Thread: How Painful Can It Get? Recent Penalties for Noncompliance with Immigration Law

How Painful Can It Get? Recent Penalties for Noncompliance with Immigration Law

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March 19, 2014
Christine Mehfoud
I-9 Fines

[Editor’s Note: Today’s blog is courtesy of Christine D. Mehfoud, a Director with Spotts Fain, PC in Richmond, VA.]

Compliance-minded companies always want to know, “What’s the risk of non-compliance?” Or, put another way, “how much will it hurt if we don’t get it right?” For those companies still wondering whether spending a little now to implement a solid immigration compliance program is a sound investment, some of the recent immigration-related penalties provide compelling reasons to invest in training and compliance.

Remember − all employers have immigration-related compliance obligations regardless of whether they employ any foreign nationals. Some of the companies suffering significant penalties identified below never even had any unauthorized workers in their workforce, but merely fell short on their obligation to verify employment eligibility (the Form I-9 process) or discriminated against certain individuals during the Form I-9 process.

Penalties imposed in any given case are always fact-dependent, and of course, the employer’s response to the investigation can significantly impact the outcome of any investigation. With that in mind, taking a look at the recent penalties imposed provides a good perspective of the risk.

Generally, immigration-related violations risk the following potential penalties:

• Prison Time
  
  • from up to six months for knowingly hiring an illegal worker to 10 years for harboring
  
  
• Civil Fines
  
  • up to $16,000 per worker
  
  
• Asset Forfeiture
• Debarment
• Loss of Business License
• Lost Productivity
  
  • For example, after a Form I-9 inspection in 2009, American Apparel lost 40% of its workforce and suffered significant financial losses that it attributed to lost productivity, causing its stock to drop 41% after reporting losses in the second quarter of 2010.
  
  
• Attorneys’ Fees
• Negative Publicity
• And often, other crimes such as tax fraud, social security fraud, money laundering, identity theft, bank fraud and false statements are uncovered during what begins as an immigration-related investigation.

To put these penalties in real terms, below are examples from recent investigations:

Monetary Penalties	Prison Time	Charge	Company	Date
$34 Million		Visa fraud (misuse of B-1 visa)	Infosys	October 2013
$275,000		Discrimination in employment eligibility verification process	Macy’s	June 2013
$400,000		1 count of knowingly accepting a false document	McDonald’s(Wichita-based franchisee)	December 2012
$2 Million		Failing to comply with employment eligibility verification requirements (Form I-9 Process)Failing to act on SSA No-Match Letters	ABC Professional Services, Inc.	July 2012
$625,000		Failing to comply with employment eligibility verification requirements (Form I-9 Process)	Infinite Visions	July 2012
Over $2.7 Million	3 years probation (owners)5 years probation (company)	Knowingly hiring and aiding and abetting (owner)Harboring (company)	Aguila Farms	November 2011
Over $3.5 Million	15 years (owner)5 years probation (company)	Conspiracy to smuggle, transport and/or harbor, money laundering and tax fraud (owner) Conspiracy to smuggle and harbor (company)	YCL(The Gateway Hotel)	October 2011
$290,400		Discrimination in employment eligibility verification process	Farmland Foods	August 2011
$1 Million		Failing to comply with employment eligibility verification requirements (non-compliant electronic Form I-9 system)(no unauthorized workers and employer had used E-Verify for years)	Abercrombie & Fitch	September 2010
$4.5 Million		Knowingly hiring and continuing to employ	Pilgrim’s Pride	December 2009
$26 Million	27 years (former CEO)23 months (supervisor)1 year + 2 years supervised release (manager)2 years probation (manager)	Aiding and abetting in harboring (supervisor)Bank fraud, false statements, money laundering (company)	Agriprocessors	June 2010 and March 2009
Over $20 Million	16 managers and executives convicted and fined	Knowingly hiring and continuing to employ; Overtime violations;Conspiring to harbor illegal aliens (managers)	IFCO Systems	December 2008

- See more at: http://www.lawlogix.com/blog/how-pai....RkbOn8lw.dpuf

Then they let the illegal employees go to look for another company to work for.

I wonder if they just follow the illegals around for the fines or if the illegals call them and say "Hey, I am working over here now" It is after all, about money for the government to spend. Just thinking.