A federal grand jury in Orlando has returned an indictment charging four individuals with operating an unlicensed check-cashing business that allegedly processed approximately $89 million over seven years, primarily to facilitate off-the-books payroll for construction workers, evade employment taxes, and defraud workers’ compensation insurance companies.
The scheme also allegedly aided in the employment of undocumented immigrants.
The indictment, announced last week, names Honduran nationals Iris Villafranca, Mario Flores, Osman Zapata, and Cristofer Oseguera Giron as defendants.
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According to the indictment, from 2015 to 2022, the defendants allegedly utilized a network of shell companies to run an unlicensed business offering check cashing and cash courier services. Construction subcontractors reportedly used this service to cash approximately $89 million in checks, which was then allegedly used to pay their workers in cash. The defendants allegedly charged a percentage of the cashed checks as their fee.
Prosecutors assert that this system allowed construction contractors and subcontractors to pay employees in cash without adhering to payroll tax obligations or verifying the legal work status of their laborers. The indictment alleges the defendants filed false tax documents with the IRS to conceal the true nature of the payroll system and made only minimal employment tax deposits.
The scheme also allegedly involved defrauding workers’ compensation insurance providers. The defendants are accused of leasing their certificates of insurance to contractors and providing false information to insurers regarding the number of employees covered and the wages paid.
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Defendant Iris Villafranca faces additional charges of conspiracy to commit wire fraud and filing false individual income tax returns for the years 2019 through 2022. These tax returns allegedly failed to report income from the scheme and rental income from her real estate holdings.
All four defendants are charged with conspiracy to operate an unlicensed money transmitting business and conspiracy to defraud the United States.
If convicted, Villafranca faces a maximum penalty of five years in prison for the money transmitting conspiracy, up to 20 years for the wire fraud conspiracy, and a maximum of five years for the tax fraud conspiracy. She also faces a potential three years in prison for each count of filing false tax returns.
Flores, Zapata, and Giron each face a maximum of five years for the money transmitting conspiracy and five years for the tax fraud conspiracy if convicted.
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