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Shipley Do-Nut chief pleads guilty in immigration case

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Shipley Do-Nut chief pleads guilty in immigration case

By JAMES PINKERTON and SUSAN CARROLL 2008 Houston Chronicle

Aug. 28, 2008, 10:41PM

The sudden guilty plea to charges of hiring illegal immigrants by the president of Shipley Do-Nuts — one of Houston's most well-known institutions — is likely to send a strong message to employers about the pitfalls of hiring undocumented workers.

And that's exactly what Justice Department prosecutors and local immigration officials are counting on.

On Thursday, prosecutors announced that Lawrence Shipley III — the grandson of Shipley Do-Nuts' founder — was placed on probation for six months and fined $6,000 after pleading to a misdemeanor charge of allowing illegal immigrants to be hired.

Three Shipley managers were also charged Thursday for employing undocumented workers.

Next week, the doughnut company itself is scheduled to enter a guilty plea to a felony conspiracy charge and could be fined up to $500,000.

The charges stem from an April 16 raid at the Shipley complex in Houston, where Immigration and Customs Enforcement agents detained 20 undocumented workers.

''With Shipley Do-Nut being such a well-known hometown company, it is hoped the prosecution of the corporation, and Lawrence Shipley III and his current and former managers, will have other Houston employers thinking twice about hiring illegal aliens," said Robert Rutt, the agent in charge of ICE criminal investigations in Houston.

Houston experts on immigration law had varied opinions on the effect of the prosecution.

"This is the same deterrent value as putting one cop car out on the HOV coming out from Katy once a month," said Michael A. Olivas, a University of Houston expert on immigration law and policy. "It's going to have deterrent value and symbolic value — that's the point."

Criminal instead of civil

Charles Foster, a Houston immigration attorney with the firm Tindall & Foster, said the lesson of the Shipley case is clear.

"Employers can no longer assume the government will treat these immigration violations as civil penalties," Foster said.

He chairs the immigration project of the Greater Houston Partnership, the business chamber that has launched a lobbying effort to persuade Congress to reform the nation's immigration system.

"The new enforcement strategy is to focus on employers and, to the extent possible, to seek criminal penalties first and then civil penalties," Foster said. ''The rationale for that is very clear. Just like the IRS discovered, they get more bang for a dollar by going after criminal penalties. They will get the attention of other employers."

In the last two years, federal officials have been criticized for focusing on arresting undocumented workers but not penalizing more employers.

U.S. Attorney Donald DeGabrielle, who announced the charges against Shipley, promised a continued crackdown on businesses that provide a magnet for immigrants to enter the country illegally.

''One of the main and root causes that people are risking their lives and liberty to come into this country is because there are employers who are willing to hire people that are coming here illegally," DeGabrielle said.

One concession Shipley made in the plea agreement may have the most symbolic value of all: The company agreed to revise its hiring practices.

DeGabrielle said the firm, starting soon after the ICE raid, upgraded its immigration compliance program and hired a consultant to comply with employment regulations.

Federal prosecution of the company — which has acknowledged using illegal immigrants since 1994 — would have been more severe without this change, DeGabrielle said.

The doughnut chain has deep roots in Houston, where it was founded in 1936. Over the decades, Shipley has grown to nearly 90 shops in Houston, while opening 100 locations in five other states.

Managers charged

On Thursday, criminal charges of hiring undocumented workers were brought against Christopher Halsey, 36, Shipley's warehouse supervisor, and Julian Garcia, 38, the warehouse manager.

Charges were also lodged against ex-warehouse manager Jimmy Rivera, 54, who supervised undocumented workers as they performed chores on Lawrence Shipley's ranch outside Houston, the plea agreement states.

Company officials have also agreed to give the government $1.3 million to keep from forfeiting nine residences owned by Shipley Properties that were used to house illegal immigrants and their families at the company's four-block complex at 5200 N. Main, prosecutors said.

U.S. District Judge Ewing Werlein Jr. postponed until Sept. 5 the guilty plea from the Shipley corporation because attorneys did not bring resolutions by the board of directors authorizing Lawrence Shipley III to do so.

''We can't comment," Shipley said as he left the courtroom. ''The case is still before the bench."

He took over management of Shipley Do-Nuts in March 2005, after the death of his father, Lawrence ''Bud" Shipley Jr. According to the plea agreement, Lawrence Shipley III had ''very little to do with the day to day operation" of the company until then.

''I think a lot of these people worked there for many years," said Dennis Cain, a Houston attorney representing Shipley, and referring to undocumented workers. ''Mr. Shipley has been out there at the business for two years since his father passed away."

However, the government's plea agreement included a number of indications that company officials were aware much of their work force was not authorized. In 2006, the Social Security Administration notified the company that 100 Social Security numbers submitted for workers did not match with any accounts.

Olivas questioned claims of ignorance by employers, saying: "This is like Claude Rains in Casablanca being shocked at the gambling going on in Rick's Cafe. It wasn't as if Shipley and the others didn't know about this."

During the April raid, ICE agents detained 20 Shipley workers and released seven for humanitarian reasons.

Since then, more than a dozen have qualified for immigration bonds while they contest their immigration charges, and others have been deported. Two workers were able to gain legal status.


"Credibility in immigration policy can be summed up in one sentence: Those who should get in, get in; those who should be kept out, are kept out; and those who should not be here will be required to leave."

"...for the system to be credible, people actually have to be deported at the end of the process."

US Congresswoman Barbara Jordan (D-TX)

Testimony to the House Immigration Subcommittee, February 24, 1995

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finally a new posting .... was getting bored of all the resurrecting and rehashing of old threads

As I said previously...with nearly half a million illegal aliens in the Houston area, there is no shortage of illegal alien stories. When you have a community that is based on illegality, its just a matter of time before their capers hit the headlines. And they do nearly every day.

"Credibility in immigration policy can be summed up in one sentence: Those who should get in, get in; those who should be kept out, are kept out; and those who should not be here will be required to leave."

"...for the system to be credible, people actually have to be deported at the end of the process."

US Congresswoman Barbara Jordan (D-TX)

Testimony to the House Immigration Subcommittee, February 24, 1995

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