17-state raid aims at illegal hiring

In a sweep across California and 16 other states, federal immigration officials descended on eateries such as the Hard Rock Cafe and Planet Hollywood on Wednesday and Thursday, arrested almost 200 illegal immigrants working for a janitorial company and filed criminal charges against the firm’s top three officials.

Accusing Florida-based Rosenbaum-Cunningham International of building a business around “a ghost workforce that was paid in cash,” agents raided establishments in 63 locations -- including West Hollywood, Arcadia, Anaheim, Ontario, Orange, Irvine and San Diego.

The arrests are the latest high-profile attempt by the Bush administration to shore up its enforcement credentials as Congress and the White House gear up for another round of debate over the nation’s immigration laws that is expected to begin within weeks.

Critics, many within the president’s party, have assailed the administration for its support of an immigration overhaul that would give some illegal immigrants a chance at citizenship, calling instead for an “enforcement-first” approach that would ensure border and work-site security.

On Thursday in Washington, Julie Myers -- head of Immigration and Customs Enforcement -- unveiled a 23-count indictment against co-owners Richard Rosenbaum and Edward Cunningham and controller Christina Flocken.

Myers said the criminal charges represented new, stricter tactics to fight illegal immigration, stressing that the three company officials faced “the very real threat of jail time.”

The three are charged with crimes that include evading $18 million in federal tax payments, and directing a manager to obtain 20 fake visas for cleaning crews at a Michigan resort -- and then rewarding that manager with a $1,000 bonus.

Immigration authorities said company officials used the tax funds to buy themselves race horses, lavish homes and luxury boats, and to pay college tuition for their children. “It’s all about the money,” said John Imhoff Jr., acting chief of the criminal investigation division of the Internal Revenue Service.

Company officials did not respond to requests from The Times for comment. But in a statement to the Washington Post, John Vandevelde and Jeffrey Rutherford, lawyers for Cunningham, said that the use of undocumented workers “pervades many industries throughout the United States,” and that their client is cooperating fully and “expects to resolve this matter to everyone’s satisfaction.”

Myers issued a tacit warning to other companies when she praised a western Michigan hotel that cooperated with immigration officials on the 20-month probe.

“We stand ready to work with honest companies -- companies like Grand Traverse Resort and Spa -- who want to work with us and change their business practices and do the right thing,” she said.

Christine Baum, a manager with ESPN Zone, said the janitorial company provided crews to clean the restaurant at Downtown Disney in Anaheim after it closed each day. The contract was terminated Thursday in eight ESPN Zone locations.

“We’re extremely disappointed with RCI. We applaud the federal government for taking this action,” Baum said, noting that the janitorial contract would be given to another company only after ESPN Zone carefully vetted its hiring practices using techniques yet to be determined.

Rising enforcement

Southern California accounted for more of the 195 illegal immigrants arrested Wednesday night and Thursday morning than any other region, ICE spokesman Jeff Dishart said. Twenty were arrested in Orange County, 18 in Los Angeles County, eight in San Diego County and four in San Bernardino County. The raids were conducted while the businesses were closed.

Dishart would not provide the names of the California businesses that were targeted because the investigation is continuing.

ICE has conducted a series of nationwide raids at a variety of businesses in the past year, deporting hundreds of illegal immigrants.

Officials arrested 1,297 illegal workers in a December raid on Swift & Co., a meatpacker with branches in several states. The company was not charged. ICE agents arrested seven managers and 1,187 employees in an April raid on Houston-based IFCO Systems North America, a pallet-making company.

The stepped-up enforcement has forced companies to scramble to find legal workers and torn immigrant families apart, in some cases leaving children separated from their parents. Myers said the arrested immigrants faced deportation, except for an unspecified number who were released “on humanitarian grounds” because they were the sole parent in a household.

Immigrant advocates were quick to condemn the arrests. Angela Sanbrano, executive director of the Central American Resource Center in Los Angeles, said such raids are an ineffective way to attack illegal immigration and only create fear in the immigrant community.

“They want to send a message that you can’t come to this country without documents and stay, and that they are going to get deported,” she said. “It’s not working, because people are coming. Walls and raids and deportations are not going to stop the flow.”

But lawmakers who back an enforcement-first policy cheered the news. “I think it sends a good message out across America,” said Rep. Steve King of Iowa, the ranking Republican on the House immigration subcommittee. “I think it’s significant that they’re indicting CEOs of these companies who set up business plans based on hiring illegal immigrants. The message that goes out to other CEOs is that you might end up in jail if you persist in illegal activity.”

The administration’s indictment against Rosenbaum-Cunningham International estimates that the cleaning and grounds-maintenance service earned more than $54 million between 2001 and 2005 from such clients as Dave & Busters and China Grill.

It charges that Rosenbaum, Cunningham and Flocken failed to collect or pay federal income, Social Security, Medicare and federal employment taxes on wages -- evading payment of $18.6 million.

Officials said the three spent 63% of those funds on company operations and split the rest among themselves.

“The defendants made themselves millionaires ... at the expense of the U.S. taxpayer,” said Hagen W. Frank, assistant U.S. attorney for the Western District of Michigan, where the case is centered.

Immigrant employees were recruited through word of mouth, advertisements in Spanish-language newspapers, and at job fairs and Latino cultural festivals, according to the indictment. No records were kept of the workers, who prosecutors allege were not required to show proof of citizenship.

“They created shell companies and set up a number of bank accounts to hide the money from the government and then used the money for their own personal benefit and lavish lifestyles,” Imhoff said.

Myers said ICE has no evidence that any of the restaurants where the janitors worked was involved in the alleged crimes.

Michigan probe

The probe was triggered after the arrest of an illegal immigrant by police in Grand Rapids, Mich. Frank said that man told authorities about false documents he had obtained from a state employee who was selling the Social Security numbers, dates of birth and visa numbers of real people.

That employee, Janie Schlagel, in turn led investigators to the Rosenbaum-Cunningham International supervisor at the resort. In February 2006, ICE agents raided the resort and arrested about 20 illegal employees.

nicole.gaouette@latimes.com

adam.schreck@latimes.com

Times staff writers Anna Gorman in Los Angeles and Jennifer Delson in Orange County contributed to this report.

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Taking more employers to task

The Bush administration has increasingly targeted companies that knowingly hire illegal immigrants, sometimes seizing profits and charging their officers with crimes that can carry stiff sentences.

April 11, 2006: Two employment agencies and nine employees were charged with hiring illegal immigrants, committing mail and wire fraud, and laundering about $5.3 million. The indictment alleges that HV Connect and TN Job Service provided hundreds of illegal immigrants to companies in Ohio.

April 14, 2006: The operators of three sushi restaurants in Baltimore agreed to forfeit more than $1 million and pleaded guilty to criminal charges stemming from an illegal immigrant employment scheme.

April 19, 2006: After a yearlong probe, seven current and former managers of IFCO Systems North America, a pallet company based in Houston, were charged with harboring illegal immigrants; 1,187 suspected illegal workers were arrested.

May 2, 2006: The owner of an Indiana stucco firm was charged with money laundering, harboring illegal immigrants, transporting illegal immigrants and making false statements tied to an illegal employment scheme.

July 7, 2006: Two subcontractors to Fischer Homes in Kentucky pleaded guilty to harboring illegal immigrants. Four supervisors were charged with aiding and abetting and harboring illegal immigrants.

July 20, 2006: Two Kentucky companies pleaded guilty to harboring illegal immigrants and money laundering by supplying illegal workers to Holiday Inn, Days Inn and other hotels.

Oct. 3, 2006: Two temporary-labor companies, the president and two officers pleaded guilty to conspiring to provide hundreds of illegal immigrants to work for ABX Air, a national air cargo firm from Ohio.

Dec. 12, 2006: More than 1,297 employees were arrested at Swift & Co. meat processing plants in six states in a 10-month investigation. Of those arrested, 219 were charged with crimes and the rest were charged with violating their immigration status.

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Source: U.S. Immigration and Customs Enforcement