GUILDERLAND — Two years after a nationwide raid, Houston-based IFCO has agreed to a $20.7 million settlement, the largest of its kind to date.

If the company fully complies with the terms of the settlement, the United States Attorney for New York’s Northern District won’t pursue corporate criminal charges against IFCO.

In early 2005, U.S. Immigration and Customs Enforcement got a tip that workers at the IFCO site in Guilderland’s Northeastern Industrial Park were tearing up their W-2 forms, which prompted an investigation that led to the April 2006 raid.  Federal and state officers searched more than 40 IFCO sites in 26 states and arrested several management-level employees and apprehended 1,182 employees who were working illegally.

“We were at work; it was a nationwide raid; all the factories were raided…They took me to an immigration center.  I don’t know the area, so I don’t know where it was,” said a man from Honduras who had worked at the Guilderland site when he spoke to The Enterprise soon after the raid.  “We were treated well; no one resisted and everyone was treated good…We don’t know how long we have to wait but we have to wait until the factory lets us back.”

Most of the workers were probably deported, Mike Hachtman, IFCO Systems North America’s senior vice president, told The Enterprise this week.  The company now employs about 4,000 people in North America, he said, most of who work on pallets.  IFCO reconditions wooden pallets and distributes them to manufacturers and retailers — it claims 11-percent of the market share in the United States.

“The government’s investigation documented that several IFCO managers and employees harbored and transported illegal aliens, and encouraged and induced them to remain in the United States as pallet workers,” says a statement from U.S. Immigration and Customs Enforcement.

The Honduras native, and the nine co-workers with whom he was living, were paid 30 cents for each pallet that they rebuilt, he said. 

The company has grown since 2006, Hachtman said, and people doing that type of work are paid either an hourly wage or “piece rate,” which, he said, can vary.

An analysis of payroll information provided by IFCO to the International Revenue Service and the Social Security Administration and of the hiring patterns and practices at the company suggests that between 2003 and April of 2006, as many as 6,000 illegal aliens worked at IFCO’s pallet plants, according to ICE.

IFCO has agreed to pay $20.7 million in civil forfeitures and penalties over four years.  The settlement includes $2.6 million in back pay and penalties for the company’s overtime violations involving 1,700 of its pallet workers, according to ICE, and $18.1 million in civil forfeitures “to support future law enforcement activities.”

Nine IFCO managers have pleaded guilty, including four from the Guilderland plant.  Robert Blevin, the former general manager, pleaded guilty to conspiracy to transport and harbor illegal aliens and conspiracy to possess identification documents with intent to use unlawfully, both felonies; Craig Losurdo and Dario Salzano, both former assistant general managers, pleaded guilty to unlawful employment of illegal aliens, a misdemeanor; and Scott Dodge, a former assistant general manager, pleaded guilty to conspiring to unlawfully employ illegal aliens, a misdemeanor.

The settlement agreement also includes a “compliance and reporting program,” according to ICE, which is designed to prevent the future employment of illegal workers at IFCO.  It will also use the Department of Homeland Security’s E-Verify screening program and it will verify workers’ Social Security numbers through the Social Security Administration.

IFCO has named a vice president of compliance, a new human resources manager, new internal auditors, and new payroll workers, Hachtman said.  “We clearly don’t want to see that happen again,” he said.