An illegal immigrant from Honduras was sentenced to eight years in jail on Wednesday for bilking the US government of over $40 million through a payroll tax fraud operation that helped other immigrants find work in America.
Mario Flores plotted with his girlfriend and others to establish shell firms in Orlando, Florida, that provided unlawful cash courier and cheque cashing services to construction contractors and subcontractors.
Between 2015 and 2022, Flores and his co-conspirators were able to charge a percentage fee while cashing $89 million in client checks through off-the-books payroll services.
The contractors and subcontractors then handed the cash straight to employees, avoiding withholding and paying mandatory payroll taxes to the IRS and skirting regulations against hiring illegal aliens.
Iris Villafranca, Flores’ lover, was sentenced to 17 years in prison in April and ordered to pay almost $38 million in compensation for the fraud.
Two co-conspirators, Osman Zapata and Francisco Alvarez, were sentenced to four years in jail and four years on probation, respectively, and ordered to pay roughly $5 million in total restitution.
Flores admitted to keeping at least $9.4 million from the taxman.
In March, he pleaded guilty to one count of conspiracy to defraud the United States and one count of operating an unauthorised money transmission business.
Prosecutors stated in a sentencing memo that the Honduran national attempted to deceive investigators by providing “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.”
“Worse, Flores—Villafranca’s then-former romantic partner—made false statements to special agents of the Internal Revenue Service to further conceal the conspiracy,” the document said.
“Villafranca messaged Flores several times before meeting with special IRS investigators. He then lied to special agents about his and Villafranca’s involvement in the scheme.
“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.
“This sentence sends a strong message: those who exploit our open borders, cheat the U.S. Treasury, and violate federal laws will face justice.”
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