeiture
If the "asset forfeiture" does not yield sufficient proceeds, where for example the employer has a large workforce and the government identifies only a few hundred illegal employees, then the "saved wages" basis for recovery is argued.

(c) Money Laundering Penalties
The maximum statutory penalty for the money laundering conspiracy is 20 years imprisonment, a fine of $500,000 (or twice the value of the funds involved, whichever is greater), five years supervised release term, and a $100 mandatory special assessment Note: Any sentence following conviction would be imposed by the Court after consideration of the U.S. Sentencing Guidelines and the federal statute governing the imposition of a sentence, 18 U.S.C. §3553.

Criminal Charges Enhance Employer Settlements vs. Going to Court
Individual criminal liability and the possibility of high fines and a susbtantial term of imprisonment is a rather large stick with which the government can pressure employers to settle on the more palatable "carrot" of a plea agreement, rather than the risk and expense of a full blown court trial.

In reality, most employers will allow the government to extract a settlement, rather than risk the expense and uncertain results of a jury trial. Intelligent employers may consider that a jury trial in a community where there is substantial public "pushback" relating to illegal immigration, is not a promising gamble. Most all employers, except all b ut the largest corporations, cannot afford a full blown "ICE storm". The prospect of a jury trial, asset forfeiture, money fines, and individual imprisonment is generally unfavorable for owners, executives and company managers.

Every employer who has been involved in litigation appreciates the lost management time and energy that is invloved with litigation. An unlimited number of phone calls and meetings with attorneys and discussions with fellow employees is simply a waste for employers who need to be managing their business. A government prosecution is "litigation on steriods". The government has investigative and prosecutorial assets available to it that are both not available in civil lawsuits, as well as, generally, substantially beyond the budget of a private firm.

The Stucco Design case is illustrative of the new ICE prosecution in employment eligibility I-9 cases. The employer was arrested on charges of:

• Mmoney laundering;
• Harboring;
• Transporting illegal aliens; and
• Making false statements in connection with an illegal employment scheme.

If convicted the owner can face up to forty years in prison and the forfeiture of $1.4 million.

Who is at Risk?
Certainly the employer corporation and its officers are at risk for criminal liability. But the managers and supervisors on the lower rungs of the ladder are always at risk in prosecutions. Plant managers, site managers, supervisors, human resources personnel and intermediate employees can be charged, then "squeezed", as the government will seek to "turn" lower rung managers and supervisors in return for testimony damaging to the "higher ups".

Additional Government Settlement Extraction Considerations
ICE can be expected to be heavy-handed in trying to extract a settlement from an employer. Certainly, the prospect of going to trial with ICE is daunting enough. But the ICE may be just the tip of the iceberg.

Once the employer has been on the receiving end of any I-9 EEV private or government enforcement the Pandora's box of other EEV consequences is wide open:

• ICE enforcement action;
• A settlement with ICE;
• A court trial with ICE;
• A RICO lawsuit; or,
• A Sarbanes Oxley (SOX) action

Once an I-9 violation surfaces publicly the target is on the employer's back!

(1) RICO lawsuits, Treble Damages and Attorey's Fees
Civil RICO actions with treble damages and attorney's fees, contractor debarment (from future contracts) and Sarbanes Oxley issues should give an employer nightmares In some cases a settlement may avoid these scenarios.

However, even a settlement may open the "Pandora's box" of competitor RICO lawsuits.

(2) Sarbanes Oxley (SOX)
The Sarbanes-Oxley Act of 2002 ("SOX") is generally thought to apply only to large, publicly traded companies. Although that perception is somewhat accurate, SOX impacts private companies and non-profit organizations in significant ways. SOX has provisions that apply to all companies, including whistle blower protection and records retention. Sarbanes Oxley penalties are discussed more fully in the Sarbanes Oxley section of this website.

SOX protects whistle blowers from retaliation by public and private companies. Retaliation against a whistle blower is a criminal violation.  The crime involves: "knowingly, with the intent to retaliate, takes any action harmful to any person, including interference with the lawful employment or livelihood of any person, or providing to a law enforcement officer any truthful information relating to the commission or possible commission of any Federal offense, shall be fined under this title or imprisoned for not more than 10 years, or both." 

SOX states that any violation of SOX shall be treated for all purposes in the same manner as a violation of the Securities Exchange Act of 1934 ("Exchange"Act), and any person violating SOX is subject to the same penalties as a violation of that Act or its rules and regulations. 

Therefore, any employer violating the whistle blower provisions of SOX should also be concerned about the potential civil fines and penalties under the Exchange Act, which can be as high as $25 million against corporations and up to $5 million against individuals. 

SOX subjects to criminal penalties anyone who corruptly:

• Alters, destroys, mutilates, or conceals a record, document, or other object, or attempts to do so, with the intent to impair the object's integrity or availability for use in an official proceeding; or
• Otherwise obstructs, influences, or impedes any official proceeding, or attempts to do so, shall be fined under this title or imprisoned not more than 20 years, or both.

The SOX statute applies equally to public companies, privately held companies and non-profits. The law does not require a perpetrator to have criminal intent in persuading a third party to destroy, alter or conceal documents, the new law applies directly to a wider range of conduct, carries a maximum imprisonment sentence of 20 years.