Posted on 04/21/2006 5:20:33 AM PDT by kinghorse
Company's success was 'curious' to competitors Feds think illegal labor key to Houston division's record profits
By ROBERT CROWE Copyright 2006 Houston Chronicle
When Houston-based IFCO Systems North America Inc. reported record profits last year, others in the unglamorous business of recycling wooden pallets couldn't help but wonder how the company did it.
"We were all very curious about this," said Chaille Brindley, assistant publisher of the trade magazine Pallet Enterprise. "They were able to do things that other companies just couldn't do."
Federal investigators think a significant portion of those profits came on the backs of illegal immigrant workers recruited in Houston and bused to at least 26 plants across the country, where they reassembled worn pallets for substandard wages.
And the company may have been able to keep prices low by paying low wages.
"Pallet recycling normally requires a lot of physical labor ... but you can earn a fair living doing that," Brindley said.
Major clients With 53 plants across the country, the nation's largest supplier of recycled pallets has the infrastructure to handle large volumes for its major clients, such as Target, Kmart, Office Depot, Tyson, Rite-Aid and The Home Depot.
The company has stated that pallet recycling last year "contributed overproportionally" to its gross profit of $116.2 million — a nearly 40 percent increase over 2004. In all, the company raked in more than half a billion dollars in revenue.
"Being a national company allows IFCO to offer a complete range of services for pallet management, from supply through recovery, reconditioning and disposal," said Dave Russell, president of IFCO Systems North America, in a December 2005 press release.
"It also has a very low price," Brindley said. "A lot of retailers went because they were able to get that national service at a low price."
The company saysit recycles more than 50 million pallets annually. Some need only a few more nails or some metal clips to shore up loose corners. Most are stripped down to individual wood planks. It's back-breaking work where employees use crowbars to pry apart planks and reassemble them with heavy-duty nail guns.
A typical worker might make $9 to $14 an hour, Brindley added. Though IFCO officials could not be reached for comment Thursday , the family of one Houston employee, an illegal immigrant, said he was making about 25 to 35 cents per pallet, or about $6.50 an hour.
"That's a low number," Brindley said.
A criminal complaint alleges Houstonians James Rice, 36, and Abelino "Lino" Chicas, 40, established a plant in Guilderland, N.Y., with workers they knew to be illegal immigrants.
Neither could be reached for comment on Thursday.
Rice was a new market development and regional general manager in Houston last year. Chicas, a naturalized United States citizen from El Salvador, is the assistant general manager of the west Houston plant.
The criminal complaint states that Rice had accepted a resident alien card for an illegal immigrant — a confidential informant — trying to get a job with the company. The name on the card was not the informant's real name, and the photo did not resemble the informant, the complaint states. After Rice allegedly photocopied the card, he looked at it and stated, "looks like you to me," then advised a bookkeeper to change the informant's name on an employee list to the name on the false identification card.
'Writing on the wall' The allegations surprised Houston employment and immigration attorney Jacob Monty, who tends to sympathize with illegal immigrant workers and the employers who might hire them.
"If these allegations are true, this shows a sheer disregard for identification requirements," Monty said. "Here you see the writing on the wall of playing fast and loose with requirements, and managers are facilitating employment of undocumented workers."
Monty thinks the allegations might have been the work of a few rogue, mid-level managers. Brindley, however, thinks the feds will ultimately try to use employees such as Rice and Chicas to go after executives, none of whom were charged in the complaint.
Though IFCO's parent company is based in Europe — its stock is publicly traded on the German stock exchange — its pallet recycling operations are based in Houston.
At the rate of 1,187 arrests per day, it would take 25.389205 years to arrest all 11 million illegal aliens now estimated to be in the country.
I predict the next arrest will orccur just prior to the ellection and will net about 500 illegal Mexican souls.
We will all be comforted by this, and we will continue to allow the politicians a pass, because the are "trying" and making "real progress."
bookmkPing , and thanks kinghorse
Yep, wake me up when one of these executives is in jail. I'm setting my snooze alarm for 2008.
This is a very complex organizational structure.
"HOUSTON--(BUSINESS WIRE)--March 21, 2006--Reusable Container Company LLC, a subsidiary of IFCO SYSTEMS, announced today that it has completed the purchase of certain assets of the Reusable Plastic Container (RPC) Services Business of CHEP USA. Details of the transaction were not disclosed."
http://uk.us.biz.yahoo.com/bw/060321/20060321005702.html?.v=1
Stupid pubbies. This is a German chartered company, based in the Netherlands, with Swiss and Austrian financing. The little LLC's (Limited Liability Corp's) are untouchable. It cost ICE more in freakin manpower and gasoline than will EVER get recovered in fines. Nobody will be indicted, let alone prosecuted. The American public has been P0WN3D, with the explicit knowledge and support of congress. Someone please prove me wrong with a link showing the names, titles, and specific charges from the indictments.
More like 50.778410 years, because it took one year to put *this* sting together. That sort of rules out anything before the 2006 elections, too. Breath-holding will only result in lots of blue people, heh heh.
"Toronto (PRWEB) June 9, 2005 -- Paramount Pallet Inc. (“Paramount”) announced today that it has recently purchased six (6) pallet services facilities located in Alberta, Quebec, Ontario, Manitoba and British Columbia. These facilities were previously the Canadian Pallet Services Division of IFCO Systems N.V. (“IFCO”). The sale was official on June 3, 2005 and terms of the agreement were not disclosed."
http://www.emediawire.com/releases/2005/6/prweb248889.htm
The net proceeds from this offering are estimated to be approximately $177.0
million (after deducting underwriting discounts and other estimated costs). The
proceeds of this offering, together with the proceeds from the high yield debt
offering, will be used primarily to repay a substantial portion of the existing
indebtedness of the IFCO Companies and PalEx, to pay the merger consideration
to PalEx's stockholders, and to fund the other concurrent transactions. IFCO
Systems has summarized below the estimated sources and uses of funds, assuming
that the merger, this offering, the high yield debt offering, the other
concurrent transactions, and the debt repayments had occurred as of October 31,
1999. The actual sources and uses of proceeds will vary from those summarized
below, depending on the actual date of the closing and the exchange rate on
that date.
Amount
I don't know about the executives. As far as the illegals arrested, the information I've found so far is about the arrests in Houston and New York.
April 20, 2006 - Dozens of illegal immigrants arrested, released in hours [Houston]
www.freerepublic.com/focus/f-news/1618305/posts
April 20, 2006 - IFCO worker speaks out after arrest [ICE Raid - New York]
www.freerepublic.com/focus/f-news/1618485/posts
As far as what happens next, the men said they're required to appear in a Buffalo courtroom in a few weeks.
ping
Three new members elected to the Board of Directors of IFCO
Systems N.V.
Amsterdam, December 29, 2003 – The Extraordinary General Meeting of IFCO
Systems N.V. accepted today the resignation of the former Directors C, Mr. Jeremy
Brade, Mr. Antonius C.M. Heijmen and Mr. Richard J. Moon from the board under full
discharge with effect from December 29, 2003.
Mr. Michael Phillips, Mr. Ralf Gruss and Dr. Philipp Gusinde were elected as the new
Directors C to the Board of Directors of IFCO Systems N.V., effective immediately.
The Extraordinary General Meeting of IFCO Systems N.V. also adopted the 2002
Annual Accounts (the “Dutch 2002 Annual Accounts”) and discharged the members
of the Board of Directors for the fulfilment of their duties during the financial year
2002.
http://www.ifco-us.com/news/IFCO_IR_031229_Press_ThreeNewMembersElectedToTheBoardOfDirectorsOfIfcoSystemsNV_en.pdf
"A typical worker might make $9 to $14 an hour, Brindley added. Though IFCO officials could not be reached for comment Thursday , the family of one Houston employee, an illegal immigrant, said he was making about 25 to 35 cents per pallet"
I'm sure you would do this job, if offered. However, as an employer, your $9-14 an hour in salary costs me $18-28 in order to provide you with benefits, pay social security taxes and retirement benefits, just to start. Let's not even consider just how much it costs just to convince the gov't that I'm in compliance with all the legal mumbo-jumbo (which in effect, makes me as employer an agent of the state -- reporting your income to the government, for example) that comes with employing you.
I don't want to see companies remain profitable or competetive by hiring illegal labor, but something also needs to be done with the crushing costs of benefits and such. There also needs to be a change of attitude in the American worker; there are no "jobs Americans won't do", only "jobs Americans wont do because they don't come with dental and a 401(k)".
The issue is not the pay scale; the issue is the benefits and the compliance costs.
I'm not sure I get the point of your post. Was it for informational purposes, or am I missing something?
ping
http://www.freerepublic.com/focus/f-news/1617489/posts?page=186#186
Excerpt:
ICE agents arrest seven managers of nationwide pallet company and 1,187 of the firm's illegal alien employees in 26 states
Roughly 53 percent of the firm's employees during 2005 had invalid / mismatched Social Security numbers
WASHINGTON, D.C. -- Homeland Security Secretary Michael Chertoff; Julie L. Myers, Assistant Secretary for U.S. Immigration and Customs Enforcement (ICE); and Glenn T. Suddaby, United States Attorney for the Northern District of New York, today announced the results of a nationwide worksite enforcement operation targeting IFCO Systems North America, Inc. ("IFCO"), the largest pallet services company in the United States headquartered in Houston, Texas.
Yesterday, ICE agents arrested seven current and former manages of IFCO pursuant to criminal complaints issued in the Northern District of New York. All these individuals are charged with conspiring to transport, harbor, and encourage and induce illegal aliens to reside in the United States for commercial advantage and private financial gain, in violation of Title 8, USC Section 1324 (a). The conspiracy charge carries a penalty of up to 10 years in prison and a fine of up to $250,000 for each alien with respect to whom the violation takes place. Two other IFCO employees were arrested on criminal charges relating to fraudulent documents.
In addition to the criminal arrests, ICE agents yesterday conducted "consent" searches or executed criminal search warrants at more than 40 IFCO plants and related locations in 26 states that resulted in the apprehension of approximately 1,187 illegal alien IFCO employees. Three of the criminal search warrants were executed at residences in Guilderland, NY, where IFCO was allegedly housing illegal alien employees.
bump
Capitalism?
Is everyone else able to buy large homes in your middle class suburb because they don't pay taxes AND they get free medical care too?
Ice Ice baby. We didn't have enough bureaucracy not enforcing laws on the books so we added another layer. Perfect. Was this created so the border patrol guys wouldn't loose face with the immigres they reluctantly have to grab.
Wonderful lesson here. When you pooh pooh one law, people very quickly cotton to the idea that you aren't much interested in other laws either.
Here is a list of the Directors. They are all citizens of the UK. Good luck with all that.
Each director of Apax Europe Managers is a citizen of the United
Kingdom.
NAME TITLE PRINCIPAL OCCUPATION
---- -----
Furthermore it's easier to keep the illicit business on the down low when your employees are all law breakers to begin with. And don't speak Ingles.
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