A Honduran national living US illegally has been sentenced to eight years in prison for his role in a multimillion-dollar payroll tax fraud scheme deprived the US government of tens of millions of dollars, reports the New York Post.
Get breaking news anytime, anywhere. Download the TOI app now!
Mario Flores was sentenced on Wednesday after admitting to his involvement in a conspiracy that helped businesses avoid taxes and enabled undocumented workers to be hired through an illegal cash-based system.
Flores worked with his girlfriend and others to create shell companies in Orlando, Florida, which ran unlicensed cash courier and cheque cashing services for construction contractors and subcontractors.
The scheme allowed the group to cash around $89 million in cheques between 2015 and 2022, charging a fee for their services while keeping operations off the books. The contractors then paid workers in cash without withholding payroll taxes or complying with employment laws. Flores personally benefited from at least $9.4 million in the scheme.
His girlfriend, Iris Villafranca, was sentenced in April to 17 years in prison and ordered to pay more than $38 million in restitution. Two other co-conspirators, Osman Zapata and Francisco Alvarez, also received prison sentences of four years and probation, along with financial penalties.
Flores pleaded guilty in March to one count of conspiring to defraud US and one count of conspiring to operate an unlicensed money transmitting business. Prosecutors accused him of trying to obstruct the investigation by providing fake documentation and misleading federal agents.
The sentencing memo stated that Flores “had tried to deceive investigators by handing over “fake receipt books to support the false tax returns that the shell companies had filed with the Internal Revenue Service, and produced those fake receipt books in response to the grand jury subpoenas.”
It added that he also lied to investigators during interviews with the Internal Revenue Service (IRS).
“Villafranca messaged with Flores repeatedly before he met with special agents of the Internal Revenue Service. He then lied to special agents about his and Villafranca’s role in the scheme.”
Officials said the operation was a clear example of how illegal financial networks can operate alongside undocumented labour systems.
“This case exposes how unchecked illegal immigration fuels widespread payroll tax fraud and underground economies that harm American workers and taxpayers,” Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division said in a statement.
