The Department of Justice (DOJ) announced that Alexis Garcia, a Florida resident, pled guilty in the Middle District of Florida to conspiring to defraud the U.S. by operating an off-the-books payroll scheme. According to court documents, Garcia conspired with others to operate an illegal, off-the-books cash payroll system for construction workers to avoid paying employment taxes to the Internal Revenue Service (IRS) and to defraud workers’ compensation insurance companies.
Between 2017 and 2019, Garcia managed and directed the operations of Tape Drywall Services Inc., located in Naples, Florida. Contractors entered into agreements with Tape Drywall to provide workers for various construction contracts and provided checks in the name of Tape Drywall for payment. Garcia and his co-conspirator would cash the checks and retain a small percentage as a fee. Garcia and his co-conspirator provided cash to the foremen who used the cash to pay the workers. In total, Garcia and his co-conspirator cashed over 3,600 checks totaling approximately $28 million. Garcia and his co-conspirator did not report the wages to the IRS and did not withhold Social Security, Medicare, and federal income taxes from those wage and pay them over to the IRS, as required by law. As a result, Garcia caused a loss to the United States of more than $4.2 million.