Thread: U.S. Seizes 14 7-Eleven Stores in Immigration Raids

The NY Times article has been updated to the following.
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By MOSI SECRET and WILLIAM K. RASHBAUM
Published: June 17, 2013
The New York Times


Michael Nagle for The New York Times
Homeland Security officers entered a 7-Eleven in Islip Terrace, N.Y., on Monday.

More than a dozen 7-Eleven franchises took in more than $180 million in revenue by running a “modern-day plantation system,” prosecutors in New York charged on Monday, built on the unpaid labor of dozens of illegal immigrants hired using sham Social Security numbers.

Federal authorities seized 14 7-Eleven stores on Long Island and in Virginia, arresting nine owners and managers, and seized property, including five homes. They are investigating 40 other 7-Eleven franchises in New York City and elsewhere in one of the largest criminal immigrant employment investigations ever conducted by the Justice and Homeland Security Departments, officials said.

Through the scheme, the defendants, who as franchisees for the parent company were licensed to use 7-Eleven buildings, trademarks and Slurpee and hot dog machines, recruited more than 50 illegal immigrants and gave them identities stolen from American citizens, including children and dead people.

The employees worked for 100 hours a week but were paid for a fraction of that time, and were forced to live in substandard housing owned by the operators of the convenience stores, the authorities said.

The store managers escaped notice, some for more than a decade, because the national company, 7-Eleven Inc., which has more than 7,600 stores in the United States, did not have safeguards in place to protect its payroll system from employee fraud, the authorities said. For example, two immigrant employees, one in New York and one in Virginia, used the same Social Security number to get paid.

There was “little to no effort to insure the integrity of their payroll system,” said Loretta E. Lynch, the United States attorney in Brooklyn, whose office helped investigate the case.

A spokesman for 7-Eleven Inc., Scott Matter, said in a statement that the company would “take aggressive actions to audit the employment status of all its franchisees’ employees” and was cooperating with federal authorities. The company, based in Dallas, is one of the largest operators of convenience stores in the world.

The raids come as Congress is debating a major overhaul of the immigration system, and Obama administration officials have been called upon to defend their record on enforcement against illegal immigration to convince skeptical lawmakers, many of them Republicans, that the nation is ready to grant legal status to undocumented immigrants.

Under the Obama administration, Immigration and Customs Enforcement has moved away from high-profile workplace raids in which dozens of workers in the country illegally were rounded up for deportation. Instead, agents from ICE, as the agency is known, have relied on audits of employers’ hiring records to detect illegal immigrant workers.

The audits were low profile but often very effective at forcing illegal immigrants to leave their jobs.

Federal immigration officials said the wage theft and other abuses of the workers in the 7-Eleven case were the type of violation they now treat as a priority. Vincent Picard, an ICE spokesman, said the timing of the arrests was not related to the debate in Washington.

The case began two years ago when a 7-Eleven employee approached the New York State Police about not being paid for his work. Another worker later contacted the Suffolk County police.

The investigation led to two families and their associates with roots in Pakistan and the Philippines, who recruited from their own ethnic communities.

Farrukh and Bushra Baig, a married couple and American citizens from Pakistan who live on Long Island, owned and managed 12 stores in New York and Virginia along with Mr. Baig’s brothers, Zahid and Shannawaz, and his associates, Malik Yousaf, Tariq Rana and Ramon Nanas. All have been charged.

A separate case was brought against two brothers, Ahzar Zia, a citizen of the United States and Pakistan, and Ummar Uppal, who the authorities said was an illegal immigrant. They own and control two stores in Suffolk County.

The defendants entered each employee’s personal information and hours worked into computer terminals at the stores. The parent company processed the payroll and sent the wages to the employers for distribution. The defendants, officials said, never paid the workers all that they were due.

Instead, prosecutors said, they might have earned $300 to $500 per week for 100 hours of work.

Ms. Lynch said the employees “were not innocent victims in this scheme,” but added that they had been abused.

Investigators have not found a connection between the two families, suggesting that the knowledge of how to exploit the payroll system could have been widespread and the ongoing investigation is based on payroll records provided by the parent company. Prosecutors are seeking $30 million in forfeiture from the stores and the corporate parent.

The charges were announced at a news conference by Ms. Lynch and James T. Hayes, who is in charge of ICE’s office of investigations in New York City, along with officials from the New York State Police and the Suffolk County Police Department.

“From their 7-Eleven stores the defendants dispensed wire fraud and identity theft, along with Slurpees and hot dogs,” Ms. Lynch said. “In bedroom communities across Long Island and Virginia, the defendants not only systematically employed illegal immigrants but concealed their crimes by raiding the cradle and grave to steal the identify of children and even the dead.”

Ms. Lynch said the defendants “ruthlessly exploited their immigrant employees,” forcing them to live in unregulated boardinghouses and “creating a modern -day plantation system.”

In one instance, an employee of one franchise was paid using the Social Security number of a former 7-Eleven employee, a person who had not worked for the store for 10 years and who had been the target of collection efforts by the Internal Revenue Service for much of that time because of the reported payments to the illegal immigrant, officials said.

The charges against the owners and managers, eight men and a woman, included wire fraud conspiracy and aggravated identity theft. Each pleaded not guilty in federal court and was held in custody pending trial.

The conduct charged in the indictment, officials said, had been going on since 2000, during which the defendants generated more than $180 million in revenue.

One of the raids took place around 6 a.m., at a 7-Eleven on Carleton Avenue in Islip Terrace, on Long Island, according to a law enforcement agent at the scene who declined to give his name or reveal the agency he worked for. One person, he said, was taken into custody from the store and two people were taken away from a house across the street.

A neighbor who lives near the house said the home had been divided into several apartments.

“It’s packed in there,” said the neighbor, who asked not to be identified. “There’s been a constant flow of new people coming in.”

Added updated NY Times article to the Homepage with slightly amended title:
http://www.alipac.us/content.php?r=1...igration-Raids

In Depth

Chesapeake, Va. Beach men charged in 7-Eleven probe

The Virginian-Pilot - ‎22 hours ago‎

In order to get the best experience with our photo galleries, you must enable JavaScript in your browser. 1 of 2 photos: Zahid Baig, 52, of Chesapeake, right, Shannawaz Baig, 62, of Virginia Beach, middle, and Tariq Rana, 34, of Chesapeake, were escorted ...

See all 258 articles » https://news.google.com/news/story?p...OTC4v0a23p8ZJM

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Coalition Leader, Authorities Speak Out Over 7-Eleven Raid

Defendants exploited immigrants, "creating modern-day plantation system," says U.S. attorney

CSP Daily News | June 18, 2013
BROOKLYN, N.Y. -- In the wake of the indictments of nine independent 7-Eleven franchisees and managers from Long Island, N,Y.--charged with conspiring to commit wire fraud, stealing identities and concealing and harboring illegal immigrants employed at 7-Eleven Inc. franchise stores throughout Long Island and Virginia--Bruce Maples, chairman of the National Coalition of Associations of 7-Eleven Franchisees, released a statement.
Meanwhile, federal and local authorities weighed in on the situation.
"Members of the National Coalition of Associations of 7-Eleven Franchisees pledge to observe the highest standards of competency, fairness and integrity in the conduct of their relations as franchised owners of 7-Eleven stores. Every franchisee is an independent contractor, and solely controls the operation of their store(s). The national coalition expects every member of our organization to operate their stores in an ethical and honest manner, in accordance with all U.S. laws and consistent with the 7-Eleven franchise agreement," said Maples, whose Tucson, Ariz.-based group represents the interests of approximately 4,700 convenience store owners with nearly 5,900 franchise-owned stores that employ more than 40,000 workers.
Bruce MaplesThe nine defendants are Farrukh Baig, 57, and Bushra Baig, 49, a married couple who owned, co-owned or controlled 12 of the 14 7-Eleven franchise stores, located on Long Island and in Virginia; Zahid Baig, 52, and Shannawaz Baig, 62, Farrukh Baig's brothers who helped to manage and control the stores; and Malik Yousaf, 51, Tariq Rana, 34, and Ramon Nanas, 49. Brothers Ahzar Zia, 49, and Ummar Uppal, 48, indicted separately, owned and controlled two other Suffolk County 7-Eleven franchise stores.
During the course of the conspiracies, they allegedly hired dozens of illegal immigrants, equipped them with more than 20 identities stolen from U.S. citizens, housed them at residences owned by the defendants and stole substantial portions of their wages.
"As set forth in the indictments, the defendants used 7-Eleven as a platform from which to run elaborate criminal enterprises. From their 7-Eleven stores, the defendants dispensed wire fraud and identity theft, along with Slurpees and hot dogs. In bedroom communities across Long Island and Virginia, the defendants not only systematically employed illegal immigrants, but concealed their crimes by raiding the cradle and the grave to steal the identities of children and even the dead. Finally, these defendants ruthlessly exploited their immigrant employees, stealing their wages and requiring them to live in unregulated boarding houses, in effect creating a modern day plantation system," said Loretta E. Lynch, U.S. attorney for the Eastern District of New York, who announced the arrests, charges and seizures.
"The 7-Eleven franchises seized today will be better known for their big fraud than their Big Gulp. As alleged, the franchise owners knowingly and repeatedly employed an illegal workforce and abused and exploited that workforce for more than 13 years," said James T. Hayes Jr., Special Agent-in-Charge for the U.S. Immigration & Customs Enforcement (ICE) Homeland Security Investigations, New York field office (HSI) "This charged criminal scheme had a vast detrimental effect on both the employees who were overworked and cheated out of wages, as well as the more than 25 American citizens whose lives were upended by the theft of their identities in furtherance of the scheme."
Joseph A. D'Amico, superintendent of the New York State Police, said, "As alleged in the indictment, these nine individuals took full advantage of illegal immigrants through a multi-state scheme that generated millions in profits for themselves while ignoring the common decency in the employer/employee relationship. The defendants allegedly provided the illegal immigrants with false documentation, stole significant portions of their wages and set them up in living arrangements that left the individuals completely beholden to them. I commend the unwavering dedication of the State Police Investigators who worked with our partners from federal, state and local law enforcement to make these defendants accountable for their actions."
Edward Webber, commissioner of the Suffolk County Police, said, "As charged in the indictments, the defendants have been exploiting vulnerable individuals who, due to their immigration status, may have been afraid to come forward and report possible wrongdoing by their employers," said Suffolk County Police Commissioner Webber. "This multi-agency investigation illustrates our commitment to fighting against employers who abuse immigrant employees for their own financial gain."
And Edward Ryan, special agent in charge for the Social Security Administration Office of the Inspector General (SSA-OIG), said, "The Social Security Number System within the Social Security Administration (SSA) tracks individuals' earnings throughout their work history to later determine the SSA retirement benefit they have earned. The type of alleged actions of the individuals named in this indictment not only violates federal law, but also threatens the integrity of the Social Security Number System by causing wages to be erroneously posted to SSA's system of records."
In a previously released statement, Dallas-based 7-Eleven Inc. said, "The U.S. Attorney's Office in Brooklyn [on Monday] announced it had filed two indictments related to alleged wrongdoing by independent 7-Eleven franchisees. 7-Eleven Inc. has cooperated with the government's investigation. All of our franchise owners must operate their stores in accordance with laws and the 7-Eleven franchise agreement. 7-Eleven Inc. will take aggressive actions to audit the employment status of all its franchisees' employees. 7-Eleven Inc. is taking steps to assume corporate operation of the stores involved in this action so we can continue to serve our guests. We continue to cooperate with federal authorities in this matter."

Source: CSP Daily News
http://www.cspnet.com/news/corporate/articles/coalition-leader-authorities-speak-out-over-7-eleven-raid

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Dallas-based 7-Eleven seizes two more stores in Virginia from franchisees in ongoing illegal immigrant investigation


By Maria Halkias
8:24 am on June 27, 2013
Dallas News

Dallas-based 7-Eleven Inc. has taken over two more stores in Virginia as a result of pending felony charges against its franchisees brought by the U.S. Attorney’s Office in Brooklyn.

Last week, federal authorities indicted owners of 7-Eleven stores in Virginia and in New York on Long Island arresting nine owners and managers charging them with harboring and hiring illegal immigrants.

Federal prosecutors called the scheme “a modern-day plantation system” forcing illegal immigrants to live in substandard conditions and giving them false Social Security numbers. Wages were minimal and stolen by managers.

On June 17, 7-Eleven seized control of 14 stores, ten on Long Island and four in Virginia. The company took over two more stores in Virginia on June 18, said 7-Eleven spokeswoman Margaret Chabris on Thursday.

“These stores are now open under the management of 7-Eleven Inc. 7-Eleven will continue to take action against franchisees who violate the law or its franchise agreement,” Chabris said in an emailed statement.

Last week it sent warning letters to franchisees and started auditing the employment status of all its franchisees’ employees.

“7-Eleven, Inc. is taking an aggressive approach to ending its relationships with franchisees who violate the law or its franchise agreement,” she said.

Most of the chain’s 7,345 U.S. stores are franchisee-owned. As of May, 5,974 stores are franchisee-owned. Similarly, in Texas 315 of the 708 stores are owned by franchisees.

Last week, federal agents fanned out across the country to execute multiple search and seizure warrants and inspect approximately 30 7-Eleven franchise stores, the U.S. Attorney said.

7-Eleven said it continues to cooperate with the government’s investigation.

http://bizbeatblog.dallasnews.com/20...tigation.html/