Doris Ruiz, the former high-profile owner of a Minneapolis temporary staffing agency, is going to prison for a year and a day for pocketing more than $425,000 withheld from employees’ paychecks for taxes.
The 40-year-old native of Peru once served on the Latino Advisory Committee for the mayor of Minneapolis, following her success with Olen Staff Co., a company she started in 2001.
Federal agents shut down that company in 2008, following an investigation into allegations she supplied false documentation and placed illegal immigrants, most of them Mexican-born workers, with employers in several states. However, the federal investigation into her activities and company continued.
That investigation led to this indictment, and then a plea agreement, where Ruiz reportedly admitted to collecting and withholding about $150,000 from employees for federal income taxes and $276,000 in Social Security and Medicare taxes. Further, for a two-year period, she says she did not pay any taxes for herself or the workers.
Ruiz reportedly admitted to collecting and withholding about $150,000 from employees for federal income taxes and $276,000 in Social Security and Medicare taxes.
In exchange for pleading guilty and for agreeing to pay all money owed, Ruiz escaped further prosecution, at least relating to employment taxes.
Law enforcement became aware of Ruiz in 2006, when a sheriff’s deputy stopped her and three other adults in a car. She said they were all on their way to a job site in Wisconsin. Federal agents discovered later the workers with her in the car were in the country illegally.
According to news reports, two months later, a confidential informant posed as a temporary job seeker with no documentation, and Ruiz allegedly set him up with a job and an apartment.
Ruiz went under the radar for a while, but in April of 2011, she surfaced again, and again there were rumors and allegations of employing illegal immigrants on various job sites.
I traveled to one of those job sites in northeast Minneapolis, where Spanish-speaking workers were replacing the slate tile roof of a large home that had been turned into a youth shelter.
The men wouldn’t talk to me, but they did speak to a reporter at the Minneapolis StarTribune newspaper. He told the paper the roofers were employed by a couple of subcontractors hired by Ruiz, and that all of them were allegedly no son bañados, or undocumented.
The roofers were employed by a couple of subcontractors hired by Ruiz, and that all of them were allegedly no son bañados, or undocumented.
At The Works, TempWorks’ first-ever industry conference in Minneapolis last week, the subject of hiring undocumented workers came up. It was particularly salient since several of the event’s attendees were from Texas and the Gulf Coast region of the U.S., areas where the issue of undocumented workers is a hot topic.
Several of these staffing agency owners and principals stated unequivocally, that they are competing against staffing agencies who knowingly – and deliberately – use illegal immigrants. And that it is in fact built into their very business model.
That’s crazy, was the consensus of the conversation. If you operate your business in such a manner consistently, it’s only a matter of when, not if, ICE agents will show up at your door. And the downside is way steep! You stand to lose your business, your savings, all you worked for, and even your freedom, as Doris Ruiz learned.
Do you know of companies operating in such a manner in your market? What do you think about that? Can you compete against them? Do you think they will get caught? Or is the cheating simply too widespread?
{ 7 comments… read them below or add one }
Staffing companies should check to see if a corporation is real or fictitious before sending staff to work for it. (Check the state’s corporation database to see if the corporation exists or if it’s really just a website). For example, I recently learned that a company called @ home healthcare, which provides caregivers to elderly clients, is a fictitious company that is not owned by the person who alleges to be its CEO. As a result, my friends elderly parents were robbed by a temporary staffer, who was using 3 identities. When I looked up the corporation in the Florida and New York corporation databases, I found that the company didn’t exist, and wasn’t registered to the person who claimed to be its CEO.
Like or Dislike:
1 
0
It’s a huge problem in Southern California as well. The burden here shouldn’t only fall on the staffing companies though. There are some very large companies that not only know of the practice but are complicit in it. I was told by a major name grocery DC that they wouldn’t entertain switching to us as a provider BECAUSE we eVerified every employee and that it would decimate their current workforce. They said that they didn’t care if ICE came because it would “be on the agency” and the 3PL, not them. They need to switch liability for I-9 enforcement to a “co-employer responsibility” instead of creating a loophole absolving the client of responsibility.
Well-loved. Like or Dislike:
4 
0
I would submit she went to jail more because the withholding and non-submitting of payroll taxes than the hiring of undocumented workers. The government needs to get serious about putting all employers on a level playing field by requiring E-verify for all employees. I know this doesn’t resolve the all issues, expecially the issue of real information on false documents (someone impersonating another person) but it aleast requires all employers to follow the same rules. Rules that have an opportunity of helping better enforcement.
Well-loved. Like or Dislike:
5 
0
InTheMajors is spot on. Many customer companies knowingly engage such unethical staffing partners solely due to the lure of “cost savings.” I agree that it is in the best interest of institutions to be financially scrupulous but not so much that they willingly decide to break the law for a profit gain. The unfortunate reality is that our political system will not go near this topic and investigations leading to convictions are rare. Its is a political powder keg and thus such practices are thriving across many industries and the entire country. Another reality is that the illegal workers are being victimized for profit gain as well. Its easy to point anger at the workers but they too are being taken advantage of. Its a BIG problem that seemingly receives little regulation and enforcement by the law. For every 1 conviction I’d bet there are 100 similar businesses/practices going unnoticed and/or undisciplined.
Like or Dislike:
1 
0
Absolutely the burden of I-9 documentation and enforcement should be shared by the staffing companies AND their clients. You added a great point IntheMajors that it’s not only staffing companies deliberately hiring illegals and making it a part of their business model, but so are large employers. That statement from your potential client that E-Verify would “decimate their current workforce” kind of makes a mockery of our current laws and enforcement levels. I also agree that creating a co-employer status would at least help mitigate this issue. I can imagine it is hugely disappointing to hear a client say the reason you aren’t getting their business is because you are following the law.
FraudNotHirePractices, you are right, clearly the woman in my story was sent to jail because of the withholding and tax issues, and not for her hiring practices. Perhaps I should have made that more clear. The commingling of the hiring practices and the tax fraud info. came about by way of background, in terms of the other business practices the feds said they had been investigating. In these cases it’s not just what the feds know to be true, or think they know, it’s what they think they can prove in court. To be clear, and accurate, Doris Ruiz will serve prison time for skimming, and not for her hiring practices.
Thanks for your commments.
David – thank you for an informative article. I don’t know why more companies do not use eVerify…it’s not a silver bullet but it helps companies comply with federal law. And as you stated – it is only a matter of time before ICE catches up with these businesses.
It is interesting to note that the first article in the American Staffing Association’s code of ethics requires member staffing firms to “To comply with all laws and regulations applicable to their business, and to maintain high standards of ethical conduct in the operation of that business and in their dealings with employees, clients, and competitors.”
Like or Dislike:
2 
0
Jose, you bring up a great point about the ASA. Unfortunately in my experience, the ASA does not have the desire or ability to hold members to that standard. I had a very well known national franchise based staffing company “roll over” one of my accounts. We’ve all done it or had it happen and the ASA standard is a 30 day notice allowing the incumbant agency to either place said employees on a different assignment or ensure an orderly transition. To my surprise this fellow ASA member gave no notice, written or otherwise, and when confronted with the fact literally told me “oh well”. I contacted the ASA and was told that they had no complaint process nor intention of assisting with the matter. Keep in mind that the agency in question had the ASA logo and a blurb about complying with all ASA guidelines on their website homepage. The ASA is a good resource and selling point but in the end, their ethics policy has no teeth.
Like or Dislike:
1 
0