ORLANDO — An illegal alien from Honduras was sentenced to 96 months in federal prison for operating a years-long off-the-books cash payroll scheme that cashed approximately $89 million in checks, employed illegal aliens in the construction industry and caused more than $38 million in losses to the United States, federal prosecutors announced.
Mario Flores conspired with others from 2015 to 2022 to create a series of shell companies that ran an unlicensed check cashing and cash courier service, according to the U.S. Attorney’s Office for the Middle District of Florida. Construction contractors and subcontractors used the scheme to pay workers in cash without withholding required payroll taxes, allowing them to operate without verifying workers’ legal authority to work in the United States. Flores also caused the filing of false tax documents with the IRS to conceal the operation.
“Today, we held an illegal alien from Honduras accountable for a brazen scheme that stole more than $38 million from American taxpayers to facilitate the employment of illegal aliens,” said Assistant Attorney General Colin M. McDonald of the Justice Department’s National Fraud Enforcement Division. “This case exposes how unchecked illegal immigration fuels widespread payroll tax fraud and underground economies that harm American workers and taxpayers. This sentence sends a strong message: those who exploit our open borders, cheat the U.S. Treasury, and violate federal laws will face justice.”
Ron Loecker, Special Agent in Charge of IRS Criminal Investigation’s Florida Field Office, said the case exposed a sophisticated criminal pipeline. “These individuals didn’t just run an off the books payroll scheme-they built a pipeline of fraud that stole from taxpayers and helped sustain an unlawful employment scheme,” Loecker said. “IRS Criminal Investigation, working hand in hand with our federal, state, and local law enforcement partners, is laser focused on cutting off the financial lifeblood of schemes that exploit workers, cheat honest businesses, and undermine the integrity of our tax system.”
Flores and his conspirators also defrauded workers’ compensation insurance companies by leasing certificates of insurance to contractors and providing false information about the number of workers covered and the amounts they were paid. Flores pleaded guilty to one count of conspiracy to defraud the United States and one count of conspiracy to operate an unlicensed money transmitting business.
Three co-conspirators have already been sentenced. Iris Villafranca received 17 years in prison and was ordered to pay more than $38 million in restitution and forfeit $89 million in criminal proceeds. Osman Zapata was sentenced to more than four years in prison and ordered to pay more than $2.5 million in restitution. Francisco Alvarez received four years of probation and was ordered to pay more than $2.3 million in restitution.
“Homeland Security Investigations is committed to protecting the integrity of our financial system and enforcing our nation’s laws. Those who orchestrate large-scale payroll tax fraud and facilitate the illegal employment of unauthorized workers will be held accountable,” said HSI Acting Executive Associate Director John Condon. U.S. Attorney Gregory W. Kehoe of the Middle District of Florida announced the case alongside McDonald. IRS Criminal Investigation led the investigation with assistance from Homeland Security Investigations, ICE Enforcement and Removal Operations Miami (Orlando sub-office), Florida Highway Patrol, Customs and Border Protection, U.S. Marshals Service, the State Department and the Florida Department of Law Enforcement. A fifth conspirator, Michael Mayorga, awaits sentencing.