- The Washington Times - Sunday, February 25, 2007

Three executives indicted last week in a fraud and tax scheme in the hiring of hundreds of illegal aliens nationwide were first targeted by federal authorities at least two years ago, suspected of recruiting laborers from Mexico, Honduras and Guatemala to work at Michigan businesses.

Federal investigators, including prosecutors Hagen W. Frank and Matthew G. Borgula, initially focused on a spate of fraudulent green cards showing up in Grand Rapids, Mich., eventually finding their way to Rosenbaum-Cunningham International Inc. (RCI), a Florida-based contractor that supplied janitorial workers for theme restaurants and hospitality venues nationwide.

One of RCI’s customers was the Grand Traverse Resort & Spa near Traverse City, Mich., which agreed to cooperate in the federal probe.

Last year, federal law-enforcement authorities said, the prosecutors linked an illegal alien arrested by police in Grand Rapids for possessing fraudulent documents to a state employee, Juanita Schlagel. She pleaded guilty to selling phony green cards and led investigators to an RCI official.

The prosecutors targeted RCI in a scheme to recruit illegal workers nationwide, give them phony immigration documents and pay them in cash. They said owners Richard M. Rosenbaum and Edward Scott Cunningham wired money to company subordinates for the workers to be paid in cash to avoid federal reporting requirements.

“RCI encouraged and induced aliens who were employees to reside illegally in the United States so that RCI could operate more profitably,” Mr. Borgula said in a complaint used to seize money from RCI bank accounts.

In August, the government filed four separate forfeiture cases seeking more than $2.1 million worth of real estate from Mr. Rosenbaum, Mr. Cunningham and RCI Controller Christina Flocken. Mr. Borgula asked for a stay in the forfeiture proceedings while prosecutors further built their criminal case.

“It is highly likely that the criminal investigation into the violations … may result in criminal charges,” Mr. Borgula said in the filing. “The United States anticipates that the investigation of this matter will be completed within six months.”

On Thursday, nearly six months to the day, a federal grand jury indicted Mr. Rosenbaum, 60, of Longwood, Fla., Mr. Cunningham, 43, of West Palm Beach, Fla., and Mrs. Flocken, 59, also of Longwood, on charges of conspiracy to defraud the United States and to harbor illegal aliens for profit, harboring illegal aliens for profit and evading payment of federal employment taxes.

More than 200 illegal aliens were apprehended during raids last week in 17 states at 63 locations — including the Hard Rock Cafe, ESPN Zone, Planet Hollywood, Dave & Busters and the House of Blues restaurants.

The indictment said restaurant chains and hospitality venues paid RCI $54.3 million for janitorial services from 2001 to 2005 and that by failing to collect and pay federal income, Social Security, Medicare and federal employment taxes on the wages it paid to its work force, RCI was able to evade payment of $18.6 million in employment taxes.

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