HIGHLAND — The April 24 arrests of eight allegedly undocumented immigrants at a Highland apartment roofing job sparked public ire in Northwest Indiana.
But lost in the heat of that fiery debate were a host of labor and immigration laws that local and federal officials say can't be ignored.
Local attorneys and protesters were quick to decry the U.S. Department of Homeland Security/Immigration and Customs Enforcement for carrying out what essentially is central to the agency’s mission under President Donald Trump’s administration. Attorneys called the roundup unnecessary and an overreach.
Now Region labor officials question why other responsible parties for the hiring of illegal immigrants have faced no repercussions.
ICE spokesman Shawn Neudauer said the U.S. Marshals Service, the lead agency, had targeted only one person for failing to register as a sex offender, but ICE — in assisting the marshals — ultimately arrested seven others at the job site on civil immigration violations.
"Why not go after the contractor?"
Dewey Pearman, executive director of the Construction Advancement Foundation of Northwest Indiana, questioned why Homeland Security agents arrested the workers but appear to not have equally targeted the contractor or subcontractor responsible for hiring and paying the undocumented immigrants.
“When I saw the article, my first question was, ‘Why isn’t somebody not knocking on the door of the contractor, asking for certified payroll information, asking how they get paid?’" Pearman said. "I almost guarantee there is zero possibility that these individuals are being paid as they should be."
Pearman added: “I am not critical of the workers. They have to do what they need to do to feed their families. They work very, very hard. It’s the employers that are committing a crime.”
In response to The Times inquiry, Neudauer said DHS could not comment or confirm the existence of an investigation, per department policy. However, he did say he would not classify the April arrests as a “worksite-related case."
In such cases, possible sanctions for violating U.S. labor laws and U.S. criminal codes “can range from a simple warning, to administrative fines, to criminal prosecution of both the business and owners/managers, and can even involve debarring a business or person from doing business with the U.S. permanently,” Neudauer said.
Payroll fraud, an unfair advantage?
Pearman said he believes the practice of contractors hiring undocumented immigrants and committing payroll fraud is a glaring, but often ignored, issue in the Region and the rest of the country. He said it has a ripple effect on union contractors.
The Construction Advancement Foundation, a contractors' association, represents about 600 men and women in the Northwest Indiana market, he added.
“All are union employers. When (payroll fraud) happens, it becomes impossible for the honest contractor to compete for the work — because in fraud, the contractor paying under the table is saving 30 to 40 percent of labor costs by not paying Social Security, unemployment insurance, workers comp insurance and other payroll taxes,” he said.
“So right out of the gate, the contractor has a 30 to 40 percent bidding advantage over honest contractors."
Neudauer said Homeland Security worksite investigations seek to gain compliance from businesses. He said they also seek an equal setting for all businesses, trying to prevent unfair or illegal advantages.
“The goal isn’t to put them out of business. It certainly is an option for egregious violators who are knowingly hiring illegal aliens, but is not usually the point of a routine investigation,” Neudauer said.
Property manager: Workers were 'outside hire'
Officials with the Hampton in Highland Apartments, where the arrests took place, declined to provide the name of the contractor hired for the roofing job. But a statement was provided to The Times on behalf of property manager Sandra Barber.
“Hampton in Highland did not participate in the recent arrests at our property, nor did we have any prior knowledge of law enforcement plans. The men arrested were not our employees. They worked for an outside contractor that was replacing a roof on our building,” the statement read. “We are saddened for the separation of anyone’s family, but we understand there are laws that must be followed.”
According to a source with knowledge of the April 24 arrests, Pro-Tech Roofing Inc., of Des Plaines, Illinois, was the roofing company hired by Hampton in Highland Apartments, and Pro-Tech hired a subcontractor — the Chicago-based A M Brothers Roofing & Siding Inc.
Phone calls placed with the contractor and subcontractor went unanswered last week.
According to the U.S. Marshals Service, the target of the April 24 investigation was a 41-year-old man wanted in Illinois for failing to register as a sex offender. The agency declined to provide the suspect’s name, citing an ongoing investigation.
The Times filed a records request on April 25 with DHS/ICE for the names of other individuals arrested on charges of civil immigration violations.
Pearman: More enforcement needed
While it’s unclear if it happened here, Pearman said it is “very common” for a general contractor to hire a subcontractor “knowing full well the subcontractor is going to commit fraud.”
Pearman said during this past January legislative session, his organization pushed for and supported Senate Bill 305, which would have required the Department of Labor, along with the Department of State Revenue and the Worker’s Compensation Board, to share instances of construction contractors paying workers in cash.
The bill also would have established a payroll fraud task force responsible for investigating suspected instances of payroll fraud, employee misclassification and violations of other state labor and employment statutes occurring on commercial and industrial construction projects.
He said he and others have been advocating for a more coordinated approach against such illegal practices for years, but SB 305 failed to get off the ground, he said.
Any form of inducement on the part of a business/owner/manager to get an unauthorized alien to remain or work in the U.S. is a felony, Neudauer said.
The specific statute violated tends to involve Title 8 U.S. Code 1324 — illegal hiring, harboring, transporting of aliens not authorized to work in the U.S., he added.
Harboring undocumented workers
Ryan Holmes, a spokesman for the U.S. Attorney’s Office for the Northern District of Indiana, said while he is unable to comment on this particular case or any Department of Justice investigation, generally speaking, employers who harbor undocumented immigrants for commercial gain can face a 10-year prison penalty.
In a 2012 federal case, prosecutors alleged Michael McClellan, co-owner of the now-shuttered Paragon Restaurant in Schererville, harbored illegal immigrants at Paragon as well as at a home he owned behind the restaurant.
McClellan and his wife, Tina McClellan, were indicted in November 2012 on federal charges of harboring illegal aliens working at their restaurant and also for making false claims to the state of Illinois over the number of children who attended T&M Daycare in Calumet City.
In 2014, Michael McClellan was sentenced to 51 months in federal prison and ordered to pay restitution in the amount of $203,844 to the state of Illinois. Tina McClellan, 38, convicted of one count of money laundering, was sentenced to one year home confinement and is jointly responsible for the restitution.
Janco president indicted after ICE raid
In 2007, more than 50 ICE agents raided the Janco Composites factory in Mishawaka, Indiana, where they ultimately arrested 36 suspected undocumented immigrants.
Two years later, the U.S. Attorney’s Office for the Northern District of Indiana indicted company President Douglas L. Jaques on allegations he had a pattern of hiring undocumented immigrants despite knowing they were in the country illegally, court records show.
For years, Janco allegedly ignored “No Match” letters from the Social Security Administration, which explained that a list of Social Security numbers reported on Janco’s W-2 did not agree with government records and directed Janco to provide corrected information.
The indictment alleged Janco Composites shielded workers from detection for commercial gain. In 2009, Jaques pleaded guilty to continuously employing undocumented immigrants at Janco and was ordered to serve one year probation and pay a $30,000 fine.