‘Modern-day plantation system,’ authorities say after 7-Eleven raids

Published Jun 18, 2013 at 05:00AM

More than a dozen 7-Eleven franchises took in more than $180 million in revenue by running a “modern-day plantation system,” prosecutors in New York charged on Monday, built on the unpaid labor of dozens of illegal immigrants hired using sham Social Security numbers.

Federal authorities seized 14 7-Eleven stores on Long Island, N.Y., and in Virginia, arresting nine owners and managers, and seized property, including five homes. They are investigating 40 other 7-Eleven franchises in New York City and elsewhere in one of the largest criminal immigrant employment investigations ever conducted by the Justice and Homeland Security Departments, officials said.

Through the scheme, the defendants, who as franchisees for the parent company were licensed to use 7-Eleven buildings, trademarks and Slurpee and hot dog machines, recruited more than 50 illegal immigrants and gave them identities stolen from U.S. citizens, including children and dead people.

The employees worked for 100 hours a week but were paid for a fraction of that time and were forced to live in substandard housing owned by the operators of the convenience stores, the authorities said.

The store managers escaped notice, some for more than a decade, because the national company, 7-Eleven Inc., which has more than 7,600 stores in the U.S., did not have safeguards in place to protect its payroll system from employee fraud, the authorities said. For example, two immigrant employees, one in New York and one in Virginia, used the same Social Security number to get paid.

There was “little to no effort to ensure the integrity of their payroll system,” said Loretta Lynch, the U.S. attorney in Brooklyn, whose office helped investigate the case.

A spokesman for 7-Eleven Inc., Scott Matter, said in a statement that the company would “take aggressive actions to audit the employment status of all its franchisees’ employees” and was cooperating with federal authorities. The company, based in Dallas, is one of the largest operators of convenience stores in the world.

The raids come as Congress is debating a major overhaul of the immigration system, and Obama administration officials have been called upon to defend their record on enforcement against illegal immigration to convince skeptical lawmakers, many of them Republicans, that the nation is ready to grant legal status to undocumented immigrants.