The two brothers, Kenny Poh, 43, and Tiang Heng Poh, 50, who both own Chinese restaurants in the resort, were speaking outside Mold Crown Courts after the charges against them were all thrown out on Tuesday.
They said that while they were glad justice had been done, their reputations and businesses had been tarnished unnecessarily.
Inside court, Judge Philip Hughes said that he was greatly concerned about the quality of the investigation and refused to let "hearsay" evidence be produced by the prosecution.
He said more investment should have been made in the gathering of evidence and said that the prosecution had been left desperately trying to patch up an ailing case instead of relying on much better evidence which could have been available to it.
The court heard that the brothers were charged with providing employment and accommodation to nine people alleged to be illegal immigrants, which assisted in the breach of immigration laws.
The nine were among 16 people arrested by immigration officials at two Dragon Boat restaurants in Rhyl and one in Ruthin before Christmas.
The judge said that the nine people involved in the nine charges upon which it was intended to have a trial had been interviewed, bailed and had since all disappeared and were not available to give evidence for either side.
There was no record of their interviews available, alleged admissions could not be relied upon because of language and translation difficulties, and there was no record of how information about their status had been gathered.
The prosecution also wished to rely on claims that none of the workers had National Insurance Numbers but the defence had in two cases proved that evidence to be wrong, which put a question mark on the remainder of the evidence.
Judge Hughes said that no doubt resources were scarce and choices had to be made, but he said perhaps there should have been more investment in evidence gathering in the case.
Following the ruling, prosecutor Gordon Hennell offered no evidence and Kenny Poh of High Street, Rhyl was cleared of seven counts of breaching immigration law and Tiang Heng Poh of Queen's Street, Rhyl, was cleared of six charges.
Lawyers for the defendants said it was their case that they had no idea that people working in the restaurants were in the UK illegally and the quality of the prosecution evidence meant that they could not have a fair trial.
Statements from some of those arrested had been secured by the defence and the judge ruled that they would have been admissible in the interests of justice.
After the hearing, the brothers said that their reputations had been tarnished unnecessarily.
In a statement, they said: "We have been on bail for many months, our assets were frozen and our possessions seized. Our names have been dragged through the courts and the media.
"We were totally innocent and it has been made clear but the judge today that the investigation was woefully inadequate and the prosecution was based on second hand evidence.
"The prosecution has now offered no evidence against us and we can leave court without a stain on our characters. But it has affected our businesses and our lives terribly."
Kenny Poh said that while he was "delighted and relieved" by today's result, they had never committed any crime.
"This has put a great deal of pressure on our lives. I have been really depressed during this time," he said.
He said that he had been unable to continue running Dragon Boat One because his accounts had been frozen and the business had been taken over by someone else.
It was a shame because they had built up good businesses which supported the local community and they had sponsored local organisations and raised money for charity, he said.
He said that while he used to own the Dragon Boat in Ruthin, that had absolutely nothing to do with the case.
Tiang Poh said that he could not continue running the Dragon Boat Two business after what had happened. "I had been fully booked for Christmas but they all cancelled," he said.
"Business fell so much following the publicity given to our arrests that I just could not carry on," Taing Poh, who now uses his experience to help other people set up their businesses, explained.
"The business disappeared and that really hurt me and makes me angry. If I had done anything wrong then I would hold my hands up. They made us look like villains when we were not.
"We were innocent from the start. I did not work in the black market at all. I had the details of all the works NI numbers, everything went through the books and gave them to the accountant."