A steel manufacturing company has been ordered to forfeit $6 million — a near-financial death sentence — after admitting it had run a pipeline for “dozens” of illegal immigrants from Mexico to come and work for it, undercutting competitors.
All Steel Carports Inc. told the court in a sentencing memo that owner Ignacio Chavez, who came to the U.S illegally himself before winning legal residency in 2009, didn’t consider hiring illegal immigrants to be a big deal.
“In his culture laws are there but few respect them,” the company’s lawyers wrote.
The Biden administration cut him a break, dropping human smuggling and money laundering charges the Trump administration had brought. In a case of ironic timing, the criminal case against Mr. Chavez was terminated just days after the Biden administration announced it was shifting its workplace immigration enforcement away from illegal immigrants and toward “unscrupulous employers.”
In Mr. Chavez’s case, he had been an illegal immigrant and became the unscrupulous employer, according to case files.
Prosecutors announced the forfeiture on Friday.
Investigators say All Steel, which manufactured metal parts and installed them as carports, was built on an illegal workforce, with “the vast majority” of employees comprised of Mexicans smuggled across the border and to the company’s locations, where the company assigned them stolen or fake identities.
And the company even paid to acquire for the illegal immigrants driver’s licenses from California, which is more relaxed about issuing documents to illegal immigrants, investigators said.
At one point, after Homeland Security agents arrested an illegal immigrant employee, All Steel paid the $30,000 bond to free him from detention, then brought him back to work — despite the fact that U.S. Immigration and Customs Enforcement had now officially flagged him as being in the country illegally.
The company brushed off warnings from the Treasury Department that dozens of Social Security numbers it was submitting for its employees didn’t match up, investigators said.
Yet it doesn’t appear those alerts rang many bells inside the government.
Instead, court documents suggest the feds began investigating after a whistleblower inside the company came forward and talked, then agreed to turn informant and recorded conversations that included higher-ups at the company.
According to investigators, Mr. Chavez was just one of several figures involved in the scam. The company’s vice president, Michael Burton, who had prior federal fraud convictions, “knows of, and actively encourages, All Steel’s use of a predominantly illegal alien work force,” Homeland Security Investigations special agent Brian Turk wrote in a court filing.
He said the company’s human resources manager also knew the company recruited illegal immigrants.
The company’s lawyers portrayed Mr. Chavez as both a go-getter who founded a major national company and an amiable dupe who was led around by underlings.
“Mr. Chavez is very intelligent, but because of his limited English and lack of education, he has relied on people he likes and is comfortable with to make decisions for him and his company,” the lawyers told the judge. “Ignacio has always viewed Americans as honest and trustworthy. In his world, the lighter your skin color, the more competent and professional you are supposed to be. It is a combination of these cultural biases, lack of sophistication in American culture and his trusting nature that led to this situation.”
The lawyers also speculated in their memo to the judge that the company’s management, knowing Mr. Chavez himself was once an illegal immigrant, “took the human resources part of running the company lightly.”
Investigators painted a different picture, accusing Mr. Chavez of cheating to claim hundreds of thousands of dollars in federal coronavirus relief funds. At one point Mr. Chavez used more than $210,000 in Paycheck Protection Program money to buy an Audi R8, Mr. Turk said in an affidavit.
All Steel’s lawyers said the company almost didn’t survive the $6 million forfeiture and has ended the carport installation part of its business, which is where the company claims most of the illegal immigrants worked.
The Biden administration last month announced it would no longer conduct mass worksite raids to weed out illegal immigrant workers, saying those proved too harmful to the illegal immigrants, their families and the broader communities in which they lived.
Instead, Homeland Security Secretary Alejandro Mayorkas said he wanted his investigators to focus on the employers.
“We can most effectively protect the American labor market, the conditions of the American worksite, and the dignity of the individual by focusing our worksite enforcement efforts on unscrupulous employers,” Mr. Mayorkas said in his directive.
The Washington Times has reached out to Homeland Security for comment on the closure of the All Steel case and the termination of its prosecution against Mr. Chavez.
An informant inside the company told investigators that All Steel employed at least 220 employees and subcontractors across its fabrication and construction plants, and the vast majority of those — from foremen to laborers — were in the country illegally.
One Texas plant even had living quarters for the illegal immigrants.
The $6 million accounts for the illegal income derived from employing the unauthorized workers, prosecutors said. All Steel also forfeited two pickup trucks and the Audi R8, with a combined value of more than $300,000.
The forfeitures accounted for nearly half of the company’s assets.
The company also faces three years on probation and must work with Homeland Security to tighten its employment practices.
Prosecutors said they hoped the $6 million forfeiture would be enough to deter other businesses from the same kind of scam, which is why they didn’t ask for a stiffer sentence beyond the probation and a “modest” fine.
“This low risk of returning to illegal hiring practices militates against imposition of a significant fine in this case,” the prosecutors wrote to the judge in a sentencing memo.
Even still, prosecutors acknowledged in their memo that when one company hires illegal immigrants, it often spurs others to do the same in order to compete.