MYRTLE BEACH — A dozen business owners and employees from seven Myrtle Beach-area construction companies pleaded guilty to charges of employment tax fraud and employing undocumented workers in what the U.S. Attorney’s Office called one of the largest-ever tax fraud investigations in South Carolina.
At least $15 million in checks were cashed by the defendants, authorities said. The owners and employees agreed to pay a total of $3 million in restitution to the Internal Revenue Service, and each could face more than five years in prison.
IRS and Homeland Security Investigations officials said on Oct. 26 they continue to probe similar schemes along the S.C. coast that costs tens of millions of dollars of tax losses.
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An undercover investigation started by federal authorities in 2018 targeted those in the construction industry who used unlicensed check cashers to assist with under-the-table payments to employees to avoid paying employment taxes. Many of the workers were undocumented, said Assistant U.S. Attorney Derek Shoemake.
"This is not a victimless crime," Shoemake told reporters at a press conference on Oct. 26. "This victimizes the American taxpayers; it victimizes those honest workers who are trying to do the right thing. It also victimizes workers on these job sites who are working without any insurance. If one of these gentleman or ladies fell off a ladder, there's no insurance."
The defendants met with the check cashers in parking lots for retail stores or coffee shops, the investigation found. The casher was given a business check made out in a certain amount to a company that the check casher created, and the employer was given a bag of cash to pay the employees, minus a 3 percent fee, according to Shoemake.
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To make it appear that the workers had valid insurance on job sites, the check casher provided a bogus certificate of workers’ compensation insurance, the investigation found. The check casher and the employer agreed that the casher would claim to be a subcontractor of the employer, who provided the workers and provided insurance. This also cheated the government out of applicable employment taxes, officials said.
The scheme using the casher provided cover for construction companies to hire undocumented workers and pay them with untaxed cash, authorities said.
The 12 defendants pleaded guilty to one felony count of conspiracy to defraud the United States and one misdemeanor count of unlawful employment of undocumented workers. They included:
- Daniel Lavoie and Enrique R. Reyes, both of Conway, who worked at Daniel Lavoie Construction Services of Conway
- Walter A. Duran and Lisa Caulley Sellers, both of Myrtle Beach, who worked at Duran Masonry of Myrtle Beach
- Ming Xue Nan and Katherine L. Welker, both of Myrtle Beach, who worked at Extreme Siding of Myrtle Beach
- Marylany Hardman Levino and Josafa P. Neto, both of Myrtle Beach, who worked at Master Homes of Calabash, N.C.
- Saul Prieto and Martha E. Zarate, both of Myrtle Beach, who worked at Metro Concrete Finishers of Conway
- Marcos Caetano De Almeida of Myrtle Beach, who worked at Master Homes Design Center of Myrtle Beach
- Johanna A. Carpio of Myrtle Beach, who worked at Paint By Numbers of Myrtle Beach
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The companies were not cited in the investigation.
The 12 defendants each face up to five years in federal prison for conspiracy to defraud the United States and up to six months for unlawful employment of undocumented workers. Each defendant also faces fines of up to $250,000 and $3,000 for each undocumented worker.
They will be sentenced within 60 days, authorities said.
“They did it for their own financial gain and their personal gain and at the expense of the health and safety of the workers in this case, but also the local businesses in this area,” Scott Crabb, the assistant special agent in charge with Homeland Security Investigations, said.
Source : https://www.postandcourier.com/myrtle-beach/news/12-myrtle-beach-area-employees-plead-guilty-in-one-of-scs-largest-tax-fraud-cases/article_534e561c-35eb-11ec-906b-67f58bf8d81a.html3337