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LABOR & EMPLOYMENT LAW — 08/18/09

Doughnut company forfeits $1.3 million for harboring undocumented workers

Shipley Do-Nut Flour and Supply Company Inc was sentenced August 7, 2009, to court supervision for a period of three years, to pay a criminal fine of $250,000 and forfeit $1.334 million to US Immigration and Customs Enforcement (ICE) for harboring undocumented workers, ICE Assistant Secretary John Morton and US Attorney Tim Johnson announced.

US District Judge Ewing Werlein, Jr. handed down the sentence in federal court in Houston on August 7. The company, through its president, Lawrence Shipley III, pled guilty to conspiring to harbor undocumented workers in September 2008.

“An effective immigration enforcement strategy must target the illicit labor market that fuels illegal immigration,” said Morton. “ICE will hold employers and businesses accountable and will hit those who knowingly break the law where it hurts - their bottom line.”

As part of its plea agreement with the United States, the company undertook measures to revise its immigration compliance program and implemented new procedures to prevent future violations of federal immigration laws. The $1.334 million forfeited to the United States was paid in lieu of the United States forfeiting the company’s interest in various company-owned residences where illegal alien employees were housed during the conspiracy.

Warehouse managers Jimmy Rivera and Julian Garcia, and warehouse supervisor Christopher Halsey, all of whom had authority to make managerial decisions including, but not limited to, hiring, job assignment and termination decisions for the company, also pled guilty to misdemeanor charges of hiring or continuing to hire illegal aliens. All three men were sentenced to six months’ probation and received fines in the amounts of $1,500, $2,000 and $1,000, respectively. Lawrence Shipley pled guilty on August 28, 2008, to continuing to hire illegal aliens and was sentenced to a similar probationary term and fined $6,000.

The charges against the company arose from a criminal investigation initiated by ICE in January 2008 that included interviews with former employees and a thorough review and analysis of I-9 forms and Social Security Administration (SSA) No-Match letters. I-9 forms require an employer to establish an employee’s identity and verify their employment eligibility at the time they are hired. SSA No-Match letters are sent to employers when reported Social Security numbers on W-2 forms do not match known Social Security numbers.

During an April 2008 enforcement action at the Houston-based company’s facilities, ICE agents administratively arrested 27 illegal aliens who were employed by the company and lived in company-provided housing located at or near the warehouse. ICE agents also recovered 42 No-Match letters sent by the SSA that placed the company on notice that the aliens did not have valid Social Security numbers.

For more information on this and other topics, consult CCH Employment Practices Guide or CCH Labor Relations.

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