By MICHAEL HEDGES and MÓNICA GUZMÁN
Copyright 2006 Houston Chronicle

WASHINGTON - Federal officials warned businesses of an expanding crackdown on the employment of illegal immigrants Thursday as agents completed what was called the largest workplace immigration raids in national history, targeting a company with U.S. headquarters in Houston.

"History shows that there are large companies that operate with a business model that relies to a significant extent on undocumented illegal labor," Department of Homeland Security chief Michael Chertoff said. "I can tell you that we are continuing to investigate other companies as we speak here today."

The raids in 26 states began Wednesday, hitting 40 work sites of the U.S. subsidiary of a Dutch company. More than a thousand workers were arrested by Thursday, along with a few executives.

Chertoff said IFCO Systems, an industrial pallet manufacturer, had been under investigation for more than a year, after federal agents were tipped to what he described as a systematic plan to increase profits by hiring and exploiting illegal workers.

The investigation began, according to an agents' affidavit, when a worker at an IFCO plant in New York witnessed Hispanic employees tearing up IRS W-2 forms; he supposedly was told by a company manager that the workers were illegal immigrants with fake Social Security cards who would not be put on federal tax rolls.

As the case developed, agents uncovered a system of gathering illegal workers in Houston and sending them by bus to New York to work at an IFCO plant there, officials said.

The company said it was cooperating fully with the federal investigation and that it hoped to "have this matter resolved as soon as possible."

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