The United States Attorney’s Office, Middle District of Florida, May 2, 2022
Tampa, Florida – U.S. District Judge Kathryn Kimball Mizelle has sentenced George Garcia (34, Tampa) to 21 months in federal prison for conspiracy to commit wire fraud. The Court also entered an order of forfeiture in the amount of $126,200, the proceeds of the wire-fraud conspiracy. Garcia had pleaded guilty on January 18, 2022.
According to court documents, Garcia 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, Garcia’s company was required to secure and maintain adequate worker’s compensation insurance coverage. Garcia’s company had agreements with contractors and subcontractors to use workers purported to be Garcia’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. Garcia or others would then regularly receive “payroll checks” from contractors that were cashed at various financial institutions to pay Garcia’s purported “employees” and other related expenses.
During the time period charged, Garcia 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. Garcia also falsely and fraudulently sent wire communications to numerous contractors representing that his company’s employees had full worker’s compensation coverage.
In reality, Garcia’s company received and cashed more than $19 million in checks from various construction contractors for these purported “employees.” This payroll figure far exceeded the very limited payroll figures that Garcia 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, Garcia’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.
“Garcia is facing the consequences of his scheme to defraud the insurance company by severely misrepresenting his workers compensation policy,” said Assistant Special Agent in Charge John Dumas, HSI Tampa. “Garcia’s greed jeopardized the health and well-being of hundreds of non-citizen laborers who worked dangerous and difficult jobs without the safety net of proper workman’s compensation insurance.”
This case was investigated by Homeland Security Investigations and the State of Florida Department of Financial Services. It is part of an 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: Tampa Man Sentenced For Role In Construction-Related Wire Fraud Conspiracy | USAO-MDFL | Department of Justice