March 7, 2003

Iowa immigrant case puts RICO law to new use

BY CHRIS CLAYTON

WORLD-HERALD STAFF WRITER

Reaching into immigration employment violations is the latest way federal authorities are stretching a federal racketeering law into new areas of criminal prosecution.

Created in 1970 to target organized crime, the Racketeer Influenced and Corrupt Organizations Act continues to be used in new ways to prosecute or sue.

Going after companies that employ illegal immigrants is the latest incarnation of the law, as seen this week in a north-central Iowa case that led a man to agree to a $300,000 cash forfeiture.

"That's an interesting use of the provision," said Renata Lawson Mack, a criminal law professor at Creighton University. "Apparently, that's given the government an entirely new weapon."

Asset seizure became a big part of the act because federal authorities hoped to leave criminals broke. Houses, cars, cash and business assets can all be taken away.

"The person can be forced to forfeit almost anything related to the criminal activity," Mack said.

The penalties can be huge, which often leads federal prosecutors and plaintiffs' attorneys to stretch the scope of the law. It was written broadly, which gives it a lot of room for expansion, Mack said. The law now is seldom used for its original purpose.

"Almost every prosecution today involves something other than organized crime," Mack said.

Iowa farm businessman John Glessner Jr. agreed this week to at least a $300,000 forfeiture in Sioux City's federal district court rather than take a chance in challenging a RICO charge.

Lawyer William Smith of Des Moines said his client could have ended up losing a $20 million chicken facility had a judge decided that the facility was part of a criminal enterprise Glessner used to employ undocumented workers.

That made it a no-brainer to reach a civil settlement, he said.

"No one really knows, so we can't tell our clients for certain what (the government) could take," Smith said.

Immigration came into play for RICO after 1996, when Congress expanded the act to deal with immigration related to terrorism. Changes made it possible to charge someone with a felony for employing an undocumented worker and opened up the door for RICO violations.

Officials with the Bureau of Immigration and Customs Enforcement could not say Thursday whether any other companies have paid forfeitures under the law for employing undocumented workers. Glessner's attorney said it was a new angle for prosecution.

"There's very little case law on this," Smith said.

RICO is becoming popular for lawsuits because damages can be triple the amount of other claims. Lawsuits that once were handled in state courts are now finding their way onto federal dockets.

People who think they have been harmed by someone engaged in a pattern of crime also can sue, and there is more case law involving companies suing each other because they think their competitors have gained unfair advantages by using undocumented workers.

Right now, companies in a variety of industries are closely watching the Tyson Foods prosecution under RICO. Tyson rejected a $100 million settlement offer from the federal government, but the company could potentially lose some of its processing plants to forfeiture if convicted. Glessner's attorney, Smith, said that might force Congress to step in and tighten the law.

"I tend to believe there will be some tinkering if you have some high-profile multimillion-dollar forfeitures for employment violations," Smith said. "Others might say it's doing exactly what it's supposed to do."