12 sentenced in employment tax fraud case | Community

FLORENCE, SC – Twelve defendants have been sentenced for employment construction fraud related felonies and crimes related to seven unauthorized aliens in the largest criminal Internal Revenue Service operation in the Pee Dee region.

The convictions are the first to come from an expansive multiyear undercover investigation into the Myrtle Beach area and throughout the South Carolina coast by the IRS and Homeland Security Investigations.

The operation targeted those in the construction industry who used unlicensed check casters to facilitate under-the-table cash payments to employees, many of whom were unauthorized aliens.

The check cashers will also provide certificates of insurance falsely stating that the employees were covered under workers’ compensation insurance.

These off-the-book payments defrauded employees of applicable employment taxes outside the United States. At least $ 15 million in checks were cashed by these defendants, resulting in millions of dollars in total losses to the government. Based on the investigation, at least tens of millions of dollars of tax losses have occurred throughout the South Carolina coast because of similar schemes.

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“These defendants stole money from South Carolina taxpayers, they stole opportunities from those in the construction industry who did the right thing, and they stole safety from workers who labored on jobs without insurance,” said U.S. Attorney Corey F. Ellis. “This successful prosecution was possible only because of the tireless and dedicated investigative efforts of the IRS and HSI, as well as the work of our local partners. The defendants in this case, none of whom had criminal records before this investigation, are all now convicted felons. Many face potential deportation, many have lost their homes and face financial ruin and many will never be able to return to the work they spent their lives pursuing. This case should be a message to businesses and individuals who try to get ahead by breaking the law: It is not worth it because we are watching you and we will prosecute you. “

“Unscrupulous businesses who will skirt their tax and legal workforce obligations must be held to account,” said IRS CI Special Agent in Charge Donald “Trey” Eakins. “Employers who deliberately deflect these obligations under what obligations are paid to payroll taxes and other fees in the US government, in addition to creating an unfair economic advantage over law-abiding business owners who play by the rules.”

“Criminals that exploit not only the workers to take advantage of labor and tax laws, but they also generate steal revenue from the government, while also creating an unfair business advantage over their competitors,” said Special Agent in Charge Ronnie Martinez, who oversees. HSI operations in North Carolina and South Carolina. “Thanks to the great work done by our agents along with our state, local and federal partners we were able to stop this criminal organization from defrauding the government and hurting the local economy.”

Evidence presented to the court showed that beginning around late 2018, the IRS and HSI began jointly investigating the practice of illegal check cashing in the construction industry in the Myrtle Beach area and other regions along the South Carolina coast. In approximately 2019, various IRS undercover agents embedded themselves in the Myrtle Beach area and recorded multiple interactions with various defendants’ companies.

Specifically, certain construction companies would use check cashers so that they could hire unauthorized aliens and avoid paying employment taxes on their workers.

To facilitate the scheme, a member of the construction company will meet with an unlicensed check casher in places like retail stores or coffee shops for parking lots.

The construction company would give the check casher a business check made out of a certain amount of cash the company had made the check casher, and the check casher would give the construction company representative a bag of cash that would be used to pay the employees. In exchange for their services, the check casher held back a fee of about 3%.

To make it appear like employees had valid insurance on job sites, the check casher would also provide a certificate of workers’ compensation insurance that was not actually valid for any of the construction company’s employees. The parties agreed that the check casher would, on paper, claim to be a subcontractor who provided the employees and provided insurance. However, the parties knew that the check casher provided no other services or employees to the construction company. The check casher only provided a way to hide the true nature of the scheme, to allow the construction company to hire unauthorized aliens, and to pay workers with untaxed cash.

Chief United States District Judge R. Bryan Harwell sentenced each of the defendants to five years’ probation, with all but one sentenced to home confinement. Further, the court ordered each defendant to pay restitution as a result of the tax losses they incurred.

The court imposed the probation sentences largely because the defendants admitted guilt early, agreed to assist authorities, paid collectively about $ 3 million dollars to restitution in the IRS, and agreed as a condition to the probation to make monthly payments – In most cases substantial payments – until the IRS is made whole. The following Defendants from the relevant companies were sentenced in the case:

Daniel Lavoie Construction Services (4: 21-cr-00585)

Daniel A. Lavoie, 49, of Conway: Five years’ probation, 18 months home confinement with location monitoring, and $ 293,402.50 in restitution

Enrique R. Reyes, 48, of Conway: Five years’ probation, 18 months home confinement with location monitoring, and $ 293,402.50 in restitution

Duran Masonry (4: 21-cr-00584)

Walter A. Duran, 45, of Myrtle Beach: five years’ probation, 21 months home confinement with location monitoring, and $ 976,076.08 in restitution

Lisa Caulley Sellers, 57, of Myrtle Beach: Five years’ probation, eight months of home confinement with location monitoring, and $ 488,038.04 in restitution

Extreme Siding (4: 21-cr-00595)

Ming Xue Nan, 52, of Myrtle Beach: Five years’ probation, 14 months home confinement with location monitoring, and $ 173,712.43 in restitution

Katherine L. Welker, 39, of Myrtle Beach: Five years’ probation, eight months of home confinement with location monitoring, and $ 173,712.43 in restitution

Master Homes Calabash (4: 21-cr-00581)

Josafa P. Neto, 43, of Myrtle Beach: Five years’ probation, 18 months home confinement with location monitoring, and $ 209,847.07 in restitution

Marylany Hardman Levino, 36, of Myrtle Beach: Five years’ probation and $ 209,847.07 in restitution

Metro Concrete Finishers (4: 21-cr-00594)

Saul Prieto, 56, of Myrtle Beach: Five years ‘probation, nine months’ home confinement with location monitoring, and $ 74,868.50 in restitution

Martha E. Zarate, a / k / a Martha E. Prieto, 54, of Myrtle Beach: five years’ probation, nine months home confinement with location monitoring, and $ 74,868.50 in restitution

Master Homes Design Center (4: 21-cr-00582)

Marcos Caetano De Almeida, 45, of Myrtle Beach: Five years’ probation, 21 months home confinement with location monitoring, and $ 298,816.52 in restitution

Paint By Numbers (4: 21-cr-00583)

Johanna A. Carpio, 38, of Myrtle Beach: Five years’ probation, 14 months home confinement with location monitoring, and $ 131,449.69 in restitution

Each of the 12 defendants pleaded guilty to charging an information charge with a felony count of conspiracy to defraud the United States and one misdemeanor count of unlawful employment of aliens.

This case was investigated by the IRS and HSI, with assistance from the Myrtle Beach Police Department. Assistant US Attorneys Derek A. Shoemake and Carrie Fisher prosecute the case.

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