Federal prosecutors have indicted four Honduran nationals for allegedly operating an illegal cash payroll system that facilitated the employment of undocumented workers and evaded millions in payroll taxes in Florida’s construction industry.
A federal grand jury in Orlando, Florida, returned an indictment last week charging Iris Villafranca, Mario Flores, Osman Zapata, and Cristofer Oseguera Giron with conspiracy to operate an unlicensed money transmitting business and conspiracy to defraud the United States. Villafranca faces additional charges of conspiracy to commit wire fraud and filing false tax returns.
According to the indictment, the defendants allegedly used shell companies from 2015 to 2022 to run an unlicensed check cashing and cash courier service that processed approximately $89 million in checks from construction subcontractors. The operation allegedly charged a percentage fee for cashing these checks, which subcontractors then used to pay workers off the books.
Scheme facilitated employment of undocumented workers
Prosecutors allege this arrangement allowed construction contractors to pay workers in cash without proper payroll tax compliance or verification of work authorization status. The defendants allegedly filed false tax documents with the IRS to conceal the scheme while making minimal employment tax deposits.
The indictment further claims the group defrauded workers’ compensation insurance companies by leasing their insurance certificates to contractors and providing fraudulent information about workforce size and compensation.
Significant penalties possible
If convicted, Villafranca could face up to 20 years in prison for conspiracy to commit wire fraud, five years for conspiracy to operate an unlicensed money transmitting business, five years for conspiracy to commit tax fraud, and three years for each count of filing false tax returns.
Flores, Zapata, and Giron each face a maximum penalty of five years for conspiracy to operate an unlicensed money transmitting business and five years for conspiracy to commit tax fraud.
Acting Deputy Assistant Attorney General Karen E. Kelly of the Justice Department’s Tax Division and U.S. Attorney Gregory W. Kehoe for the Middle District of Florida announced the charges. The investigation was conducted by IRS Criminal Investigation with assistance from Homeland Security Investigations.
The case is being prosecuted by Senior Litigation Counsel Sean Beaty and Trial Attorneys Kavitha Bondada and Rebecca A. Caruso of the Tax Division, along with Assistant U.S. Attorney Amanda Daniels for the Middle District of Florida.
An indictment contains allegations only, and all defendants are presumed innocent until proven guilty beyond a reasonable doubt in a court of law.
