WASHINGTON — An illegal immigrant from Honduras was sentenced to eight years in prison Wednesday for bilking the US government out of nearly $40 million in a payroll tax fraud scheme that helped other aliens find work in America.
Mario Flores conspired with his girlfriend and others to set up shell companies in Orlando, Fla., that operated unlicensed cash courier and check cashing services for construction contractors and subcontractors.
The off-the-books payroll services allowed Flores and his co-conspirators to charge a percentage fee while cashing $89 million in checks for clients between 2015 and 2022.
The contractors and subcontractors then paid the cash directly to employees — without withholding and paying required payroll taxes to the IRS and allowing them to skirt laws against hiring illegal immigrants.
Flores’ lover, Iris Villafranca, was sentenced to 17 years in prison in April and ordered to pay more than $38 million in restitution for the scheme.
Two co-conspirators — Osman Zapata and Francisco Alvarez — were sentenced to four years in prison and four years of probation, respectively, and ordered to pay nearly $5 million in total restitution.
For his part, Flores copped to being responsible for at least $9.4 million kept from the taxman.
In March, he pleaded guilty to one count of conspiring to defraud the US and one count of conspiring to operate an unlicensed money transmitting business.
Prosecutors said in a sentencing memo that the Honduran national had tried to deceive investigators by handing over “fake receipt books to support the false tax returns that the shell companies had filed with the Internal Revenue Service, and produced those fake receipt books in response to the grand jury subpoenas.”
“Worse, Flores—Villafranca’s then-former romantic partner—made false statements to special agents of the Internal Revenue Service to further conceal the conspiracy,” the memo stated.
“Villafranca messaged with Flores repeatedly before he met with special agents of the Internal Revenue Service. He then lied to special agents about his and Villafranca’s role in the scheme.”
“This case exposes how unchecked illegal immigration fuels widespread payroll tax fraud and underground economies that harm American workers and taxpayers,” Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division said in a statement.
“This sentence sends a strong message: those who exploit our open borders, cheat the U.S. Treasury, and violate federal laws will face justice.”
