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November 11, 2024   A Florida roofing company owner and payroll administrator have both pleaded guilty to fraud against the IRS totaling nearly $2.5 million.   The court documents and associated statements declare that William Skaggs Jr. owned and operated Nastar Roofing, a Fort Myers roofing company. The office administrator, Billie Adkison, led the company’s payroll and other financial tasks.   Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Roger Handberg for the Middle District of Florida announced the pair’s guilty plea in their attempt to defraud the United States government. Pair plead guilty in $2.5 million IRS fraud   It is alleged that between 2013 and 2023, Nastar employees, including Skaggs and Adksion, “withdrew over $21 million from the company’s bank accounts to pay employees predominantly in cash without withholding Social Security, Medicare, and federal income taxes from those wages. They did this to avoid paying employment taxes they knew were legally required,” said the Justice Department.   Cash wages were also not declared despite Nastar using a payroll provider to record the transactions. So, when the payroll provider provided tax returns, the IRS was unaware of the unrecorded cash wages that were distributed to multiple sources.   Skaggs and Adkinson were signatories on the tax returns, and they did not inform the IRS of the additional outgoings as cash wages. So, their signatures on the payroll company and their own payroll accounts were false submissions to the government regulator.   It is presumed that the IRS lost $2.5 million in incorrect and false submissions. Both individuals will be sentenced at a later date, and they face five years in prison for the fraudulent submissions.   IRS Criminal Investigation leads the investigation into the finer details of the fraud, along with Trial Attorney Kevin Schneider of the Tax Division and Assistant U.S. Attorney Michael Leeman for the Middle District of Florida.

November 4, 2024   Tampa, Florida – U.S. District Judge William F. Jung has sentenced Wendy Cudemo (48, Orlando) to 27 months in federal prison for conspiracy to commit wire fraud. The Court also entered an order of forfeiture in the amount of $787,911.00, the proceeds of the wire fraud conspiracy and ordered the forfeiture to the United States of real property located in Palmetto, Florida. Cudemo pled guilty on July 16, 2024.   According to court documents, Cudemo owned and managed a construction company which purported to supply construction services and labor for construction contractors and subcontractors. In order to comply with Florida law, Cudemo’s company was required to secure and maintain adequate worker’s compensation insurance coverage. Her company had agreements with contractors and subcontractors to use workers purported to be Cudemo’s employees at construction sites and these workers were often undocumented aliens who were actually working for and under the daily supervision and direction of the contractors. Cudemo or others would then regularly receive “payroll checks” from contractors that were cashed at various financial institutions to pay Cudemo’s purported “employees” and other related expenses.   During the period charged, Cudemo falsely and fraudulently represented in insurance applications that her company had a very limited payroll and a very limited number of employees who worked on construction jobsites. Cudemo also falsely and fraudulently sent wire communications to numerous contractors representing that her company’s employees had full worker’s compensation coverage. In reality, Cudemo’s company received and cashed more than $7,800,000 in checks from various construction contractors for these purported Cudemo “employees.” These payroll figures far exceeded the very limited payroll figures that Cudemo had reported to her worker’s compensation insurance company. As a result, these employees, in reality the employees of other entities, performed work on jobsites without adequate insurance coverage. In addition, the insurers lost premiums they would have charged had they been aware of the true number of workers their policies were thus being manipulated to cover.   As a result of these misrepresentations, Cudemo’s company also disclaimed responsibility for ensuring that jobsite workers were legally authorized to work in the United States and that required state and federal payroll taxes were being paid for these workers. The contractors who actually paid these workers’ wages and used their services were thus also able to avoid responsibility for those duties as well.   This case was investigated by Homeland Security Investigations and the State of Florida Department of Financial Services. It is part of a lengthy investigation by those agencies into the use of shell companies and “ghost” employees in the construction industry. It was prosecuted by Assistant United States Attorney Jay L. Hoffer.

October 24, 2024 Jacksonville, Florida – United States Attorney Roger B. Handberg announces the return of two indictments charging Eduardo Anibal Escobar (44), Carlos Alberto Rodriguez (45), Adelmy Tejada (56), Rene Mauricio Escobar (53), and Juana Nelida Escobar (45), all residents of Orlando, with conspiracy to commit wire fraud and conspiracy to commit tax fraud.   Each wire fraud count carries a maximum penalty of 20 years in federal prison and each tax fraud count carries a maximum penalty of 5 years in prison. The indictments also notify the defendants that the United States intends to seek forfeiture of a total of at least $19 million as well as five residential properties located in Orlando, which are proceeds of the alleged wire fraud offenses.   According to the indictment, the defendants established companies that purported to supply labor for construction contractors. Florida law requires any business that engages in construction work to secure and maintain workers’ compensation insurance. The defendants applied for workers’ compensation insurance policies to cover a few employees and a minimal payroll.   The defendants then entered into agreements with construction work crews, often consisting of undocumented aliens, pursuant to which the defendants submitted paperwork to construction contractors to obtain work for the work crews, falsely representing that the workers were the companies’ employees. The workers then performed construction work under the supervision and direction of the contractors.   The contractors wrote payroll checks to the defendants’ companies for this work and provided the checks to work crew leaders. The checks were deposited into bank accounts in the name of the defendants’ companies and the defendants withdrew cash, and sometimes wrote checks for the workers’ pay and provided the cash and checks to the work crew leaders. However, before turning over the payroll, the defendants deducted a 6% to 8% fee for their services.   The funneling of payroll from the contractors to the work crews in this way allowed the contractors and the work crews to disclaim responsibility for ensuring that required payroll taxes were paid, that adequate workers’ compensation insurance was provided, and that the workers were legally authorized to work in the United States. During the period of the alleged conspiracy, the defendants deposited more than 46,000 payroll checks totaling more than $292 million, of which the defendants kept at least $19 million in fees. No one—neither the contractors nor the work crews nor the defendants or their companies—remitted payroll taxes, such as Social Security and Medicare taxes and federal income tax, to the IRS. According to the IRS, the unpaid taxes on the payroll total at least $52 million.   The defendants also cheated the workers’ compensation insurance companies out of premiums. If the insurance companies had known that the policies were going to be used for more than $292 million in payroll, they would have charged additional premiums totaling at least $28 million.   An indictment is merely a formal charge that a defendant has committed a violation of the federal criminal laws, and every defendant is presumed innocent unless, and until, proven guilty.   This case was investigated by Homeland Security Investigations, the Internal Revenue Service –Criminal Investigation, and the Florida Department of Financial Services. It is part of a continuing investigation by those agencies on the use of shell companies and “ghost” employees in the construction industry. It will be prosecuted by Assistant United States Attorney Arnold B. Corsmeier. The asset forfeiture is being handled by Assistant United States Attorney Jennifer M. Harrington.