Francisco Mendez, Tax Evasion, Oregon 2021

PORTLAND, Ore.—A shocking tax evasion scheme has been uncovered in Oregon, with a local construction company owner pleading guilty to his role in the massive scam.

Francisco Mendez, 27, pleaded guilty to conspiracy to commit tax evasion on May 20, 2021.

According to court documents, Mendez conspired with others to make ‘under the table’ cash payments to unlicensed construction work crews between January 2014 and February 2018. The scheme involved legitimate construction companies bidding on residential real estate projects, supplementing their workforce with independent crews, and paying a fee for the use of another company’s Construction Contractors Board (CCB) license.

Mendez registered a company, obtained a CCB license in his own name, and began accepting payments from unlicensed work crews for the use of his license. The legitimate construction companies did not put these unlicensed work crews on their regular payroll and, instead, wrote checks payable to Mendez’s company. Mendez cashed these payroll checks at check cashing businesses and made ‘under the table’ cash wage payments to the unlicensed work crews.

The scheme resulted in $100 million in unpaid payroll and income taxes. Mendez faces a maximum sentence of five years in prison, a $250,000 fine, and three years of supervised release. He will be sentenced on September 13, 2021, before U.S. District Court Judge Karin J. Immergut.

As part of the plea agreement, Mendez has agreed to pay restitution in full to the IRS as identified by the government prior to sentencing and ordered by the court.

Acting U.S. Attorney Scott Erik Asphaug of the District of Oregon made the announcement, stating that the case was investigated by IRS Criminal Investigation. Assistant U.S. Attorneys Seth D. Uram and Gavin W. Bruce are prosecuting the case.

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