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Two business owners guilty
They avoided paying taxes by paying cash to illegal immigrants.
Associated Press
Published November 5, 2007
The co-owners of a Florida-based janitorial service that authorities say provided cleaning crews staffed with illegal immigrants to a northern Michigan resort have pleaded guilty to charges in the case.
The investigation into Rosenbaum-Cunningham International Inc., or RCI, of Palm Beach led to the nationwide arrest in February of more than 200 illegal immigrants, mostly Mexican nationals.
Richard M. Rosenbaum, 61, and Edward S. Cunningham, 44, have pleaded guilty to conspiring to defraud the federal government of taxes and harboring illegal aliens in plea agreements with federal prosecutors.
Cunningham, of West Palm Beach, entered his plea Friday and Rosenbaum, of Longwood, entered his plea on Oct. 17. Rosenbaum's sentencing was scheduled for Feb. 4 in federal court.
Records didn't indicate a sentencing date for Cunningham.
RCI controller Christina A. Flocken of Longwood also was charged in the case. She has a plea hearing scheduled for today.
The three were charged with fraud, immigration and tax charges in a 23-count indictment in U.S. District Court in Grand Rapids, Mich.
"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 when the indictment was unsealed in February. "It involved flagrant criminal behavior."
Their practice of paying cash wages to their workers deprived the U.S. government of about $18.6-million in employment taxes, the indictment said.
About 203 illegal immigrants who worked for RCI were arrested early this year. Agents took them into custody at 63 business locations in 17 states, including Florida.
A joint investigation began 20 months ago at the Grand Traverse Resort in Acme, Mich.
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 told managers to provide a work force of illegal immigrants with fake resident cards, or green cards, the indictment said.
Rosenbaum faces up to 10 years in prison and a $500,000 fine. Cunningham faces a five year prison term and up to $250,000 in fines. Both face restitution amounts that the government says could exceed $16-million.
[Last modified November 5, 2007, 00:29:52]
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