Agents raided 14 7-Eleven stores on Monday and arrested most of the defendants. They are accused of hiring more than 50 undocumented immigrants from Pakistan and the Philippines, paying them using stolen identities and stealing most of their wages.
"These nine defendants created a modern-day plantation system, with themselves as overseers, with the immigrant workers as subjects, living in their version of a company town," U.S. Attorney Loretta Lynch told a news conference in Brooklyn.
Immigration and Customs Enforcement agents were executing search warrants at more than 40 other stores across the country suspected of similar infractions, authorities said.
Federal indictments naming eight men and one woman allege that since 2000 they employed more than 50 immigrants who didn't have permission to be in the U.S. They tried to conceal the immigrants' employment by stealing the identities of about two dozen people - including those of the child, the dead and a Coast Guard cadet - and submitting the information to the 7-Eleven payroll department.
When 7-Eleven's headquarters sent the wages for distribution, the employers stole up to 75 percent of the workers' pay, authorities said.
"This case came to light because some of these defendants, despite their lack of legal status, came forward to report the exploitation," Lynch said.
7-Eleven said in a statement, "7-Eleven, Inc. has cooperated with the government's investigation. All of our franchise owners must operate their stores in accordance with laws and the 7-Eleven franchise agreement."
The company went on to say it "will take aggressive actions to audit the employment status of all its franchisees' employees."
Four defendants who hold both U.S. and Pakistani citizenship belong to a family that has participated in social events with Pakistan's former military ruler Pervez Musharraf, prosecutors said in court papers.
Immigration officials detained 18 workers, including some who first notified authorities about the alleged fraud in 2010. Lynch said the workers would be processed through the system, with some who served as whistleblowers being able to remain in the country while the case is prosecuted.
The Associated Press contributed to this report.
