Thread: RCI execs get prison for fraud, hiring illegals

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RCI execs get prison for fraud, hiring illegals
Tuesday, March 04, 2008
By Nate ReensThe Grand Rapids Press

A failed plant-selling business led Richard Rosenbaum and Christina Flocken to start a janitorial and landscaping company that made them millionaires.

It also began a practice of hiring day laborers that transformed into conspiring to employ 1,000 illegal immigrants and failing to pay federal taxes for a venture that landed cleaning contracts at entertainment venues such as the Hard Rock Cafe, House of Blues and northern Michigan's Grand Traverse Resort.

That metamorphosis became a habit at Florida-based Rosenbaum-Cunningham International, whose top three executives were handed prison sentences between 30 months and 10 years on Monday.

U.S. District Judge Paul Maloney ordered Rosenbaum, 62, the one-time president of RCI, to serve 10 years in prison for conspiring to defraud the government and harboring illegal aliens.

Flocken, the company's 60-year-old controller and the mother of three of Rosenbaum's children, earned 30 months for working the company's books, allowing them to avoid $18 million in employment taxes.

A third executive, Vice President Edward Cunningham, 60, who was buying the business from Rosenbaum, was sentenced to 51 months in prison.

The trio also must reimburse the government nearly $17 million, Maloney ruled during sentencing hearings in Kalamazoo.

The case is uncomplicated, Assistant U.S. Attorney Hagen Frank wrote in court documents. The defendants developed and maintained a nationwide business that was staffed almost exclusively with illegal aliens and, as a result of that work force composition, they made themselves rich by evading their collective legal obligation.

Federal prosecutors worked for years to disband the ring of illegal activity that started with immigration agents investigating fake green cards in 2003. The company contracted at more than 100 major hospitality venues.

The case attracted national attention as authorities trumpeted dismantling the conspiracy and saying such crimes feed a national immigration and security problem.

Investigators also found a state employee, Juanita Schlagel, of Williamsburg, was using her job at Michigan Works to sell fraudulent legalization papers for some workers at the Grand Traverse Resort.

Court documents show Rosenbaum started employing illegal aliens while building the business he started in 1978. Flocken and Cunningham, who bought an equal partnership in 1992, were complicit.

Rosenbaum's attorney, Benjamin Gluck, said the employment issues began as a survival mechanism, paying cash to homeless workers. Gluck said in court documents Rosenbaum didn't engage in behavior such as stiffing workers or paying less than minimum wage.

"Mr. Rosenbaum showed a generosity that is quite unusual," Gluck wrote.

Send e-mail to the author: nreens@grpress.com

The case is uncomplicated, Assistant U.S. Attorney Hagen Frank wrote in court documents. The defendants developed and maintained a nationwide business that was staffed almost exclusively with illegal aliens and, as a result of that work force composition, they made themselves rich by evading their collective legal obligation.

This is a great example of what is going on in this country. I am very pleased that these cheaters were prosecuted, convicted and will do jail time. Let this be a message to all the other scum bags out there.

Ha ha! IA employers going to serve real jail time.
Good.

osenbaum's attorney, Benjamin Gluck, said the employment issues began as a survival mechanism...

Isn't that what drug dealers, bank robbers, sex workers, etc. say also???

It's the actions of criminal employers such as this along with a conspiring government that has allowed illegal immigration to become the cancer it now is.

I hope they rot in prison!

You would think that this problem is something that the Federal Government would want to stop. Not only are the illegals not paying but neither are the employers. Our tax base is shrinking, just for this reason.

I had just sort of a tangential thought about this...

What if, instead of ICE going after the largest and most egregious cases, they were to focus on small operations? My twisted reasoning goes like this: the prosecutions would like be easier to execute and cheaper, word of mouth will travel faster in local communities (always closest to the problem in 'real' terms) and all that would yield faster actual effects on the ground.

Relying upon high-profile operations against the 'big fish' may yield 'example' cases, which can be very good, but these take a long time to prepare and execute and are very expensive in terms of humanpower and budget requirements.

...Just a thought.

Hope they send them lots of cell mates

Hope they send them lots of cell mates

Since these two have demonstrated an affinity for illegal invaders, I hope both can be accomodated with an illegal invader bunkmate. I would hate to deny them the opportunity to experience the wonderful family values the illegals are notorious for.

Watch Jorge jump in and pardon them.

Great news, cant wait to put this on the homepage

W