A Honduran national, illegally residing in the United States, has been handed a significant federal prison sentence and ordered to pay millions in restitution for her role in a sophisticated scheme involving wire fraud and tax fraud that heavily impacted Florida’s construction industry.
Ana Juanita Andrade-Reyes was sentenced by United States District Court Judge Wendy W. Berger to 37 months in federal prison, followed by orders to pay $2,084,182 in restitution to the IRS and a $664,588 money judgment representing the proceeds of her illicit activities.
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According to court documents, Andrade-Reyes orchestrated a complex operation involving a shell company that falsely presented itself as a legitimate construction firm. Her scheme revolved around exploiting workers’ compensation insurance policies.
She procured a policy for her shell company with a minimal declared payroll, then “rented” this insurance to numerous work crews, many of whom employed undocumented workers, operating on construction projects across Florida and other states.
By providing certificates of insurance, Andrade-Reyes falsely assured contractors that these work crews were covered, as required by Florida law. This deception allowed the work crews to avoid the significantly higher costs of legitimate workers’ compensation insurance.
The policy Andrade-Reyes purchased for an estimated payroll of just $169,400 cost approximately $11,352. Had the actual payroll of approximately $5 million been accurately reported, the premium would have soared to about $591,978.
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Beyond the insurance fraud, Andrade-Reyes’s scheme also facilitated massive tax evasion. Contractors issued payroll checks for the workers’ wages to her shell companies. Andrade-Reyes would then cash these checks, distribute the money to the work crews, and deduct a fee, typically around 6% of the payroll.
During the scheme, she cashed approximately $8 million in payroll checks. Crucially, neither her shell company nor the contractors reported these wages to the government, nor did they pay any federal payroll taxes, including Social Security, Medicare, and federal income tax. The IRS estimates the unpaid payroll taxes to be a staggering $2,048,182.
“Worker’s compensation insurance fraud schemes are built on unlawful hiring practices of illegal aliens and are directly tied to our border security,” stated Homeland Security Investigations Assistant Special Agent in Charge Timothy Hemker. He emphasized that these schemes “drive down wages, compromise the safety and future of workers who are hurt on the job, and disadvantage law-abiding contractors through the increase of legitimate premiums.” Hemker reiterated HSI’s commitment, alongside the IRS, to “investigate the criminal networks that perpetuate these fraud schemes which inflict grave damage on the construction industry and incentivizes illegal immigration.”
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Ron Loecker, Special Agent in Charge of IRS-Criminal Investigation’s Tampa Field Office, echoed these sentiments, highlighting the importance of a level playing field in industry. “Cheating to get an unfair advantage undermines that,” Loecker said. “No matter how sneaky you think you are, we will find out, we will investigate, and we will do everything we can to balance the free market by bringing you to justice.”
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