CHICAGO (JGL) – A family franchise owner of 13 7-Eleven convenience stores in New York and Virginia was ordered by the court placed behind bars for 87 months (7.3 years) and pay $2.6-million in restitution for exploiting 115 undocumented employees, many of them Filipinos, using stolen identities and “misappropriating significant portions of the aliens’ wages for his family’s own use and by requiring the illegal aliens to reside in residences that defendants owned and controlled.”
Farrukh Baig, a U.S. citizen of Head of Harbor, New York, had pleaded guilty to count one (1) conspiracy to commit wire fraud and count two (2) conspiracy to conceal and harbor aliens for financial gain. Judge Sandra J. Feuerstein of the United States District Court of Eastern District of New York imposed 87 months of imprisonment for each count on Baig that will run concurrently.
Baig was also ordered to forfeit $5-million money judgment and all rights, titles and interests of all his store franchisees and all 220 jewelry items seized from his safe deposit box held in his name and Malik Yousaf and Mehnaz Yousaf.
Baig’s sister, Shannawaz Baig, also a U.S. citizen, of Virginia Beach, Virginia, whose sentencing last July 22, 2015 was deferred because she was celebrating Ramadan during the week of July 20, 2015, will be up for sentencing on Sept. 10, 2015. Shannawaz helped her brother in operating the 7-Eleven franchisees.
Ramon Nanas, 51, a Filipino citizen, of Great River, New York, who also helped Baig operate the convenience stores, was sentenced on Count One (1) of the superseding information to 16 months (1.3 years) imprisonment with three years of supervised release and ordered to pay a restitution of $1.5-M ($1,501,626.80).
Baig’s wife, Bushra Baig, also a US citizen of Head of Harbor, co-owner of Farrukh Baig Stores, who was detained since her arrest on June 17, 2013, was sentenced to time served with five years of supervised release on Count Two (2) of the indictment and was ordered to pay a restitution of $2,621,114.97.
Zahid Baig, brother of Farrukh, also a U.S. citizen, of Chesapeake, Virginia, who also managed Farruck Baig Stores, was also sentenced to time served with three-year supervised release on Count Two (2) of the indictment and ordered to pay restitution of $2,621,114.97.
Tariq Rana, a Pakistani citizen, also of Chesapeake, Virginia, a store manager of 7-Eleven franchisees, was sentenced to time served with three year supervised release on one superseding information and was ordered to pay restitution of $1,253,343.48 and $100 assessment fee.
The seventh conspirator, Malik Yousaf, also a U.S. citizen of South Setauket, New York, who occupies one of the highest positions along with Farrukh Baig in the franchisees and had earned “millions of dollars from this fraud, bears the “greatest responsibility for this criminal conspiracy,” is going to be sentenced on Sept. 10, 2015 after he pleaded guilty to conspire to send false payroll information via wire across state lines to conceal employment and harboring illegal aliens.
YOUSAF WAS “CHIEF OPERATIONS OFFICER”
Yousaf acted as “chief operations officer” for various stores and was in-charge of the expansion of the scheme and its profits and has “day-to-day” control of the operation.
Court records showed that Malik Yousaf and Farrukh Baig possessed broad supervisory authority over several stores. “Farrukh Baig, Bushra Baig and Malik Yousaf, unlike the mere managers who have already been sentenced, earned millions of dollars from this fraud.
They targeted dozens of immigrant employees and innocent identity theft victims.
Bushra Baig was required by her husband’s Seven Eleven, Inc. (SEI) to meet with SEI employees at the stores that she owned at least once every week. At those meetings, Bushra Baig was required to demonstrate managerial knowledge of her stores and exercise managerial powers to enact SEI’s directives.
Records showed that between January 2000 and June 2013, Farrukh Baig, Bushra Baig and Malik Yousaf directed and controlled the employment of dozens of illegal aliens at the 7-Eleven, Inc. (SEI) stores. These alien employees possessed no legal right to work in the U.S.
The hiring of illegal aliens was “purposeful” as they could pay them “less and further keep part of the illegal aliens’ wages for themselves.
Yousaf and the store managers knowingly used the stolen identification information of at least 25 persons to conceal their employment of the illegal aliens.
They “inputted the stolen identity information into SEI data terminals in lieu of the true identity information of the illegal aliens. The stolen identity information was then submitted electronically to SEI (Seven & I Holdings at the main headquarters in Dallas, Texas) for processing and wage payment.
Yousaf and the store managers kept custody of the illegal aliens’ SEI-issued checks and debit cards. Instead of distributing full wages of the illegal aliens, Yousaf and other managers “kept significant portions of those wages for themselves and distributed the remainder to the illegal aliens in cash.”
The conservative combined losses to the illegal aliens were placed at $1,253,343.48. The bulk of the profits went to Farruck and Bushra Baig “based on their very low labor costs and the rents” for 13 years.
Yousaf and store managers concealed and harbored the illegal aliens at private residences that Farrukh and Bushra Baig owned and controlled near the 7-Eleven stores.
They charged the aliens rental fees and deducted fees from their paychecks before paying them and withheld their paychecks and other earnings, paid them less than the minimum and failed to pay them overtime wages.
With regard to wire fraud, Farrukh and Bushra Baig, Yousaf, Zahid Baig, Shannawaz Baig, Ramon Nanas, Tariq Rana and others knowingly employed 115 illegal aliens to work for the stores. The stolen identities of more than 25 actual people were transmitted to SEI Dallas for payroll processing as well as to the Internal Revenue Service (IRS), “causing tax issues for the true owners of the stolen identities.”
Aside from payroll service, the Farrukh Stores also benefitted with line of credit and store transfer election option from the SEI Dallas headquarters.
From 2007 to 2012, the Farrukh Stores generated $6,197,120.18 in profits by exploiting and underpaying the illegal aliens and approximately $35-M in profits since 2000 and grossed more than $100-M during the period.
Farrukh and Bushra Baig came from another country but enjoyed success “upon the backs of their victimized workers that “do not weigh toward a reduced sentence.”
Their employment crimes caused “severe social harm, diminished individual Americans’ faith in the fundamental right to earn a fair wage for a fair day’s work,” U.S. Attorney Loretta E. Lynch told Judge Feuerstein.
The restitution of $2,506,686.96 will payable to the employees of the stores listed in the indictment thru the U.S. Department of Labor/Wage & House Division. The Department of Labor will search for the unidentified victims for three years from the date of judgment and distribute the restitution funds. After three years, the remaining balance of the restitution funds will inure to U.S. Treasury but the Department of Labor will still recover funds for distribution to newly identified victims.
Seven & I Holdings, based in Dallas, Texas, is the parent company, operator, franchisor and licensor of more than 49,000 7-Eleven convenience stores worldwide located in 16 countries, with its largest markets being the U.S., Japan, Canada, the Philippines, Hong Kong, Taiwan, Malaysia and Thailand. (jgli.net)