Your number two would likely work. The large and medium businesses would be able to hire lawyers to fight the process for years though so it would not be as fast as you think. I do think we will see employers prosecuted for hiring, but I think all the ducks have to be in a row. One reason the government quit going after businesses- before O even was president is because it is a long drawn out court battle and it takes a while to gather evidence to prove the case. If cases are lost due to liberal judges it weakens the laws.
The truth is there are no easy answers and it will be small battles to progress along the way. Enforcement has to start small (which it has) and build and build. The open borders politicians and lawyers have spent years tying the hands of the process and it will have to be undone little by little.
The very act of going after many companies would, by itself and without regard to results months or more down the line, act to make many, many other companies unwilling to hire illegals. That’d accomplish the goal, right there.
This is EXACTLY like the tax prosecutions announced in the month before April 15. The IRS doesn’t care if any of them are convicted - they are banking on the intimidation factor to work for them.