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11th Circuit: Felony Convictions for Unlawful Employment Upheld 

10/26/2007  By Michael G. Sherrard 

10/26/07 2:46 PM

11th Circuit: Knowingly Employing Illegal Immigrants Is Not Mere Misdemeanor

By Michael G. Sherrard

Employing individuals known to be illegal immigrants may expose a business owner or a manager to criminal conviction on the basis that he or she encouraged or induced the illegal immigrants to reside in the United States or concealed or harbored them; felonies that attract significant terms of imprisonment, an 11th U.S. Circuit Court of Appealsdecision shows.

Saleem Khanani was the part owner of a group of retail stores in Florida. David Portlock was an accountant who worked as a comptroller for Khanani and his companies. Both were charged with offences relating to the employment of persons who were not authorized to work in the United States, the establishment and use of fraudulent “front” companies to launder money to pay the illegal immigrants, and the related failures to pay state and federal taxes.

After a trial both defendants were convicted on charges of:

    • Knowingly encouraging and inducing illegal immigrants to reside in the United States.

    • Participating in a conspiracy to conceal, harbor and shield these workers from detection.

    • Mailing and e-mailing fraudulent state and federal tax forms.

    • Participating in a conspiracy to launder the proceeds of crimes.

    • Evading federal employment and income taxes.

The defendants’ first ground of appeal focused on the first two categories of charges. They argued that those convictions ought to be overturned because the jury should have been instructed that the employment of illegal immigrants in and of itself does not constitute encouragement or harboring. That is, they argued that they had merely employed the illegal immigrants, which at most should have constituted a misdemeanor under a separate provision of immigration laws, in contrast to the felony offences of encouragement and harboring with which they were charged and convicted.

The court rejected the defendants’ argument, holding that the trial judge had correctly instructed the jury that it must find the defendants to have acted “knowingly” or “with reckless disregard” to convict them of the offences.

The defendants’ second ground of appeal took aim at the evidence obtained from the searches of the defendants’ computers. Portlock argued that the seizure of his computers was without probable cause because the affidavit submitted to obtain the warrant provided no fact-specific reason to believe there were computers in his office, or that his computers had been used to facilitate the commission of any crime.

Portlock’s argument failed. The court held that the following facts were sufficient to bring the computers within the scope of the search warrant:

    • Portlock was one of the defendants’ accountants.

    • Tax returns, which were presumably computer-generated, were found.

    • A federal agent had entered Portlock’s office and observed connected computers.

On all counts, the defendants’ convictions were upheld. Khanani was sentenced to 70 months of imprisonment and Portlock to 48 months of imprisonment.

United States v. Khanani , 11th Cir., No. 05-11689 & 05-15014 (Oct. 2, 2007).

Professional Pointer: This case is a reminder that an employer, whether for compassionate reasons or for the purpose of giving its business a competitive edge, that knowingly employs an undocumented worker does so at the risk of serious personal liability and penal consequences. The fact that an employer suspected, but did not know with certainty, that an employee or job candidate lacked authorization to live and work in the United States is no defense. In such a case, an employer may be found to have been wilfully blind or reckless as to the status of the employee or job candidate. Furthermore, an individual (such as the accountant in this case) who is privy to relevant information and participates in a scheme to employ an undocumented worker and/or cover up his or her employment is not immune from criminal liability, even if the individual is a mere employee.

Michael G. Sherrard is a partner in the firm of Sherrard Kuzz LLP, the Worklaw® Networkfirm in Toronto.

Related Articles:

Challenged No-Match Rule Followed To Fend Off Criminal Prosecution , SHRM Online Workplace Focus Area, Sept. 10, 2007

Amplified INA Enforcement Is Wake-Up Call for Training , SHRM Legal Report, December 2006

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Editor’s Note: This article should not be construed as legal advice.

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