If the employer un-knowingly or un-intentionally hired the illegal, he is not subject to sanctions. If the employer checked the employees names and data against the fed's employee verification database and got the OK to hire, then he has no liability, and if this is the case, then the ex-employee who blew the whistle would be subject to prosecution.
If the employer didn't use the fed verification system and hired illegals, even though the employer has his I-9 docs on file, then the employer is subject to sanctions.
A first time employer offender is subject to having his business license revoked for 10 days. A second time employer offender can have his business license revoked permanently.