In one of the largest criminal alien employment investigations ever conducted by the U.S. Department of Justice and the U.S. Department of Homeland Security (DHS), Federal authorities seized 14 7-Eleven stores on Long Island and in Virginia, arresting nine owners and managers, and seized property, including five homes.  Investigations into 40 other 7-Eleven franchises in New York City and elsewhere are ongoing.  The charges, arrests and seizures resulted from a coordinated investigation by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the Social Security Administration’s Office of the Inspector General, the New York State Police and the Suffolk County.

Through the scheme, the defendants, who as franchisees for the parent company were licensed to use 7-Eleven buildings, trademarks and Slurpee and hot dog machines, recruited more than 50 illegal immigrants and gave them identities stolen from American citizens, including children and dead people.  The defendants allegedly generated more than $182 million in proceeds from the 7-Eleven franchise stores, profits which were shared by the defendants and 7-Eleven.

According to authorities, employees worked for 100 hours a week but were paid for a fraction of that time, and were forced to live in substandard housing owned by the operators of the convenience stores.  The store managers escaped notice, some for more than a decade, because the national company, 7-Eleven Inc., which has more than 7,600 stores in the United States, did not have safeguards in place to protect its payroll system from employee fraud, the authorities said.  For example, two immigrant employees, one in New York and one in Virginia, used the same Social Security number to get paid.

There was “little to no effort to insure the integrity of their payroll system,” said Loretta E. Lynch, the United States attorney in Brooklyn, whose office helped investigate the case.

A spokesman for 7-Eleven Inc., Scott Matter, said in a statement that the company would “take aggressive actions to audit the employment status of all its franchisees’ employees” and was cooperating with federal authorities. The company, based in Dallas, is one of the largest operators of convenience stores in the world.

Federal immigration officials said the wage theft and other abuses of the workers in the 7-Eleven case were the type of violation they now treat as a priority. Vincent Picard, an ICE spokesman, said the timing of the arrests was not related to the debate in Washington.

See ICE’s News Release here.

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Alka Bahal is a Partner and the Co-Chair of the Corporate Immigration Practice of Fox Rothschild LLP.  Alka is situated in Fox Rothschild’s Roseland, New Jersey office though she practices throughout the United States and at Consulates worldwide. You can reach Alka at (973) 994-7800, or abahal@foxrothschild.com.