Michael Mayorga, Tax Evasion, Florida 2022

Florida Men Plead Guilty to Operating Off-the-Books Payroll Scheme

Two Florida men, Michael Mayorga and Francisco Alvarez, have pleaded guilty to their roles in a years-long off-the-books payroll scheme. The scheme, which operated from 2015 to 2022, allowed the defendants to avoid paying employment taxes to the IRS and defraud workers' compensation insurance companies.

According to court documents and statements made in court, Mayorga and Alvarez conspired with others to operate an illegal, off-the-books cash payroll system for construction workers. The scheme facilitated the employment of undocumented aliens working illegally in the United States.

Through the scheme, Alvarez and Mayorga created a series of shell companies to run an unlicensed check cashing and cash courier service business that cashed approximately $89 million in checks from subcontractors in the construction industry. Mayorga provided bookkeeping and tax preparation services for some of the shell companies, and Alvarez and others facilitated the distribution of millions in cash to subcontractors.

Mayorga caused a tax loss to the IRS of $8,647,824, while Alvarez caused a tax loss of $2,331,731. Alvarez also filed a false worker's compensation insurance application, allowing the shell companies to pay small insurance premiums. After fraudulently obtaining the insurance, Alvarez 'rented' it to subcontractors so that they could falsely provide proof of insurance when placing bids with contractors.

Mayorga and Alvarez will be sentenced at a later date and each face a maximum penalty of five years in prison, a period of supervised release, restitution, and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The case was investigated by the IRS Criminal Investigation and Homeland Security Investigations. Senior Litigation Counsel Sean Beaty and Trial Attorneys Kavitha Bondada and Rebecca A. Caruso of the Tax Division and Assistant U.S. Attorney Amanda Daniels for the Middle District of Florida are prosecuting the case.

Defendant: Michael Mayorga

Criminal Charges: Conspiracy to defraud the United States, tax evasion, and wire fraud

City and State: Tampa, Florida

Exact Date: 2022

Sentence or Outcome: Pleaded guilty, awaiting sentencing

Dollar Amounts: $8,647,824 in tax loss, $2,331,731 in tax loss, $89 million in cashed checks

Source: https://www.justice.gov/usao-mdfl/pr/two-florida-men-plead-guilty-their-roles-years-long-books-payroll-scheme