IFCO agrees to $20.7 million settlement

12/24/2008 12:00:00 AM
Ashley Bentley

(Dec. 24, 10:50 a.m.) Houston-based IFCO Systems NA has agreed to a $20.7 million settlement with the Department of Justice for employing illegal immigrant workers in its plants.

After the 2006 raid of 40 of the nation’s largest pallet management service company’s facilities by Immigration and Customs Enforcement, the company lost more than a quarter, 1,187, of its then 4,000 employees.

This settlement includes fines for the employment of illegal workers, as well as $2.6 million in back pay and penalties for overtime violations with 1,700 of IFCO’s pallet workers. The other $18.1 million is in civil forfeitures that will be available to support future law enforcement activities, according to an ICE news release.

The settlement does not cover the nine managers who were indicted and have already pleaded guilty to their respective charges nor does it cover four managers who were indicted this year and are awaiting trial. Three of the nine who have pleaded were guilty of felony charges, the others misdemeanors. One, Robert Belvin, former general manager of the Albany, N.Y., IFCO plant, pleaded guilty to two felony charges: conspiracy to transport and harbor illegal immigrants and conspiracy to possess identification documents with the intent to use unlawfully.

Mike Hachtman, senior vice president of IFCO, said the nine managers who have pleaded guilty are no longer with the company. The four who are awaiting trial, Charles Davidson, vice president of new market development; William Hoskins, new market development manager; Thomas Soto Castillo, operations manager for new market development; and Wendy Mudra, human resources manager, are still with the company on paid leave of absence.

In the settlement agreement, IFCO is required to follow several specific practices, at least through 2012. If at that time the company has been in compliance with all of the agreement’s terms and conditions, the U.S. Attorney’s Office agrees not to seek additional prosecutions.

IFCO has already started using Department of Homeland Security’s E-Verify screening program for all new hires, Hachtman said.

“All of our new employees are already screened with the E-Verify system,” Hachtman said. “It’s the most stringent system currently available.”

The company has also hired additional human resource managers, internal auditors and payroll employees, in addition to a vice president for corporate compliance, who will be able to focus more efforts on screening and monitoring hiring.

IFCO is also required to maintain a hotline that will be available to employees for reports of any suspected violations.


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