Officials at N.C. company International Labor Management are charged with visa fraud
The Washington Post – Feb. 20, 2014
By Ken Otterbourg
VASS, N.C. — In 2008, Stanley Porter started a small company called Winterscapes LLC with a fake purpose: bringing in 150 foreign workers under the H-2B visa program to be snow makers in the mountains of North Carolina.
But some of the workers didn’t even know what a snow maker was. Once they arrived, most moved to landscaping companies that were clients of Porter’s and had not gone through the proper application process for hiring foreign workers.
Porter pleaded guilty to visa fraud and money laundering last year. But the case has now ensnared a much larger firm, International Labor Management , which for years has been a major player in the business of connecting U.S. employers with foreign workers for seasonal jobs. And federal officials say the company has been gaming the visa system for years, helping businesses skirt the law.
In a 41-count indictment filed late last month in U.S. District Court in Greensboro, N.C., federal officials accused International Labor’s founder, Craig Eury Jr., and his daughter, Sarah Farrell, of falsifying applications to obtain more worker visas than were needed and then dispensing them to companies that had not qualified to use the foreign employees.
Such temporary workers are in some ways a halfway point between the agricultural workers and the skilled tech workers who grab much of the attention in the battle over immigration reform, but they have become a critical part of many industries, including landscaping, state fairs, forest management and construction.
The government is seeking to seize from Eury at least $1.1 million that it says is tied to the alleged illegal activities. He faces a single count in the indictment and could be sent to prison for 10 years if convicted. The remaining 40 counts are against Farrell, whom the indictment accuses of coordinating most of the visa applications. Each count against her carries at least a 10-year prison sentence. Ripley Rand, the U.S. attorney for North Carolina’s Middle District, declined to comment on the indictment, citing a desire not to jeopardize court proceedings.
Defense attorney Kearns Davis said his clients deny the government’s allegations. Davis said in a statement that International Labor “has assisted hundreds of businesses across the country in navigating the complex guest-worker bureaucracy and paperwork process. In an industry that is closely scrutinized and politicized, they do the right thing for employers and guest workers while carefully following the law.”
Number inflation alleged
U.S. Citizenship and Immigration Services administers several programs for guest workers. The H-2A program is for agricultural workers. The H-2B program is for seasonal nonagricultural labor and is capped at 66,000 workers. Unlike H-2A workers, employees in the H-2B program are not provided housing. About two-thirds of H-2B workers come from Mexico.
The indictment says International Labor inflated the number of H-2B visas that its clients needed and then diverted the extra workers to employers who did not have government clearance. According to the indictment, there were more than 700 visa applications in the suspect pool, and the conspiracy ran from 2006 through February 2013.
In Porter’s case, the indictment says, Farrell worked with him on the fraudulent visa applications for the snow-making workers and later for janitorial workers who were also being diverted to landscaping positions.
After pleading guilty, Porter was sentenced to a year in prison and fined $100,000. He also pleaded guilty to a count of money laundering, which the government said happened when he wrote a check for $14,000 to International Labor. He is cooperating with federal prosecutors.
In the H-2B program, employers need to demonstrate that U.S. citizens do not want the jobs for which they are seeking foreign workers. They often fulfill that obligation by working with state employment offices, running help-wanted ads in newspapers and seeing who responds. The indictment says that International Labor coached employers on how to interview U.S. citizens for these positions in such a way that their hiring was suppressed.
International Labor was started in 1994. At the time, Eury was already well known in North Carolina for his work with the North Carolina Growers Association, which bills itself as the country’s largest procurer of foreign agricultural workers. The growers group is not part of this case, but the businesses are next to each other on the outskirts of the small town of Vass, which sits near the back of the sprawling Fort Bragg military installation in the state’s Sandhills region.
Despite the indictment against Eury and Farrell, International Labor is still operating. A woman who answered the door at the firm declined to answer questions.
Abuse is called common
Criminal prosecutions for H-2B violations are rare, said Jennifer Rosenbaum, the legal director for the National Guestworker Alliance, based in New Orleans. But she said that abuse of the program is common, with employers asking for more workers than they need and requesting the workers for periods far past when there is no longer any work for them to do. Both actions inflate the size of the labor pool and reduce workers’ ability to advocate for better pay and working conditions, she said.
Being moved to different employers is common as well, Rosenbaum said. This underscores the imbalance in the employee-employer relationship, she said, as guest workers cannot go in search of jobs on their own. Employees in the H-2B program, unlike H-2A workers, are not provided housing, reducing an employer’s costs and the incentive to provide sufficient hours for all workers, Rosenbaum said.
“This case takes a comprehensive look at how companies are gaming the system to disadvantage U.S. and foreign workers as well as companies that play by the rules,” she said.
Craig Regelbrugge, the senior vice president for industry advocacy and research at AmericanHort, the trade group for the horticultural and landscape industry, said the vast majority of companies that use foreign workers or act as procurement agents follow the rules strictly. “But there are a few bad apples, and the bad apples hurt everybody,” he said.
The cap has not been reached since the recession that began in 2008, according to statistics from Citizenship and Immigration Services. Regelbrugge said that is because hiring was down in many of the businesses that employ seasonal workers and also because higher domestic unemployment pushed many Americans to take seasonal jobs that they might have refused in better times. This year, he said, with the economy improving, the cap is again coming into play.