The Associated Press
More than 200 illegal immigrants were arrested and three officials at a nationwide janitorial service face federal fraud and tax charges after an investigation of cleaning crews at a northern Michigan resort, government officials said.
The detainees - mostly Mexican nationals - who were rounded up early Thursday were working as janitors for Rosenbaum-Cunningham International Inc., or RCI, a Florida-based cleaning contractor.
RCI co-owners Richard M. Rosenbaum, 60, of Longwood, Fla.; and Edward Scott Cunningham, 43, of West Palm Beach, Fla.; and firm controller Christina A. Flocken, 59, also of Longwood, face criminal fraud, immigration and tax charges in a 23-count indictment unsealed Thursday in U.S. District Court in Grand Rapids.
"This is not a case of bad bookkeeping or skirting the rules," said Brian M. Moskowitz, special agent in charge of the Detroit office of U.S. Immigration and Customs Enforcement. "It involved flagrant criminal behavior."
Moskowitz said during a news conference in Grand Rapids that federal agents arrested Rosenbaum in Longwood earlier in the day. Cunningham and Flocken were expected to soon turn themselves in to federal authorities in Grand Rapids, where the case will be tried, he said.
Their practice of paying cash wages to their workers deprived the U.S. government of about $18.6 million in employment taxes, according to the indictment.
"In this particular investigation, these defendants took advantage of illegal workers in order to enrich themselves by violating the internal revenue laws that were created specifically to protect the legitimate work force, all at a cost to taxpayers of approximately $18 million, all so that they could live a very lavish lifestyle and live the high life," said Sandra L. Carter, special agent in charge of the Internal Revenue Service office in Detroit.
About 203 illegal immigrants who worked for RCI were arrested and expected to be deported, Moskowitz said. Agents took them into custody at 63 business locations in 17 states and the District of Columbia.
An outgoing telephone message from RCI's headquarters in Palm Beach, Fla., said the company - incorporated in Nevada - had "ceased operations" effective Thursday.
There was no home phone listing in Longwood for Rosenbaum and calls could not be completed to West Palm Beach homes listed under Cunningham's name. A woman who identified herself as Flocken hung up on a reporter who called her at home.
The joint ICE-IRS investigation began 20 months ago at the Grand Traverse Resort in Acme in Michigan's northwestern Lower Peninsula.
RCI contracted with the resort between June 1997 and March 2006, according to the indictment. Between 2002 and 2006 alone, Grand Traverse paid RCI more than $3 million for grounds and maintenance services, kitchen cleaning and housekeeping duties.
Not only did RCI fail to pay employment taxes on its nationwide operations - its clients included such venues as Planet Hollywood, Hard Rock Cafe and ESPN Zone - but its top officials also had its supervisors procure and maintain a work force of illegal immigrants and authorized managers to provide them with fake resident cards, or green cards, according to the indictment.
Planet Hollywood founder and owner Robert Earl said Thursday evening that his restaurants never used RCI for cleaning. The company did contract with an earlier janitor firm that was operated by the RCI officials, but ended that relationship by 2001, Earl said in an interview with The Associated Press. He denied that janitors at any of his restaurants were included in the sting.
"I have phoned all the restaurants, and we have had no (federal) visits, and do not employ this company," Earl said in a telephone interview from Orlando, Fla.
Spokespeople with the U.S. Attorneys' office in Grand Rapids, Mich., and U.S. Immigration and Customs Enforcement could not immediately clarify whether Planet Hollywood was linked to the illegal activity.
The three company officials facing charges also set up shell companies to hide excess assets, the indictment says.
Although the case is being prosecuted in Grand Rapids, none of the illegal immigrants picked up Thursday was arrested in Michigan.