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FYI - Meth isn't the only thing being manufactured by our neighbors from Mexico.

Millions made on counterfeit documents

WASHINGTON, May 5, 2006

(Knight Ridder/Tribune Business News delivered by Newstex) --
Forgers are making tens of millions, and possibly billions, of dollars selling counterfeit Social Security cards, driver's licenses, immigrant registration cards and other papers to an estimated 12 million illegal immigrants.

The dominant forgery-and-distribution network in the United States is allegedly controlled by the Castorena family, U.S. Immigration and Customs Enforcement officials say. Its members emigrated from Mexico in the late 1980s and have used their printing skills and business acumen to capture a big piece of the booming industry.

Only trained experts can spot the fakes, and the Castorena Family Organization -- or CFO, as officials call it -- has spread to at least 50 cities in 33 states.

At a sentencing hearing for one family member in December, U.S. District Judge Lewis T. Babcock of Denver said the CFO's criminal reach is "simply breathtaking" and strikes "at the heart of the sovereignty of the United States of America."

The threat of terrorism has made document forgers even more menacing since 9-11. Two 9-11 hijackers used fraudulent notarized forms to obtain valid Virginia ID cards, which enabled them to board the two airliners that crashed into the World Trade Center.

Julie Myers, ICE assistant secretary, calls document forgery an "epidemic." Her agency, a branch of the Homeland Security Department, is waging a nationwide crackdown on forgery rings and in early April, announced the formation of multiagency task forces in 10 cities: Atlanta; Boston; Dallas; Denver; Detroit; Los Angeles; New York; Newark, N.J.; Philadelphia; and St. Paul, Minn. Other participating agencies include the Justice Department, U.S. Citizenship and Immigration Services, the Labor Department, the Social Security Administration, the U.S. Postal Inspection Service, the State Department and the Secret Service.

Competition from rivals

Investigations by Immigration and Customs Enforcement have hobbled many CFO operations, indicting and convicting family members and senior subordinates. But the CFO's fugitive chieftain, Pedro Castorena-Ibarra, still controls operations from Mexico, agency investigators said, and the family enterprise continues to dominate the illicit document trade in the United States.

Agents are conducting more than 3,500 investigations nationwide into document forgery. They have closed document mills in Los Angeles, Denver, Charlotte, N.C., and several other cities in recent months. But CFO cells continue to operate in many cities, including Dallas; Houston; Miami; Kansas City, Mo.; Los Angeles; New York; Chicago; Atlanta; and Newark, N.J.

Federal authorities said that calculating the financial scope of document forgery is virtually impossible but that illicit profits easily amount to millions of dollars, if not billions. One investigation of CFO operations in Los Angeles alone resulted in the seizure of 3 million documents with a street value of more than $20 million.

"We've hit them pretty hard, but have we shut down the entire operation? I don't think we can say that yet," said Scott A. Weber, chief of the agency's Identity and Benefit Fraud Unit. "We know there are many different cells out there, and they are still providing documents."

In recent years, the CFO has faced competition from rivals, including a group called the Los Acapulcos Organization, which has cells in Denver and Phoenix. Scores of operatives in both organizations have been arrested and deported to Mexico and other countries in Latin America.

An unintended consequence

The rise of illegal document vendors is an unintended consequence of the 1986 Immigration Reform and Control Act, which is widely considered a failure. It put the burden on employers to ensure that a job applicant has legitimate papers, such as a Social Security card, driver's license or voter-registration card.

Employers complain that they often can't tell real documents from phonies and that they risk being charged with a discrimination violation if they reject a qualified applicant. The 1986 law imposes civil penalties on employers of illegal immigrants, but the sanctions have been enforced haphazardly at best.

Unscrupulous employers also exploited the statute, authorities say. In mid-April, ICE agents raided the nationwide operations of Houston-based IFCO Systems, a pallet-recycling firm, after an undercover investigation led to allegations that midlevel managers were recruiting illegal immigrants and helping them obtain phony documents. Top company officials have said that they thought the documentation was legitimate.

Illegal immigrants are often given packages of phony documents as part of a $2,000 smuggling fee. Others can easily make contact with vendors who operate on street corners or at flea markets in immigrant communities in virtually every city.

In Washington, vendors operate openly in the city's ethnically diverse Adams-Morgan neighborhood, only a few miles north of the White House, said James Spero, an agent in ICE's metropolitan Washington office. Peddlers attract potential customers by forming a C shape with their thumbs and forefingers, a sign widely recognized among illegal immigrants that the peddlers have documents for sale.

A typical transaction includes key papers such as a Social Security card, a driver's license and a "green card" granting immigrants permanent U.S. residency. Fees range from $75 to $300, depending on quality.

After a customer places the order, a runner takes the money and a photo to a document mill, typically in a nondescript house or apartment. The false documents are often in the customer's hands within an hour.

Some fakes are laughably amateurish. Analysts at the ICE document lab in northern Virginia said they occasionally come across ironed-on laminated cards that have imprints of the irons. One forger trying to replicate a document from a foreign country used a picture of his uncle as a stand-in for the country's president.

Forgers often use their own fingerprints when documents require them. They also routinely make up or use Social Security numbers that can match many numbers held by legitimate citizens and can be a first step toward full identity theft. Knight Ridder (NYSE:KRI) reported last month that the Social Security Administration and the Internal Revenue Service routinely receive evidence of people using bogus Social Security numbers but refuse to share that information with ICE officials, who want to use it to search for illegal immigrants and their employers.

Lawmakers are struggling to craft a new immigration law to correct the last law's shortcomings with tamperproof identity cards and a nationwide databank, but skeptics fear that resourceful criminals will still find ways to beat the system.

The gold standard for document forgeries, investigators said, comes off the assembly line of the Castorena network. The organization built its fortune by employing the same principles used by successful legitimate corporations: a superior product, franchises in major cities and a coast-to-coast sales force.

CFO counterfeiters microscopically study relevant U.S. documents and replicate virtually every detail, including some security features that are embedded into the laminate.

Analysts using high-tech equipment at the ICE document lab unfailingly spot forgeries, but the Castorena-produced documents can easily fool employers and even the trained eyes of police officers.

'Intricately orchestrated'

Castorena-Ibarra, one of ICE's 10 most-wanted fugitives, allegedly started the operation with three brothers and two sisters after they entered the country and settled in the heavily Hispanic MacArthur Park section of Los Angeles.

In-laws and trusted lieutenants became part of the leadership as the network expanded across the country by charging "franchise fees" of up to $15,000 per month to run document mills.

Key CFO operatives routinely use phony documents to mask their identities. In some cases, they're known only by nicknames, such as "Gabby," the suspected leader in Kansas City, and "Coyote," the Houston cell leader. The leader in Dallas is believed to be Alberto Soto-Ronquillo, who has been part of the CFO for more than a decade, ICE agents say.

For years, the organization supplied most of the nation's print stock of phony documents. Later, it distributed computer templates after the high-tech era opened the door to computerized counterfeiting, investigators said. Court documents from a Denver investigation describe the network as "intricately orchestrated and exceptionally well-organized."

The Castorenas forbid local operatives from trafficking drugs and engaging in other sideline trades that would attract increased scrutiny from law enforcement, investigators said. They also regularly update their products to keep pace with government-mandated changes in official documents.

Castorena-Ibarra, 42, who fled to Mexico to escape federal indictments, still runs the organization, passing orders through surrogates in the United States, said Cory Voorhis, an ICE special agent in Denver.

ICE officials said that they're working with Mexican authorities to return him to the United States but that the mustachioed fugitive moves frequently and changes cellphones every few days.

At one point, he was thought to be living with his wife and son in a lavishly furnished home in Zapopan, a suburb of Guadalajara. He travels often to Mexico City and is thought to have several mistresses. ICE also has received information that Castorena-Ibarra and other family members have invested in legitimate businesses such as real estate and taxi companies.

"He's pretty comfortable," Voorhis said. "He believes he's safe."

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Dave Montgomery, (202) 383-6016 dmontgomery@krwashington.com

Newstex ID: KRTB-0070-8511999