Feds’ push to seize restaurant a rare one

Illegal workers at heart of French Gourmet case

By Greg Moran, UNION-TRIBUNE STAFF WRITER

Sunday, April 25, 2010 at 12:04 a.m.

The government is attempting to seize properties of The French Gourmet, open in Pacific Beach since 1979. John Gibbins / Union-Tribune

For more than three decades, The French Gourmet restaurant has been serving high-end cuisine in its 45-seat dining room, catering events across the
county, and producing hundreds of wedding cakes annually.

But now the business on Turquoise Avenue in Pacific Beach finds itself the target of federal immigration authorities and prosecutors who want more than just a great Coquille St. Jacques or strawberry
bagatelle cake.

In an indictment released last week, the government said it wants the property where the iconic restaurant has done business since 1979.

That move makes the case against The French Gourmet more than a simple immigration enforcement case. Prosecutors could have several reasons for seeking the property, legal experts said. They may want to
make a prominent example of the restaurant as they pursue businesses
that hire illegal workers. Or perhaps they want to increase the stakes
and the pressure to get guilty pleas.

Whatever the reason, such a move is a rare and maybe even unprecedented wrinkle in the federal government’s enforcement program that for the past year has focused on employers who hire illegal
workers.

Virginia Kice, a spokeswoman for U.S. Immigration and Customs Enforcement, said she was unaware of any other instances in which a business was seized as
the result of a work-site violation criminal case.

On Wednesday, the U.S. Attorney’s Office unsealed the indictment charging owner Michel Malécot, the restaurant corporation that he heads and manager and pastry chef Richard Kauffmann with knowingly hiring
undocumented workers.

The indictment seeks criminal forfeiture of the two land parcels the business occupies, which records show have an assessed value of more than $1.3 million.

Malécot and Kauffmann pleaded not guilty to charges of conspiracy, false attestation and harboring illegal immigrants. The government alleges the restaurant for several years had a “pattern and practice”
of hiring illegal immigrants and continued to employ them after being
told that the workers’ Social Security numbers were bogus.

On Friday, Malécot said that he was “very shocked” by the indictment and the charges. While he said he has been heartened by an outpouring of support from longtime customers and others, he said he was worried
by the specter of losing his business.

“Of course I’m concerned,” he said. “We’ve worked for so many years on that property.”

The indictment is in one sense the latest example of a stepped-up effort by the Obama administration to attack illegal immigration by cracking down on the employers who hire them. Several high-profile cases, including one in Maryland and another in Illinois, targeted restaurants, an industry that historically has been a magnet for illegal workers.

U.S. Immigration and Customs Enforcement has increased its investigative audits of employers by scouring their books and employment records for evidence they were illegally hiring.

But in another sense, the forfeiture bid is a way to signal to employers they must comply with the law.

“It changes the complexion of the case,” said Charles LaBella, a defense lawyer and former U.S. attorney in San Diego. “The government is upping the price of poker here.”

And the possibility of losing the business through forfeiture may also be a tactic to pressure Malécot to plead guilty.

“They are all about leverage, and if they can threaten someone with the loss of property, it gives them one more tool to work with,” said San Diego defense lawyer Gerald Singleton.

The U.S. Attorney’s Office declined to comment on the case, which began in May 2008 when Immigration and Customs Enforcement agents raided the restaurant and arrested 18 undocumented workers. Discussions
since then on settling the case proved fruitless, apparently over the
amount of the fine the government was seeking.

“There were some efforts to try to negotiate the case and get it resolved,” said Kauffmann’s lawyer, Jeremy Warren. He added the government wanted an “outrageous” amount of money but declined to
reveal how much.

The government has gained assets of businesses in forfeiture proceedings stemming from work-site immigration violations. In San Diego in 2007, the owner and vice president of the Golden State Fence
Co. pleaded guilty to criminal charges of hiring illegal workers, and
they forfeited $4.7 million.

In the indictment of The French Gourmet, the government says the property should be given over because it was used to facilitate the illegal hiring, among other charges. But that can be tricky, said
Richard Barnett, a San Diego lawyer whose practice concentrates on
forfeiture law.

“Here you’re talking about what are alleged paperwork violations, and they are trying to take someone’s entire property,” he said. “The question is how did this property facilitate the violation?” To him,
the property is not involved in the violation, and he said arguing such
a concept might not be enough to persuade a judge to approve a
forfeiture.

The indictment says the company’s managers, including Malécot and Kauffmann, would certify on required Employment Verification Forms, known as I-9 forms, that documents employees gave them appeared to be
genuine and they appeared to the best of their knowledge to be eligible
to work in the U.S.

Workers were then put on the payroll. But later, the Social Security Administration would send “no match” letters to the restaurant, saying that the Social Security numbers provided did not match the names of the actual holders
of those numbers.

At that point, the indictment said, the workers would be taken off the payroll and paid in cash under the table, until they acquired employment documents that included new Social Security numbers. Those
would also be sent in, with the restaurant attesting they appeared
genuine.