Northern California company to pay $1.5 million following ICE worksite probe

SACRAMENTO, Calif. – A northern California natural food company has agreed to pay $1.5 million and establish a corporate compliance program under a non-prosecution agreement reached with the United States Attorney’s Office for the Eastern District of California, following a probe by U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) into potential criminal hiring violations.

According to the agreement, in March 2012, HSI audited employee I-9 immigration forms at Mary’s Gone Crackers Inc., based in Gridley. Later, in May 2012, HSI notified the company that 49 of its employees appeared not to be authorized to work in the U.S. After one employee provided corrected documentation, Mary’s Gone Crackers informed ICE the other 48 had resigned or been terminated. Within less than a month, however, the firm had rehired at least 13 of those employees under new names. One of them, an operations supervisor, never stopped working for the company. Instead, the individual continued to work under an assumed name, receiving payment as an independent contractor, rather than through the company’s regular payroll. When HSI special agents executed a search warrant at the company’s Gridley facility in January 2013 at least 12 of the 13 rehired individuals were still working there.

According to the agreement, during the course of HSI’s I-9 audit, Mary’s Gone Crackers occasionally consulted with an outside counsel from the Chico area. After the execution of the search warrant, the firm cooperated with the investigation and took remedial measures, including terminating employees, stopping the use of the outside counsel, and taking other steps to ensure compliance with immigration laws, including using E-Verify and the Social Security Verification Service. The company also established an anonymous tip line so employees could raise any potential I-9 issues.

Under the non-prosecution agreement, Mary’s Gone Crackers must establish a corporate compliance program covering its I-9 procedures and its use of the E-Verify system. The agreement further requires the firm to provide timely and complete disclosure of any violation of immigration laws or regulations within 24 hours of discovery. Additionally, the agreement requires Mary’s Gone Crackers to provide compliance reporting to the U.S. Attorney’s Office for two years. No federal criminal charges will be brought against Mary’s Gone Crackers for the investigated conduct if the company complies with the terms of the non-prosecution agreement. The agreement is only between the government and the company, and does not pertain to specific individuals.

The government was represented by Assistant United States Attorney Christopher S. Hales.