U.S. Seizes 14 7-Eleven Stores in Immigration Raids
U.S. Seizes 14 7-Eleven Stores in Immigration Raids
By WILLIAM K. RASHBAUM and MOSI SECRET
Published: June 17, 2013
Federal authorities seized 14 7-Eleven stores on Long Island and in Virginia early Monday, arresting nine owners and managers and charging them with harboring and hiring illegal immigrants and paying them using sham Social Security numbers, people briefed on the case said.
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Michael Nagle for The New York Times
Homeland Security officers entered a 7-11 in Islip Terrace, N.Y., on Monday.
Immigration and Customs Enforcement agents and federal prosecutors in Brooklyn were also investigating 40 other 7-Eleven franchises in New York City and elsewhere, the person said, and the prosecutors were seeking $30 million in forfeiture from the stores and their corporate parent. The franchises split their profits with the corporation, which handles the store payrolls, the people said.
The owners and managers — eight men and a woman — were charged in an indictment to be unsealed Monday morning, the people said. It included accusations of wire fraud and aggravated identity theft stemming from payment of employees who were illegal immigrants using the Social Security numbers of children and the dead, the people said.
One of the people said the owners and managers had abused and taken advantage of the illegal immigrant workers.
Many of those charged were of Pakistani descent and it was believed that most, if not all, of the illegal immigrants were also from Pakistan, one of the people said.
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, the people said.
The conduct charged in the indictment, the people said, had been going on for more than a decade. Twenty-five of the 40 additional 7-Eleven franchises under scrutiny were to be inspected on Monday as part of the ongoing investigation, the people said. Several of those stores were in New York City.
One of the people briefed on the matter, noting that the parent company handled the store payrolls, said there were no internal controls to prevent the same Social Security numbers from being used to pay more than one store employee, which happened in more than one instance.
Scott Matter, a spokesman for the parent company, said it was aware of the arrests and seizures and “has been cooperating with federal authorities during their investigation.” Mr. Matter said the company would have no comment until it learned more about the case.
By about 9 a.m., eight of the nine who had been indicted were in custody, five of them in New York and three in Virginia, one of the people said. The last individual was being sought.
One of the raids took place about 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. It was unclear what connection the house had to the investigation.
The store remained closed through the early morning, with law enforcement agents turning away customers who ordinarily stop in for coffee. A worker for the Town of Islip said he had seen similar law enforcement activity at several other nearby 7-Elevens.
The United States attorney in Brooklyn, Loretta E. Lynch, and James T. Hayes, who is in charge of Immigration and Customs Enforcement’s office of investigations in New York City, were expected to announce the charges later Monday morning, along with officials from the New York State Police and the Suffolk County Police Department.
http://www.nytimes.com/2013/06/18/nyregion/us-seizes-14-7-eleven-stores-in-immigration-raids.html?_r=0
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
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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.”
Dallas-based 7-Eleven seizes two more stores in Virginia from franchisees in ongoing
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/
