The U.S. Immigration and Customs Enforcement agency arrested current and former managers of the German-based IFCO Systems in raids on more than 40 of the company's plants in 26 states. The agency says nearly 1,200 illegalaliensworking for the company were arrested during theraids.

Homeland Security Secretary Michael Chertoff announced the crackdown during a news conference in Washington, saying customs agents are now targeting businesses allegedly involved in deliberately hiring illegal immigrants in violation of U.S. law.

"We target those organizations," he said. "We use intelligence to define the scope of the organization and then we use all of the tools we have, whether it is criminal enforcement or the immigration laws, to make sure we come down as hard as possible and break the back of those organizations."

Officials say the investigation into IFCO Systems, a manufacturer of crates and pallets, began a year ago when illegal immigrants employed by the company were seen destroying tax forms and using fake cards for the U.S. retirement system known as Social Security.

Authorities say IFCO officials transported illegal aliens to and from work, and deducted money from the immigrants' paychecks to cover housing and other expenses.

Secretary Chertoff says the government will continue to crack down on businesses that allegedly exploit an illegal workforce to turn a profit.

"Americans are rightly concerned about the need to enforce our immigration laws and our work laws in the United States," he said. "That means we have got to focus on illegal migration and also on those who flagrantly violate the law by encouraging that illegal migration, whether they do it by smuggling the migrants across the border or by employing the migrants in a systematic fashion once they get into the United States."

Chertoff says customs officials will continue to deter illegal employment by removing criminal aliens, building strong worksite enforcement, and cracking down on businesses that support illegal immigration.

A statement from IFCO Systems says the company is cooperating with the investigation.