Alexandria Men Plead Guilty In Fraud Scheme Involving Goodwill

ALEXANDRIA, VA — Two men pleaded guilty in federal court Thursday in a fraud scheme involving the employment of unauthorized immigrants and defrauding Goodwill of Greater Washington.

Alaa Nimr Garada, 57, and Rafik Moheyeldin, 65, of Alexandria, operated WTC2, Inc., which purchased and resold used goods such as clothing and shoes. It contracted with charities like Goodwill of Greater Washington to set up donation bins with the charities logos. The business resold clothing to people along the U.S.-Mexico border and exported items to people in Africa, Asia, and South America.

Although WTC2 was allowed to keep donated items in the bins, it couldn't take goods under the contract if Goodwill stores needed some. Prosecutors say the men told WTC2 employees to remove Goodwill's logo and replace it with the logo of a charity supporting military families. This was done without the military charity's permission.

Prosecutors say workers were mostly unauthorized immigrants from 2012 to 2016, and therefore the work didn't involve payroll taxes and employment benefits. The workers also did not receive proper overtime pay and adequate workers' compensation insurance, according to prosecutors. One case involving a worker's foot being run over by a forklift resulted in no benefits from WTC2 or an insurance company.

Court documents say Garada falsified tax returns to hide the fact that most of the workers were unauthorized immigrants. From 2013 to 2016, the business employed around 50 unauthorized immigrants from 2013 to 2016, but the tax returns falsely claimed WTC2 had only one worker. In 2014, the business was believed to have a gross annual income around $8 million.

"WTC2’s practice of relying on the labor of unauthorized immigrants provided WTC2 with a significant competitive advantage and resulted in substantial financial gains for Garada and Moheyeldin," reads a news release from the U.S. Attorney’s Office for the Eastern District of Virginia.

Each man pleaded guilty to two counts of unlawful employment of unauthorized immigrants and one count of wire fraud. Garada also pleaded guilty to filing a false tax return. The men agreed to forfeit around $3.9 million as part of the plea agreement. This amount represented illegal proceeds they earned from the fraud scheme.

The men face up to 20 years in prison and will be sentenced on June 26.