Lawrence contractor charged in scheme to pay undocumented workers

United States Attorney Barry Grissom announces charges in a money laundering case involving a Lawrence business owner, Thursday, March 19, 2015, in Kansas City, Kan.

? A Lawrence contractor and five others have been charged in a scheme to pay undocumented workers in an investigation that stems back to 2012, U.S. Attorney Barry Grissom announced Thursday.

A grand jury indicted Keith L. Countess and the five men this week on charges of money laundering, bank fraud and harboring undocumented workers.

Countess and the men took part in a scheme to convert $13 million in payroll checks into cash to pay crews of undocumented workers who install drywall in the Kansas City metro area, Grissom said during a press conference at the Robert J. Dole Federal Courthouse.

The case is unusual, Grissom said, because authorities have decided to target owners of businesses and others involved in hiring undocumented workers to work for low pay and no benefits.

The money flowed through a so-called illegal pipeline with subcontractors at one end who want cheap labor and undocumented workers at the other end who are poor and need work to feed their families.

“We thought there has to be a better, more humane, and from the taxpayers’ standpoint, a more effective way to address this problem,” Grissom said. “We have targeted what we believe is one of the major focuses that is driving our illegal immigration problem, which is employers who knowingly hire undocumented workers.”

In addition, Grissom said, companies that hire undocumented workers “have an unfair competitive advantage against those folks who do play by the rules.”

Grissom said he considered the undocumented workers to be victims. He did not charge them with crimes.

Grissom filed 31 charges against the men as well as a criminal forfeiture case.

Those charged in the indictment are:

• Keith L. Countess, 55, owner of Lawrence-based Plaster Masters, 619 N. Second St., who has been charged with money laundering, bank fraud and harboring undocumented workers.

• Marcos Lane Stubbs, 44, who is alleged to have devised the scheme for subcontractors to use undocumented workers.

• Luis Felipe Guerrero-Guerrero, 26, Jose Felipe Hernandez-Calvillo, 39, and Mauro Papalotzi, 34, all alleged to have managed crews of workers installing drywall.

• Isaac Gallegos, 35, alleged to have allowed the scheme to operate from his Boost Mobile store in Olathe.

All but Gallegos appeared in court for first appearance and arraignment in Kansas City, Kan. Gallegos was scheduled to appear in federal court Thursday in Wichita, said Jim Cross, Grissom’s spokesman.

At least three of the men are Mexican citizens with little education. One man testified through an interpreter that he has a third-grade education.

Countess’ wife and son watched as he answered questions posed by Chief Magistrate Judge O’Hara.

Countess had already received an appointed attorney, but O’Hara asked if he couldn’t afford to pay his own. His lawyer responded saying several of Countess’ bank accounts had been frozen.

O’Hara countered, asking whether Countess owned his home free and clear. Countess said yes.

O’Hara noted the home was valued at $300,000, so he asked Countess to consider taking out a loan.

Countess and the other men all pleaded not guilty and were released on their own recognizance.

After being released, Countess was waiting outside the courthouse for his wife and son, he told the Lawrence Journal-World.

“This is all new to me,” Countess said when asked for a comment. “I’ve pleaded not guilty.”

He and his lawyer said he would have no further comment.

During the press conference, Grissom said a seventh man, Jose R. Torres-Garcia, was at the center of the scheme. Torres has already pleaded guilty in a related case to one count of harboring undocumented workers and one count of operating an unlicensed money transmitting business.

The indictment said Torres-Garcia acted as a financial intermediary between drywall subcontractors, and drywall construction crews made up of mostly undocumented workers. Gallegos, the cellphone store owner, and Stubbs described the scheme to Torres-Garcia.

According to the indictment, Torres-Garcia operated out of Gallegos’ store and borrowed $1,400 from him to begin the venture, the indictment said.

Between October 2012 and October 2014, checks made payable to a company established by Torres-Garcia totaling about $13.2 million were deposited in bank accounts in Olathe, the indictment said.

The indictment said Countess told one crew leader in front of witnesses more than once that “he knew the leader was a wetback,” a derogatory term for illegal immigrants.