What started as a tax fraud investigation of a Dayton businessman has escalated into a complex federal criminal case involving human trafficking and exploitation.
Gregory Oldiges, who owns Williams Brothers Roofing and Siding Co., Inc., and employee Jim Honious are accused in U.S. District Court documents of a years-long conspiracy of recruiting, transporting and using illegal immigrant workers from Mexico, falsifying documents and wire fraud.
“This is a rare combination of multiple crimes,” said Fred Alverson, public affairs officer of the United States Attorney’s Office for the Southern District of Ohio. “When you get insurance fraud, ID theft and employment of illegal aliens thrown into one case, that’s pretty rare that we do something like that.”
There is a plea agreement hearing tentatively set for Dec. 16, Alverson said. The alleged crimes are punishable from probation up to 25 years in prison.
Prosecutors allege that between 2009 and 2012, Williams Brothers charged its customers about $11.75 million for roofing-related work performed by its illegal immigrant subcontractors, for which Williams Brothers paid the illegal immigrants about $1.7 million, according to court documents.
Prosecutors also claim Williams Brothers encouraged and transported illegal immigrant workers into the country and defrauded insurance providers with “dummy” or duplicate invoices.
“The allegations are that they not only that they hired the illegal residents, but then wanted to find a creative way to write off the expenses against their income and defraud insurance companies in the process,” Alverson said. “The allegation also is that, in order to try to make it look somewhat legitimate, that they would just assign Social Security numbers for them, which in many cases, belonged to other individuals.”
Prosecutors also allege:
• Between 2004 and 2013, Williams Brothers entered into at least 39 purported subcontracts with illegal immigrants, some of whom used false names with the knowledge of Oldiges or other employees.
• Between 2004 and 2012, Williams Brothers employees prepared and submitted to the IRS approximately 20 materially false 1099 forms that identified the illegal immigrant subcontractors with known false names. The forms also noted payments to the subcontractors of about $1.1 million.
• In April 2007, a Williams Brothers employee — authorized and paid for by Oldiges — drove to Texas to pick up an illegal alien subcontractor and his crew and drove them back to the Dayton area. That same month, Oldiges authorized $9,000 to be paid to human smugglers (“coyotes”) who brought the crew from Mexico to Texas. The cost for each illegal worker was $1,000 per immigrant. Oldiges then recouped that money by withholding a portion of the amount paid to the crew during that roofing season.
Other alleged schemes were carried out in 2008 and 2011. For example, in November 2010, Oldiges paid an illegal worker crew $3,706 while charging the customer $18,869. The $15,163 difference represented Williams Brothers’ materials cost and gross profit, according to court documents.
The government seized property and money from Oldiges and his wife, Linda, after it claimed in an April lawsuit that the couple had generated millions of dollars of profit on the backs of Mexican workers they conspired to bring to the United States. The government seized bank accounts worth nearly $2 million, a half-million dollar Beavercreek home and a pickup truck from Oldiges and his wife. A plea agreement likely would cover both the civil and criminal cases.
In the lawsuit, the government claimed that Williams Brothers, founded in 1937, made between $3 million to $4.5 million in 2012 during a time in which the company paid one worker $1 per hour to pick up nails at job sites as he recovered from injuries he sustained when he fell off a roof.
Neither Oldiges’ attorney, former U.S. District Attorney Greg Lockhart, nor Honious’ attorney, Steven Pierson, returned messages seeking comment.
Immigration and Customs Enforcement (ICE) Public Affairs Officer Khaalid Walls ICE declined to comment on the case. But Walls said Homeland Security Investigations (HSI) has made 451 criminal arrests tied to workforce enforcement investigations. Of those arrested, 179 were owners, managers, supervisors or human resources employees. So far this year, HSI barred 277 businesses and individuals for administrative and criminal violations.
“Inspections are one of the most powerful tools the federal government has to ensure that businesses are complying with U.S. employment laws,” Walls said.
In fiscal year 2013, HSI initiated audits involving 3,906 employers and issued 651 final fine notices totaling nearly $16.7 million to employers, a nearly $5 million increase from fiscal year 2012.
The International Labour Organization (ILO) estimates that 21 million people are victims of forced labor that lead to vast illegal profits for individuals or organizations that use such labor. The ILO said that domestic work, agriculture, construction, manufacturing and entertainment are the sectors where forced labor is most frequently found.
United States District Court statistics show that less than 3 percent (2,733) of the 98,845 cases in 2012 dealt with immigrant smuggling, while even fewer cases dealt with tax fraud and wire fraud.