December 19, 2008 / 9:46 PM / in 10 years

UPDATE 1-IFCO U.S. unit in record illegal-worker settlement

(Adds details, reaction)

WASHINGTON, Dec 19 (Reuters) - The North American unit of pallet-services firm IFCO Systems NV IFCO.DE has agreed to a record $20.7 million corporate settlement in a probe into the hiring of illegal immigrants, the U.S. Justice Department said on Friday.

The settlement is intended to resolve a case stemming from a 2006 sweep by U.S. immigration officials on 40 IFCO pallet plants in 26 states. The raids resulted in the detention of 1,182 illegal immigrants working at the plants, the department said.

Under the agreement, IFCO acknowledges its managers and employees, several of whom have faced criminal prosecution, broke the law and accepts responsibility for their conduct, the department said.

It said IFCO managers harbored and transported illegal aliens and encouraged them to remain in the United States to work at the pallet plants. Some 6,000 illegal workers were employed at the plants over three years, it said. It called the agreement “the largest corporate settlement in a work-site enforcement case to date.”

The settlement includes $18.1 million in civil forfeitures and $2.6 million on back pay for workers and penalties for overtime violations.

IFCO, which is based in the Netherlands and whose shares trade on the German stock market, said in a statement the settlement removes the possibility of any criminal charges against the company itself. The company said it had enrolled in a U.S. electronic employment eligibility system, restructured management to better oversee hiring and taken other steps.

“Over the last 32 months, we at IFCO have significantly upgraded our compliance procedures to go well beyond what the law requires, so that today I am confident that IFCO is the most compliant company in the industry,” said Dave Russell, president of the Houston-based North American unit. (Reporting by Randall Mikkelsen; Editing by Andre Grenon)

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