Recently, a federal judge sentenced the owner of an employment leasing company to 15 months in prison for conspiring to provide illegal alien workers to an air cargo firm based in Ohio. The judge also ordered the owner to forfeit a record $12 million representing proceeds of the crime. According to Julie Myers, assistant secretary for U.S. Immigration and Customs Enforcement (ICE), this is the largest forfeiture ever ordered in an illegal alien labor case. Myers has warned that:

“Companies that use cheap, illegal alien labor as a business model should be on notice. ICE is dramatically enhancing its enforcement efforts against illegal employment schemes.”

Case Background & Summary

Maximino Garcia was the president and co-owner of an employee leasing company, Garcia Labor Company of Ohio, Inc. (GLC), which was based in Wilmington, Ohio. Beginning in 1999, GLC contracted with ABX Air, Inc. (and before that with Airborne Express) to provide temporary workers to sort freight at Wilmington Air Park.

Pursuant to the leasing contract, GLC agreed to provide qualified temporary workers to ABX Air at an agreed upon hourly rate. As the direct employer of these workers, GLC also committed to: maintaining all personnel and payroll records, calculating wages, withholding all required employer taxes, and complying with all immigration laws and labor laws.

Beginning in 2003, the Social Security Administration notified Garcia that several hundred GLC employees were using invalid social security numbers. However, Garcia continued to employ these same workers and took no substantive action to determine whether they were authorized to work in the United States.

In February 2004, ABX Air began requiring GLC to provide five years of employment background information on each of its workers. Garcia, through his representatives, assisted workers in providing false or inaccurate information in their responses. During this time, Garcia and his representatives also engaged in unlawful check cashing for the illegal workers, the majority of whom lacked valid identification to cash their paychecks.

In January 2005, the Transportation Security Administration conducted a regulatory compliance audit and inspection of ABX Air and Wilmington Air Park. After the federal inspection revealed that almost all of GLC’s workers used invalid or fraudulent Social Security numbers, ABX Air terminated its contract with GLC.

In July 2006, the ICE “raided” GLC. Thereafter, Garcia, along with his vice president and the human relations director, were indicted on forty counts of knowingly employing unauthorized workers, including charges of transporting and harboring illegal aliens and money laundering.

In October 2006, they pled guilty to conspiring to encourage, induce, aid and abet illegal aliens to reside and remain in the United States for the purpose of commercial advantage or private financial gain.

Conclusion & Recommendation

The Garcia decision represents what may be a new era of vigilant enforcement of immigration labor laws. It appears that the government is increasing its efforts to crack down on employment of illegal aliens, while courts are simultaneously increasing penalties for violations of immigration labor laws.

While the hefty penalties in the Garcia case were imposed against the employee leasing company and its representatives, companies contracting for labor services may also be subject to liability for the illegal employment practices facilitated by a contracting company.

To ensure compliance with federal and state law, companies using leased (or temporary) employees should (a) closely monitor the leasing company’s employment verification process and (b) insist that the leasing contract clearly designates (i) the type of verification process to be used and (ii) who is responsible for all verifications.