The Cost of Employing Undocumented Workers

From the Mo-Kan Construction Law Blog by Lee Brumitt

The Department of Homeland Security and the Internal Revenue Service sent a strong message to those who harbor undocumented workers. Owners of the Spring Hill contracting company Advantage Framing Systems Inc. were recently sentenced to serve at least a year in federal prison for harboring undocumented workers.

Authorities believe that the company was employing undocumented aliens to gain a competitive advantage against others in the construction industry. The undocumented workers were paid in cash as part of an effort to lower operating costs and boost profits. The company didn’t pay for Social Security, worker’s compensation or unemployment benefits for the undocumented workers. The DHS and IRS had been investigating the case since March 2012. Read the full indictment.

According to a release from U.S. Attorney Barry Grissom, the owners of the lumber framing company, James Humbert, Kimberly Humbert and Charles Stevens II, each pleaded guilty to one count of conspiracy to harbor illegal aliens for commercial advantage. The owners admitted to devising a payment scheme requiring crew leaders obtain insurance. The company then would pay the crew leaders, who were responsible for allocating the payments to the undocumented workers. The company paid 32 crews about $4.6 million in total.

Grissom also stated that Advantage Framing held safety training meetings at which employees were instructed on how to react if Occupational Safety and Health Administration investigators came to perform a site inspection. Undocumented workers were told to tell investigators that they worked for a subcontractor — not for Advantage directly. The company even ran drills to practice for such an event.

Last year, Advantage Framing crew leader, Edino Pacheco, also known as Dennis Erickson Portillo, was sentenced in a federal court after pleading guilty to harboring undocumented workers. Pacheco was sentenced to time served and turned over to U.S. Immigration and Customs Enforcement for deportation. Two other crew leaders, Angel Arguello-Plata and Jorge Uriel Delgado-Ovalle, are awaiting trial. Harboring undocumented aliens carries a maximum five-year prison sentence and a fine of as much as $250,000. Money laundering carries a maximum penalty of 20 years and a fine of $250,000.

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