Two Norcross Business Owners Sentenced for Defrauding the CDC
ATLANTA, Georgia, March 2023 – Cesar Arbelaez Tabares and Juan Carlos Bazantes, owners and operators of IWES Contractors, Inc., a drywall labor supply company in Norcross, Georgia, have been sentenced to each serve eight years in prison and pay a $75,000 fine following their trial and convictions for submitting false certified payroll forms to the Centers for Disease Control and Prevention (CDC) in connection with a construction project at the federal facility.
According to U.S. Attorney Byung J. ‘BJay’ Pak, Cesar Arbelaez Tabares was the Chief Executive Officer and Juan Carlos Bazantes was the Chief Financial Officer of IWES, a Norcross-based business that supplied drywall laborers to contractors and subcontractors for construction projects. Beginning in 2012, IWES supplied drywall laborers for a construction project with the CDC.
Under the direction of Tabares and Bazantes, IWES maintained a double payroll system for its workers on the CDC project, which internally classified those workers as either ‘W2.REAL’ or ‘W2.F.2CHK’. Those workers who were classified as ‘W2.REAL’ received one paycheck each pay period with employment taxes withheld, received an IRS Form W-2 at the end of the calendar year, and were reported on quarterly employment taxes filed by IWES with the IRS.
Those workers who were classified as ‘W2.F.2CHK’ received two paychecks simultaneously each pay period. The first paycheck totaled the worker’s net pay (gross wages minus employment taxes withheld), while the second paycheck received by the worker totaled the employment taxes withheld from the first paycheck so that the worker, in reality, was receiving his or her gross wages with no tax withholdings. Workers classified as ‘W2.F.2CHK’ performed many of the same job duties as those who were classified as ‘W2.REAL,’ but they did not receive an IRS Form W-2 at the end of the calendar year and were not reported on quarterly employment taxes filed by IWES with the IRS.
Cesar Arbelaez Tabares and Juan Carlos Bazantes were convicted of violating the Davis-Bacon and Related Acts, which require federal contractors to pay their employees prevailing wages and to withhold employment taxes from their wages. The court’s sentence reinforces the message that federal contractors and subcontractors are not immune from rules and laws that apply to any company with employees.
The jury’s verdict and the court’s sentence demonstrate the commitment of law enforcement agencies to investigate and prosecute employment tax fraud and to ensure that American workers are paid proper wages and that employers make the required payroll deductions and benefit contributions.
Key Facts
- State: Georgia
- Category: White Collar Crime
- Source: DOJ Press Release â†â€â€
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