The market for cheap labor is obvious to anyone who passes a parking lot on the corner of Ashley Phosphate and Stall roads in North Charleston.
Dozens of Latinos, sometimes 100 or more, gather almost daily, waiting for a homeowner or a contractor to offer them work.
Ramon, 34, and Jorge, 49, agreed to talk about what their lives are like as long as their last names were withheld. Nearly all of the men in the parking lot are illegal immigrants, they say.
Both worked elsewhere in the country before moving to the Lowcountry, in part because of the demand for workers and South Carolina's reputation for lax immigration enforcement.
Unfortunately, the two men say, work offers are down from just a few months ago, and the number waiting in the lot grows daily. "More people, less jobs," Jorge said.
Ramon said that of those gathered on any day, only 15 or 20 will get a job. Still, the lure is strong because of the money and the hope of getting a job that could last weeks or maybe longer.
In Mexico, Jorge said, he would be lucky to earn $4 to $5 a day. In South Carolina, he can get nearly double that in an hour. With those wages, Ramon said, he plans to work another year and then return to his wife and three children.
Robert Rodriguez, an assistant special agent in charge at U.S. Immigration and Customs Enforcement in Atlanta, said South Carolina has one of the fastest growing populations of illegal immigrants because jobs are a big magnet.
As money and jobs continue to draw illegal immigrants, and the national drumbeat to crack down on them intensifies, one civil case illustrates how federal regulators have done little to dismantle the economic infrastructure that encourages this illicit industry to thrive.
More than 1,000 pages of court documents filed in a settled lawsuit against L&L Services, a labor company that generated millions of dollars each year operating almost exclusively with illegal immigrant labor, provides a window into the operation of the underground economy.
Whether other L&Ls continue to feed the Charleston labor market with illegal immigrants is unknown. Federal
prosecutors would say only that a number of investigations are under way on different employers around the state.
John Massalon, the attorney for L&L Services' owner, Lawton Limehouse, said his client had no comment for this story.
A review of the case by The Post and Courier exposes a failure of federal agencies to deal with illegal immigrants in a systemic way. The case reveals loopholes in immigration law, a lack of communication among agencies and a legal system that makes it harder to prosecute businesses than workers, holes authorities concede remain today.
More than three years after federal agents raided the home of L&L Services' owner, officials say the criminal case remains active, though no charges have been filed. "It remains an open and ongoing investigation," said Assistant U.S. Attorney Kevin McDonald. "That's about all I can tell you."
Still, the court records in the civil case paint what one attorney involved described as a road map for prosecution. Hundreds of Social Security numbers included in the case files and examined by the newspaper show that illegal immigrants were nearly all of the company's workforce, many using the same numbers as actual citizens.
Court records also show that L&L was alerted by the federal government on many occasions about problems with workers' Social Security numbers. In 2004, documents show the government told L&L that about 300 of its workers' names and Social Security numbers didn't match federal records.
Records also reveal that on several occasions, a company bookkeeper called the Social Security Administration to voice her concerns about what she believed could be bogus Social Security numbers. L&L Services' owner admitted in a deposition to using workers he knew were smuggled into the country by coyotes, a slang term used to describe those who smuggle people for a price.
South Carolina lawmakers, who are considering numerous laws aimed at tightening the screws on illegal immigration, have cited a lack of meaningful investigations and prosecutions by federal agencies as one of the driving reasons behind the state's efforts.
South Carolina Senate President Pro Tem Glenn McConnell, a Charleston Republican, said businesses that knowingly hire illegal immigrants should be prosecuted.
"There is a power failure in Washington," he said. "They have not devoted enough resources and manpower to vigorously enforce the laws and pursue the case against illegal immigration. The result is that the state is getting stuck with the bill."
Profiting on illegals
L&L Services began operating in 1999. It specialized in providing workers for menial jobs, ranging from washing dishes at high-profile restaurants such as McCrady's to grooming golf courses on Kiawah Island. Initially, the company hired mostly Latinos, utilizing the government's H-2B temporary visa program designed to bring in foreign workers.
After a year, records show, L&L stopped using government-sponsored workers and began hiring locally, often recruiting family members of existing workers.
The company quickly grew, supplying laborers to nearly 250 local businesses and individuals. Those businesses typically paid L&L $10 per hour for each worker. The company normally kept $4 and paid workers $6. The company's gross revenue ballooned to $3.1 million by 2002, tax returns show.
In 2004, North Charleston building inspectors discovered nearly two dozen workers crammed into a company-run house off Dorchester Road, including five men in an outdoor storage shed. The business closed amid the scrutiny.
Workers filed a federal lawsuit accusing the company of exploitation, failing to pay overtime and in some cases selling fake green cards and Social Security cards for $120. The case was settled in September 2006 for an undisclosed sum. Records from that case are the basis for the newspaper's analysis.
The Post and Courier analyzed the Social Security numbers of 219 former L&L Services employees that were listed in the civil court records. Of those, only two workers had Social Security numbers that matched their name. Half of the workers had numbers linked to other people. Dozens of others used Social Security numbers that the federal government had not issued. Twenty-two of the Social Security numbers belonged to dead people.
In a 2004 interview with The Post and Courier, company owner Limehouse said all his employees were in the country legally. But in June 2005 Limehouse testified in a deposition for the civil case that some of his workers were smuggled in by coyotes.
The company did not pay the coyotes directly, Limehouse testified in the deposition taken by attorney Paul Hulsey, who represented the workers. But he said the company did at times advance workers money to live on after they paid the coyotes:
Hulsey: So from time to time, you had coyotes bring people in, but the financial arrangements were between the worker and the coyote, right?
Hulsey: But the coyote situation was at least known to you, and it wasn't an infrequent situation?
Limehouse: Well, I knew people brought people to us, yes.
Civil court records show that L&L Services popped up on the Social Security Administration's radar on multiple occasions because of problems with workers' Social Security numbers. The agency sent the company "no-match" letters, form letters sent out annually notifying a business that a worker's name and number don't match federal records.
The letters often are a first sign for a business of possible problems with a worker's immigration status. On
March 27, 2004, the Social Security Administration sent L&L about 300 no-match letters, accounting for more than $1.3 million in reported earnings the company paid to workers in 2003.
Limehouse testified in a deposition that at the end of each year his company got "a pile" of no-match letters. Normally many of the workers had moved on, so there wasn't anything to do, he testified. The rest he told to call the Social Security Administration and work it out.
In addition Limehouse testified that he never replied to the Social Security Administration's yearly inquiries, a response that seemed to surprise attorney Hulsey.
Hulsey: So if the Social Security Department asked about a Social Security number, what, if anything, did you do?
Hulsey, who represented L&L Services workers free of charge, said his firm discovered in its investigation that L&L Services at times simply changed a worker's Social Security number by one digit and re-filed the number the next year.
"The system is absolutely broken," he said. "If you want to know how does this happen in a given business environment, look at this case. How can you do it and get away with it?"
Loopholes in the law
Since 2004, when L&L Services shut down, the government has made some strides in cracking down on illegal immigration, but experts say many loopholes still exist, agencies don't cooperate and investigations and prosecutions are inconsistent.
Mark Lassiter, press officer for the Social Security Administration, said immigration enforcement is the job of the Department of Homeland Security, not the Social Security Administration.
He said also that even if the agency generates a large quantity of no-match letters for a particular business, as with L&L Services, it is forbidden by law from sharing that information with other federal agencies, including immigration, because the information comes from the Internal Revenue Service's W2 forms and is protected under federal privacy laws. "The Social Security Administration has no enforcement authority," Lassiter said.
This year, the Department of Homeland Security, which oversees immigration and customs enforcement, planned to start attaching its own letter to no-match letters. It would alert businesses that failing to respond to the letters within 90 days is grounds for assuming a company knowingly hired illegal immigrants.
A federal judge issued a restraining order recently blocking the letters as part of a lawsuit filed by the American Federation of Labor and Congress of Industrial Organizations, the American Civil Liberties Union and the National Immigration Law Center, which argued it was unfair to workers and a burden to employers.
Laura Keehner, a press officer with the Department of Homeland Security, said the judge's ruling was a disappointment. Legitimate reasons do sometimes prompt no-match letters, such as a married woman who changes her name. Still, Keehner said, the majority of businesses that get no-match letters are companies hiring illegals immigrants.
"For those employers who have piles of no-match letters, that is a large problem," Keehner said. "That is one of the reasons why the immigrants are staying in this country. There is an economic draw."
The Social Security Administration isn't the only federal agency to take a look at L&L Services. In 2004, after L&L workers complained publicly of working as many as 80 hours a week without overtime, the U.S. Department of Labor launched an investigation.
One of the illegal immigrants, Maximino Flores, said in an affidavit filed in the civil case that he and others routinely were cheated out of wages. "During the time that I worked for L&L Services there were numerous occasions that I was not paid for hours or overtime that I worked," he testified. "Typically I would not be paid for between five and 15 hours or more per week."
Labor Department regulators pored through the company's books and determined that L&L failed to pay more than 22,000 hours of overtime to more than 200 workers. It ordered the company to pay $66,485 in back wages.
The notes from the Labor Department's investigation are contained in civil court records, including a list of 219 Social Security numbers used by workers who ultimately were owed back wages. These are the same numbers the newspaper determined are mostly bogus or don't belong to L&L Services workers.
In 1998, the Labor Department and immigration authorities struck a deal to refer cases to one another. But there's a catch: While labor investigators are expected to refer cases involving companies that have knowingly hired or continue to employ illegal immigrants, they are barred from making any inquiry about workers' immigration status.
Michael Wald, the Labor Department's deputy regional director for public affairs, said his agency focuses on determining who is owed money.
"We don't check Social Security numbers. We don't actually run them to see if they are bogus," Wald said. "It would have to come up in some other way. You have to use your imagination. Maybe in the course of a conversation."
Tough to prosecute
Steven Camarota, director of research for the Washington-based Center for Immigration Studies, said most cases involving businesses that game the system involve small to midsize companies. Larger companies, he said, tend to have professional human resources employees who know the laws.
Enforcement has picked up some in recent years as the issue has become a political lightning rod, but Camarota said it still isn't what it should be. "The system is so lax," said Camarota, whose organization advocates for increased immigration enforcement. "There are, according to the Department of Homeland Security, a quarter million people working on a Social Security number made up of all zeros."
When agents do go after immigration violations, investigators and prosecutors often focus on workers, not the businesses, in part because the laws are stacked against them, officials say.
In the last five years, a review of case statistics shows that most of the roughly 950 immigration-related cases prosecuted by the U.S. Attorney's Office in South Carolina have involved immigrants caught here illegally or caught using false documents, such as green cards and Social Security cards.
McDonald, the assistant U.S. attorney, said it is easier to prosecute a worker caught with fake documents because there is a narrow set of facts. Prosecuting a business is more difficult because the law requires only that a company owner see a worker's document. There is no requirement to verify whether the document is legitimate.
Experts say that loophole lets employers do as little as possible to verify workers' documents. It also offers an easy shield against prosecution. A business owner can simply claim not to be a document expert and unable to distinguish what is or isn't a valid document.
As a result, prosecutors must be creative and pursue other charges, such as conspiracy charges. In an Ohio case last year, federal authorities charged a temporary employment agency in part for lying to its clients and stating that its employees were legally allowed to work.
The problem of hiring illegal immigrants didn't disappear when L&L Services shut its doors. McDonald said the U.S. Attorney's Office is working with investigators on a number of other employer-related cases, though he said he could not disclose any information about them.
"This area is an important area," McDonald said of efforts to crack down on employers who knowingly hire illegal immigrants. "It is one that is not lost upon our office."
Still, some experts argue that politics also plays a role.
Monica Guizar, an employment policy attorney with the National Immigration Law Center, which tries to protect the interests of immigrants, said by targeting workers, lawmakers and agencies controlled by political appointees can appear tough on immigration without punishing voters and political donors who profit from cheap labor.
"While the administration and the agency and the government may claim that the target is employers who knowingly hire undocumented workers, what we are actually seeing is that they are ignoring employers' criminal violations and going out and arresting and detaining workers and pressing criminal charges against them," Guizar said. "The employers are getting off scot-free."