updated 12/14/2006 7:30:37 PM ET 2006-12-15T00:30:37

A Southern California fence-building company and two executives pleaded guilty Thursday to knowingly hiring illegal immigrants and agreed to pay a combined penalty of $5 million. The executives could also go to prison.

The penalty is one of the biggest fines ever imposed in an immigration case, and the case represents a rare instance in which prosecutors brought criminal charges over the hiring of illegal immigrants.

Golden State Fence Co. will pay $4.7 million. Mel Kay, 64, the company’s founder, chairman and president, will forfeit $200,000, and Michael McLaughlin, 42, a manager in the company’s Oceanside office, will pay $100,000.

The two men admitted hiring at least 10 illegal immigrants.

“People slip through the cracks and that’s what happens. Mistakes were made,” Richard Hirsch, an attorney for Golden State and Kay.

Prosecutors allege the company hired more than 100 illegal immigrants from 1999 to 2005, and continued to employ dozens of undocumented workers even after two government audits.

Hirsch said prosecutors plan to ask for six months behind bars for the two men at sentencing March 28. The maximum sentence is five years. Prison time is unusual in such cases.

The company said in a statement that it pleaded guilty “to bring this matter to a conclusion and restore normalcy to the business.”

The government has stepped up efforts to combat the hiring of illegal immigrants as the issue has grown in importance around the country. The plea bargain comes just days after federal authorities raided meat processing plants in six states as part of an investigation into the stealing and selling of identity documents so illegal immigrants could get jobs.

Last year, in one of the biggest cases of its kind, Wal-Mart agreed to pay $11 million to end a federal investigation into the use of illegal immigrants at stores in 21 states.

Companies, however, are rarely hit with criminal charges for hiring illegal immigrants.

“You have show a kind of criminal conspiracy,” said Steven Camarota, research director of the Center for Immigration Studies in Washington, a group that advocates tighter immigration controls. “The mere hiring of illegals is not enough.”

Government agents raided Golden State Fence’s Riverside office last year and found that 110 were unauthorized to work — including three the company had been ordered not to employ after a 1999 audit by the government.

Golden State, which has 750 employees, saw sales soar from $60 million in 1998 to $150 million in 2004, according to a biography of Kay provided by the company.

Among its projects: construction of part of a 14-mile border fence in San Diego in the late 1990s.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Discussion comments


Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 3.79%
$30K home equity loan FICO 4.99%
$75K home equity loan FICO 4.69%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.83%
Cash Back Cards 17.80%
Rewards Cards 17.18%
Source: Bankrate.com