Two Iowa trucking companies are being sued for racketeering and fraud for allegedly obtaining cheap labor from South Africa through the use of a fictitious cattle-feeding operation.

The lawsuit was filed in U.S. District Court for the Northern District of Iowa by the national nonprofit organization Farmworker Justice and by Iowa Legal Aid. Named as defendants are Kuchenbecker Excavating and H & S Farms-Livestock, their owners, and a Tennessee worker-placement company, Golden Opportunities International.

The companies are accused of conspiracy and racketeering activities involving “numerous acts of visa fraud, wire fraud, and fraud in foreign labor contracting, which all are ongoing and continue to the present.”

Trent Taylor, an attorney with Farmworker Justice, said Friday that the practices alleged in the lawsuit appear to be relatively common in the agriculture industry.

“Generally speaking, companies have often, through different means, employed different types of fraud to evade the restrictions imposed on the use of temporary migrant workers in the United States,” he said.

The companies hire migrant workers, in theory for seasonal agricultural work, as a way of obtaining cheap labor. The workers’ visa status makes them far less likely to challenge any violations related to the visa program or wage-and-hour laws, Taylor said.

Lawsuit: ‘Livestock’ company has no livestock

The lawsuit alleges 59-year-old Carel Hanekom of South Africa was admitted to the United States under the federal government’s H-2A temporary foreign-worker visa program so that he could perform labor for Kuchenbecker Excavating and H & S Farms-Livestock near the northern Iowa town of Rake.

The two companies are alleged to have used Hanekom “as a pawn in a fake agricultural enterprise” between July 2021 and  June 2023. In order to obtain the necessary H-2A guest worker visa for Hanekom, the companies allegedly misled the U.S. Department of Labor as to Hanekom’s actual job duties.

Instead of employing Hanekom as an agricultural worker as allowed under the rules of the guest-worker program, the defendants allegedy put Hanekom to work as a long-haul truck driver. The lawsuit claims H & S Farms-Livestock, which purported to be raising livestock, has no livestock whatsoever.

Specifically, the lawsuit alleges Hanekom first learned about the job in Iowa by talking with one of the companies’ employees, Steve Robinson, on the phone. Robinson allegedly promised Hanekom 75 hours of work per week on a farm hauling grain, chicken manure and other agricultural commodities. The job was to pay $17 an hour, plus housing and meals.

Hanekom accepted the job and left his home in South Africa to come to Rake, Iowa, where he was put to work as a long-haul trucker, spending most of his nights in hotels while hauling loads of rock used to build a new runway at an Air Force base and hauling construction materials for a bridge and a power station. Hanekom had to use his own money to pay for meals while on the road, the lawsuit claims. His hourly wages were allegedly well below the prevailing wage for non-agricultural heavy truck driving.

The two Iowa companies are also accused of fraudulently evading the seasonal-employment requirements of the H-2A program by shuffling Hanekom and other South African workers between Kuchenbecker Excavating and H & S Farms-Livestock every six months, although the two companies operate together as a single enterprise.

“By paying Hanekom significantly less than the required minimum wage for truck driving, the defendants have undermined the wages of domestic U.S. truck drivers,” the lawsuit alleges, “thereby obtaining an unfair competitive advantage over other trucking companies that have obeyed the law.”

Forty South African workers alleged to have quit

According to the lawsuit, Kuchenbecker Excavating and H & S Farms-Livestock are operated by Kenneth Kuchenbecker and his daughter, Heather Smidt, both of whom are named as defendants in the lawsuit along with Robinson.

Golden Opportunities International is alleged to have assisted in the recruiting of foreign nationals from South Africa to work in Iowa. The company, which processes paperwork for various employers under the H-2A visa program, is alleged to have acted as an agent of Kuchenbecker Excavating and H & S Farms-Livestock.

The H-2A visas that are at the heart of the lawsuit are intended to limit foreigners’ employment in United States agriculture to temporary or seasonal jobs. Before such visas can be granted, there must be a showing that there is an insufficient number of workers within the United States to perform the job, and that the employment of foreigners will not adversely affect the wages and working conditions of Americans working in the same field.

Employers who take advantage of the visa programs are required to certify they will pay the highest applicable prevailing wage and meet federal and state minimum wage laws. Those that hire workers through the H-2A program are obligated to provide each worker with three meals per day, or furnish supplies and facilities for workers to prepare their own meals.

According to the lawsuit, Kuchenbecker Excavating and H & S Farms-Livestock never employed Hanekom to perform any of the work described in their job orders – which included administering vaccinations to livestock, maintaining animal housing and feeding cattle. In addition, the companies allegedly didn’t employ any of Hanekom’s fellow H-2A workers to perform ag-related work.

“There is no livestock feeding operation at H & S Farms- Livestock,” the lawsuit claims. “During his entire time working for the defendants under the job orders submitted by H&S Farms, (Hanekom) never encountered any cattle or livestock.”

Golden Opportunities allegedly had knowledge of the true nature of the work performed by the H-2A workers in Rake and collaborated with the Iowa companies to defraud the U.S. Department of Labor.

Since 2018, the two Iowa companies are alleged to have filed at least a dozen H-2A applications with the federal government, through which they brought South African workers to Iowa. During that same time, more than 40 South African workers allegedly left their jobs in northern Iowa before the end of their contracts due to harm they suffered from fraudulent misrepresentations in their job orders.

Farmworker Justice: Regulations rarely enforced

“Kuchenbecker Excavating and H & S Farms-Livestock have fraudulently passed themselves off as agricultural enterprises, although in reality they operate exclusively as trucking companies,” the lawsuit alleges.

Taylor, the attorney for Farmworker Justice, said Friday that the guest-worker programs are not adequately overseen by the federal government. Too few resources are allocated to verifying the accuracy of claims made by employers, he said, and even when violations are ferreted out, there’s a lack of enforcement action.

He said one study by the Economic Policy Institute suggests that in the realm of agriculture employment, employers have a roughly 1 in 100 chance of being investigated, although more than 70% of those who are investigated are found to have committed violations.

“The risk of being investigated is so slim that the cost of violating the law is just assumed to be part of the cost of doing business,” Taylor said.

The lawsuit seeks unspecified actual and punitive damages for racketeering, fraud, wage-and-hour violations, breach of contract and unjust enrichment.

The Iowa defendants, who have yet to file a response to the allegations, could not be reached for comment.

Gabriel Oosthuysen, program director at Golden Opportunities International, declined to comment on the case other than to say the company last provided services for the two Iowa companies in August of this year.