A grand jury in Orlando last week indicted four Honduran nationals for allegedly operating an off-the-books cash payroll scheme for construction workers that defrauded workers’ compensation insurers and avoided payroll taxes.
Iris Villafranca, Mario Flores, Osman Zapata, and Cristofer Oseguera Giron, all living in Orange County, Florida, were charged with conspiracy to operate an unlicensed money transmitting business and conspiracy to defraud the United States, the U.S. Department of Justice said in a posting last week. Villafranca was also charged with conspiracy to commit wire fraud and with filing false tax returns.
The indictment, seen here, contends that the four employed a familiar scheme in the construction business, in which thousands of undocumented immigrants are employed across the country. From 2015 through 2022, the group used shell companies to run an unlicensed check-cashing service that cashed some $89 million in checks from subcontractors.
“The defendants allegedly defrauded workers’ compensation insurance companies by leasing their certificates of insurance to contractors, and by providing false and fraudulent information to the insurers about, among other things, the number of workers covered by the insurance and the amount workers were paid,” the DOJ said in a statement.
The system used multiple shell companies, according to the indictment, including: MZA Construction, ADD Remodeling Services, FAR Remodeling Services, ODZ Renovations, and EZM Remodeling, all of which were registered with the Florida Department of State.
Villafranca, the alleged ringleader, was arraigned last week. She pleaded not guilty and was kept in custody of the U.S. Marshals Service, court records show. If convicted of the charges, Villafranca could face up to five years in prison for the unlicensed money transmitting business charges, and a maximum penalty of 20 years for wire fraud, and more prison time for tax fraud.
Topics
Florida
Workers’ Compensation
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