The United States Attorney’s Office, Middle District of Florida, November 10, 2022
Tampa, Florida – U.S. District Judge Thomas P. Barber has sentenced Ricky Gonzales to 48 months in federal prison for conspiracy to commit wire fraud and conspiracy to defraud the United States. The court also entered an order of forfeiture in the amount of $500,731.13, the proceeds of the wire-fraud conspiracy. Gonzales had pleaded guilty to the charges on August 9, 2022.
According to court documents, Gonzales owned and managed a construction company that purported to supply construction services and labor for construction contractors and subcontractors. In order to comply with Florida law, the company that Gonzales operated was required to secure and maintain adequate worker’s compensation insurance coverage. Gonzales’ company had agreements with contractors and subcontractors to use workers purported to be Gonzales’ 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. Gonzales or others would then regularly receive “payroll checks” from contractors that were cashed at various financial institutions to pay Gonzales’ purported “employees” and other related expenses.
During the time period charged, Gonzales falsely and fraudulently represented in insurance applications that his company had a very limited payroll and a very limited number of employees who worked on construction jobsites. Gonzales also falsely and fraudulently sent wire communications to numerous contractors representing that his company’s employees had full worker’s compensation coverage.
In reality, Gonzales’ company received and cashed more than $7,150,000 in checks from various construction contractors for these purported “employees”. These payroll figures far exceeded the very limited payroll figures that Gonzales had reported to his 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, Gonzales’ 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. As a result of this conspiracy, the IRS was unable to collect over $1,094,000 in employment taxes on these workers’’ wages.
“This criminal defrauded insurance companies out of thousands in premiums through undervalued workers’ compensation insurance policies, then profited off the backs of hundreds of non-citizen workers by renting those policies for a fee from their pay checks,” said HSI Tampa Assistant Special Agent in Charge John Dumas. “HSI special agents, alongside the Internal Revenue Service - Criminal Investigation, are committed to ensuring that all workers have the safety net of proper workman’s compensation insurance policy.”
“Gonzales and his conspirators used a shell of lies to evade their tax obligations and skirt workers’ compensation expenses. They short-changed not only the U.S. government but also honest hard-working construction companies,” said Brian Payne, IRS-CI Special Agent in Charge. “Employment tax and workers’ compensation schemes are rampant in Florida’s construction industry and will continue to be a top priority of IRS-CI.”
This case was investigated by the Homeland Security Investigations, the State of Florida Department of Financial Services, and the Internal Revenue Service-Criminal Investigation. 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.
News article: https://www.justice.gov/usao-mdfl/pr/seffner-man-sentenced-role-construction-related-wire-and-tax-fraud-conspiracy