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The way the letter is worded, it could be construed as extortion; ie, pay me to keep quiet or I will report you. You should send a follow-up letter indicating that the previous letter was written with the intent of collecting monies owed by the employer, including wages, and that given the employer's attempt to have criminal charges brought against you, you will be reporting the employer to the appropriate authorities for assistance in recovering the amounts you are owed.
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