What Was Behind the Big Raid

When Peter Smith, a senior immigration enforcement agent in upstate New York, led the raid on a cavernous IFCO Systems wood products plant just outside of Albany this week, he was taken aback by what he saw.

“There was a lot of drilling, cutting, dismantling of old pallets, pneumatic nail guns, power saws. Most of these guys were working in jeans, tennis shoes, short-sleeve shirts; some had sawdust in their hair,” he said. “No legal facility would let workers work in those conditions.”

Wednesday’s raid at the plant in Guilderland was one of about 40 at IFCO facilities in 26 states. The operation offered a look into the shadowy world of businesses that the government says do more than turn a blind eye to hiring illegal immigrants: They make such workers part of the basic business plan.

In IFCO’s case, the government says, managers systematically recruited illegal immigrants -- helping them procure false identification, assisting with transportation beyond the border, even coaching them on how to avoid trouble with the police. Then, the workers allegedly were given jobs in substandard conditions.

Officials at IFCO’s Houston headquarters did not respond to calls for comment, but in a news release Friday the company said it was cooperating with authorities and had begun an internal investigation.

“We are now working to understand the facts and implement any additional changes necessary to further improve current procedures,” the statement said.

Smith said he had never seen illegal hiring on such a large scale. About 1,200 workers were arrested on suspicion of being illegal immigrants, and seven IFCO managers were charged with immigration-related crimes. The raids set a record for federal workplace-enforcement arrests in a single day.

Tina Sciocchetti, assistant U.S. attorney for the Northern District of New York, whose office is overseeing the case because the investigation began in New York, called the numbers “eye-popping.” As many as 53% of IFCO’s 3,500 workers nationwide were using invalid Social Security numbers, she said.

At most sizable companies, Sciocchetti said, fewer than 1% of workers would have irregularities in their Social Security numbers.

In announcing the arrests Thursday, Glenn T. Suddaby, U.S. attorney for the district, said that “being able to hire that cheap labor” gave a company a competitive advantage. Whereas workers in similar plants make $9 to $14 an hour, according to industry reports, IFCO employees in Houston were reportedly making about $6.50 an hour. And immigration authorities said a former IFCO bookkeeper had told them “Mexican workers” were underpaid for overtime.

Last year, IFCO Systems North America generated revenue of $576 million, according to the company, which is part of a Dutch conglomerate.

Drawing on testimony from a former employee and undocumented IFCO workers taken into custody in 2005, as well as the assistance of a confidential undercover informant, federal investigators put together a picture of how IFCO managers allegedly bent, broke and ignored the rules.

It was the company’s seemingly unabashed use of illegal workers that first caught federal officials’ attention, they said -- specifically at the Guilderland plant.

The plant, which opened in 2004, specializes in pallet retrieval and recycling, and has listed Target Corp. and Best Buy Co. as among its customers.

The investigation began with an insider’s tip: IFCO workers at the Guilderland plant were seen tearing up their W-2 tax forms, and a company manager explained that they were illegal immigrants and would not be paying taxes.

A day later, immigration officials got a tip that IFCO managers were arranging for illegal immigrants to be transported from Texas to the New York plant.

That triggered a full-scale investigation. One result was the filing of criminal charges against seven IFCO managers including Robert Belvin, James Rice and Dario Salzano of the Guilderland facility; Abelino Chicas, an assistant general manager in Houston; and Michael Ames, a general manager at a Boston-area plant. The company says it has placed the managers on temporary leave.

The managers are charged with conspiracy to transport and harbor illegal immigrants and to encourage and induce them to stay in the U.S. for commercial advantage, a charge that carries a 10-year sentence.

Belvin and Salzano did not respond to requests for comment. Chicas, Rice and Ames could not be located for comment, and calls to their respective plants were not returned.

According to court documents, a former employee told immigration officials that IFCO commonly hired workers without Social Security cards, that IFCO seemed to do so nationwide, and that an assistant general manager had told the employee to minimize tax withholding from the workers’ paychecks because they would not be filing taxes.

Once investigators planted an informant inside the New York facility, Sciocchetti said, they learned that Belvin and other managers seemed to spend time on helping employees work around their illegal status and on moving illegal workers from plant to plant.

The informant had helped authorities with a previous case, against smugglers of immigrants in Texas, according to court documents, which said he had no criminal record or charges pending and was paid for his informant work by officials.

Under the surveillance of immigration officials, the informant applied for a job with Belvin on April 6, 2005, saying he had no papers but would buy them over the weekend in New York. Agents reportedly recorded Belvin telling the informant he could start working and asked him to bring in papers the following Monday.

An affidavit filed with a federal court in New York details much of what the informant said he learned over the following months as he became a helper and translator for Belvin, Rice and other managers:

The informant listened as managers told workers they would be fired under their current name and rehired under a different one. He watched as the managers arranged the transportation of illegal workers among the plants. He consulted managers about his own fake ID, which bore someone else’s photo, as agents recorded the conversation.

When Rice photocopied the informant’s fake green card “to see what it looks like,” he said, “It looks like you to me.”

The informant sat in as managers from other plants discussed how to recruit workers by placing ads in Spanish-language newspapers; how to calm workers’ nerves about immigration enforcement; and how Chicas, the Houston manager, often sent illegal workers to New York.

And the informant translated, the affidavit says, as Belvin gave employees tips on how to avoid arrest, such as not carrying their false papers in public.

In October 2005, the informant said, he was asked to help Ames recruit workers for a new Boston-area plant. They went to a bakery where Brazilian immigrants were known to gather.

The potential workers “have no documents, no papers, no permission to work in the United States,” the informant was quoted as telling Ames.

Ames allegedly responded: “But you know how to work the deal.... I don’t want it to end up where they can’t be paid, because of identity, ID, you know what I’m saying.”

According to government documents, the managers often asked the informant to help secure fake identification papers for illegal workers.

Though federal authorities have raided workplaces in the past, administration and immigration officials said, the IFCO crackdown marks the beginning of a new period of tougher work-site enforcement.