November 7, 2008

Boston Military Goods Manufacturing Company Pleads to Harboring and Mail Fraud

On November 3, 2008, New Bedford manufacturer , Michael Bianco Inc. (“MBI”), , pled guilty along with its president to various charges alleging that they hired illegal aliens, helped to shield them from detection, failed to pay them full overtime, and fraudulently misled the government, all in an effort to maximize profits on a series of lucrative military contracts. The company had been awarded almost $230 million in government contracts over the past five years. In March of 2007 Immigration and Customs Enforcement (ICE) Agents raided MBI after a worksite investigation that initially began in 2006.

The company had specialized in the manufacture of handbags and leather goods until it transitioned into a military goods manufacturing company in 2001. Francesco Insolia, the president of MBI has agreed to pay a fine and serve up to 18 months in jail under terms of a plea agreement to settle charges stemming from the March 2007 raid. Insolia and two other managers were arrested and charged with numerous violations of federal and criminal law and the Immigration and Nationality Act. The three were subsequently indicted by a grand jury on charges of conspiracy to harbor and hire illegal aliens.

On November 3, 2008, MBI pled guilty to 18 counts of knowingly hiring illegal aliens helping to harbor and shield illegal aliens from detection from authorities from 2004 to 2007, failing to pay employees overtime from 2005 to 2007, fraudulently misrepresenting Social Security numbers, and committing mail fraud when it submitted Social Security numbers to the Social Security Administration and Internal Revenue Service knowing that many of the numbers had to be false. MBI has agreed to pay a fine of approximately $1.5 million and to pay approximately $460,000 in restitution for the overtime owed to employees.

While these actions seem to follow the worksite enforcement plan of the administration what is most interesting in the case is the mail fraud charge, which seems to be ICE’s newest addition to the litany of charges levied against employers. Until this case ICE had not pursued this angle against employers. It is an interesting development that GT will continue to monitor carefully in the context of other ICE investigations.