Prosecutors tie illegal workers to international crime syndicate

NORFOLK

The 22 suspects charged in a widespread immigration fraud conspiracy case are linked to an organized crime ring that has tentacles throughout Eastern Europe and Russia and across the United States, prosecutors said this week.

"The organization has not been totally dismantled," Assistant U.S. Attorney Joseph E. DePadilla told a magistrate judge Friday during bond hearings for 13 defendants.

The operation was run from the former Soviet bloc country of Belarus by Viktar Krus, one of the 22 charged in the case, DePadilla said in a court filing. Krus owns a home in Virginia Beach but spent a lot of his time in his native country. Federal agents said they intercepted 20,000 phone calls, many to and from Eastern Europe.

"This investigation focused on the defendants' activities as part of an international organized crime entity," DePadilla said in the court papers.

DePadilla and other federal prosecutors declined to discuss the organized crime link any further, citing an ongoing international investigation.

During one bond hearing, DePadilla described suspect Piotr Baravik as Krus' lieutenant, in charge of arranging the placement of workers at seven Oceanfront hotels and several restaurants, and then diverting them to other states.

Like several other defendants, Baravik was granted asylum based on his sworn statements that he would be persecuted in Belarus for being part of a youth political opposition group called Zubr. DePadilla said intercepted phone calls indicated they all lied about their involvement in the group.

Two magistrate judges hearing the cases Friday denied bond for 12 of the 13 defendants. Krus' hearing was postponed to Thursday. Some already have had detainers placed on them by U.S. Immigration and Customs Enforcement, which starts the deportation process.

Most of the remaining defendants were either arrested in other jurisdictions or released on bond already. One or two remain at large, authorities said.

A trial date was set for March 14, but prosecutors said that would be postponed given the complexity of the case.

The ring is believed to have generated $11 million in revenue over the past eight years by bringing in immigrant labor to work at hotels, restaurants and railroad yards, including one in Petersburg.

The suspected ring leaders moved workers around to jobs they were not authorized to work at, paying the immigrants low wages and withholding rent and taxes. Prosecutors say no employment taxes were paid, however, causing a loss to the government of about $5 million.

Of the estimated $11 million generated by the ring, federal authorities said, they have recovered only about $50,000. The rest of the money was transferred to locations in Eastern Europe, prosecutors said.

Co-conspirators talked of opening businesses in Belarus, developing apartment complexes and shipping American cars overseas, according to court papers.

Krus and his managers ran the operation through more than 10 shell companies located in small office buildings or apartments, mostly in the Birdneck Road area of Virginia Beach north of the interstate.

A Virginian-Pilot reporter visited most of those addresses this week and discovered empty offices and vacant apartments. Some appeared to have had their doors smashed in during raids by federal authorities. Search warrants in the case remain under seal.

In recent years, as the alleged leaders of the organization brought in hundreds of immigrants, local staffing agencies became increasingly suspicious of the workers. Those local agencies frequently got shut out by hotels, mainly at the Oceanfront.

"It's been an issue from my perspective as a staffing agency," said Ross Rogers, who owns Premier Staffing Solutions in Virginia Beach.

"I wish I was able to place more housekeepers with the hotels down at the Beach," he said.

He said he has a pool of 200 to 300 Americans, most of them living in Norfolk, who could work at the Oceanfront hotels, but they have no transportation to get there. And besides, the hotels seem to prefer foreign workers, he said.

"The hotels' perception is they get better workers from overseas," he said.

He said he has been aware that hotel managers signed contracts with vendors, such as the ones run by Krus, that overstated the number of employees needed. He believed that the additional workers, when they arrived here from overseas, would then be shifted to jobs in other states.

According to the indictment, that's what Krus and his team were doing, shifting workers to Florida, Tennessee, Illinois, Alabama, Louisiana, California, Missouri and Mississippi. Federal agents said they also arrested illegal immigrant workers in St. Louis linked to this ring.

Tim McGlone, (757) 446-2343, tim.mcglone@pilotonline.com