Illegal Immigrant Sentenced for Payroll Tax Fraud
The Department of Justice (DOJ) announced on Wednesday that a Honduran national has been sentenced to eight years in prison for running an extensive cash payroll system that illegally employed migrants. The scheme reportedly involved nearly $89 million over several years.
Mario Flores pleaded guilty in March to conspiracy charges aimed at defrauding the United States and unlawfully operating a money transfer business. This was confirmed in a DOJ statement.
From 2015 to 2022, Flores set up multiple shell companies to facilitate unauthorized check cashing and cash delivery services for construction firms. These contractors utilized the cash to pay their workers without contributing taxes, which enabled the hiring of illegal immigrants.
Flores further obscured the operation by directing the Internal Revenue Service (IRS) to submit false tax returns, which, according to the DOJ, resulted in losses exceeding $38 million for the U.S. government.
Assistant Attorney General Colin M. McDonald commented on the case, emphasizing how illegal immigration contributes to payroll tax fraud and an underground economy that harms American employees and taxpayers. He remarked that this sentencing sends a clear message: those who exploit open borders and violate federal laws will be pursued.
Additionally, several co-conspirators—Iris Villafranca, Osman Zapata, and Francisco Alvarez—received sentences of 17 years, four years, and four years, respectively, for their involvement in the scheme.
The group also defrauded workers’ compensation insurance companies by leasing policies to contractors while supplying false information, which further complicated the situation.
John Condon, acting deputy director of the Department of Homeland Security, reaffirmed the commitment to holding accountable those responsible for large-scale payroll tax fraud and the illegal hiring of workers. He assured that efforts would continue in conjunction with the IRS and various partners to dismantle schemes that undermine the integrity of the American workforce.
