Employers Beware:  If an employee “confesses” that he or she is undocumented, you might be talking to a recording device provided by ICE (Immigration and Customs Enforcement).  If you ignore the information given by the employee and try to help, you may find yourself subject to a Federal Grand Jury Indictment, as in the case of managers working for Mambo Seafood Restaurants in Houston, Texas (“Mambo”).

In December 2009, an ICE investigation uncovered 33 undocumented employees at Mambo’s headquarters and two Mambo restaurants.  Usually, when an ICE agent visits an employer, he will ask to “audit” the employer’s I-9s and other records to determine whether the company’s I-9s were properly completed, eventually to report errors and list unauthorized employees who must be terminated.  ICE may levy fines in some instances, and the employer will assure ICE that it will develop a plan to assure future I-9 compliance.  First-time offenders who cooperate fully with ICE and follow through with the compliance plans are usually not prosecuted criminally.  What is unique about the Mambo matter is that the investigation was the result of several months of a covert investigation by ICE, using cooperating employees.

The indictment described ICE’s use of an “ICE cooperating witness (CW-1)”, who wore a recording device when discussing her “problems” with a Mambo manager.  She indicated she needed to change her identity and work authorization and use a false name and false social security numbers because she was making too much money under her real name to obtain Medicare benefits.  This meant the Mambo manager would need to complete a new I-9 for her under the fake identity, and the manager went along with the plan.  A few months later, the same manager allowed CW-1 to use the fake documents to obtain a Texas Alcoholic Beverage Commission Permit so she could serve alcohol.  The manager also devised a plan to allow CW-1 to use the “green card” of another person who had returned to Mexico. 

In a separate instance, ICE used another witness, CW-2, who also wore a recording device.  When CW-2 was asked by another manager whether her social security number was valid because she was being considered for a promotion, CW-2 confessed that her social security number was false.  Instead of terminating CW-2, the manager allowed CW-2 to continue to work, but without health insurance.

A third manager was indicted for completing the I-9s for CW-1 and CW-2, knowing that the information contained on the “new” I-9s was false.  The manager was aware of CW-1’s and CW-2’s true identities, having been working with them for several years. 

All three managers were charged with conspiracy and making false statement.  If convicted, the maximum penalties for the conspiracy and false statement charges are imprisonment of 20 and 8 years, respectively.

Most employers are not aware that victims of human trafficking and other crimes who agree to cooperate with the authorities can be offered legal status and work authorization in the U.S., which may eventually allow eligibility for U.S. permanent residence (“green card”).  The law is complicated and there are many restrictions, but it does exist.  The Indictment did not suggest whether CW-1 or CW-2 were offered legal status in exchange for their cooperation, or whether they qualified for such benefits.  Nonetheless, it would not be unusual for ICE to make some kind of “deal” with CW-1 and CW-2 in exchange for their cooperation.    

We do not know what motivated the managers at Mambo or whether they were found guilty of the charges.  However, what is the “take away” for employers from the Mambo investigation?  If an employer has actual knowledge that an employee is unauthorized to work in the U.S., no matter how much the company may wish to help, the appropriate action, always, is to terminate the employee. 

We strongly advocate that employers are best served by scheduling an annual outside audit of their I-9 documents and employment verification processes.  The Mambo case, coupled with the affirmation of the legality of Arizona’s LAWA by the Supreme Court, just last month, underscores the importance for employers of a well-managed employment verification policy and practice, including an annual “outside” audit of company’s I-9s. 



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