A Florida woman has been sentenced to house arrest and ordered to pay more than $3 million in restitution to the Internal Revenue Service for wire fraud and tax fraud following a joint investigation with U.S. Immigration and Customs Enforcement.
Feliciano Rodriguez, 47, of Orlando, was ordered to pay $3,338,558 in restitution and ordered to serve a five-year term of supervised release.
The court also entered a money judgment against Rodriguez in the amount of $347,760, representing the proceeds of the wire fraud.
According to court documents, Rodriguez established a shell company that purported to be involved in the construction industry.
She obtained a workers’ compensation insurance policy in the name of the shell company to cover a minimal payroll for a few purported employees, then “rented” the workers’ compensation insurance to work crews who had obtained subcontracts with construction contractors on projects in various Florida counties as well as contractors in other states.
Rodriguez sent the contractors a certificate as “proof” that the work crews had workers’ compensation insurance, as required by Florida law.
By sending the certificate Rodriguez falsely represented that the work crews worked for the shell company.
Over the course of the scheme, Rodriguez “rented” the certificates to dozens of work crews, defrauding the worker’s compensation carrier, typically allowing numerous undocumented illegal workers to be employed unlawfully.
As part of the scheme, the contractors issued payroll checks for the workers’ wages to the shell companies and Rodriguez cashed these checks, then distributed the cash to the work crews after deducting their fee, which was typically about six per cent of the payroll.
During the scheme, Rodriguez cashed payroll checks totalling approximately $13 million.
Neither the shell company nor the contractors reported to government authorities the wages that were paid to the workers, nor did they pay either the employees’ or the employer’s portion of payroll taxes – including Social Security, Medicare, and federal income tax.
The amount of payroll taxes due on wages collected by Rodriguez totalled over $3 million.
The scheme also facilitated the avoidance of the higher cost of obtaining adequate workers’ compensation insurance for the numerous workers on the work crews to whom Rodriguez “rented” the workers’ compensation insurance.
The policy that Rodriguez purchased and then “rented” out was for an estimated payroll of $121,800, and the insurance company issued a policy for a premium of approximately $8,006. Had a workers’ compensation insurance policy been purchased for the actual payroll totalling approximately $5 million, the policy premium would have totalled about $461,679.
“Today’s sentence sends a clear message that off-the-books payroll schemes which enable illegal immigrants the ability to work without paying taxes will not be tolerated. These schemes are violations of a number of serious federal criminal statutes, including wire fraud and tax evasion.
“The impact of this scheme, and others like it, harm law-abiding businesses and legal workers who are unable to compete against the tax-free labour of illegal immigrants,” said Special Agent in Charge Ron Loecker of the IRS Criminal Investigation (IRS-CI), Tampa Field Office. “We are proud to work alongside our partners at Homeland Security Investigations on this case, and we will continue this partnership to ensure all employers are on an even playing field.”
