True Payroll Crime Stories

.https://www.businesswire.com/news/home/20240529393008/en/Payroll-Sector-Benefiting-from-Technology-Led-Progression-Reveals-Annual-CloudPay-Payroll-Efficient-Index-Report https://www.timetrakgo.com/signmeup?utm_source=SMB24&utm_medium=IAP&utm_id=SBM24 https://constructioncitizen.com/blog/shell-company-operators-sentenced-multi-million-dollar-wire-and-payroll-fraud-scheme/2311091 Chief United States District Court Judge Timothy J. Corrigan sentenced two Honduran nationals, Omar Wilkin Santos-Calix and Oscar Rene Santos-Santos, to 24 months in federal prison for wire and tax fraud conspiracies. Santos-Calix must pay $3,245,161 in IRS restitution and $897,870 in a money judgment, while Santos-Santos owes $1,773,429 in IRS restitution and $490,634 in a money judgment. **Key Points:**- Santos-Calix and Santos-Santos established a fake construction company to perpetrate their scheme.- They acquired minimal workers' compensation insurance and "rented" it to work crews.- The duo cashed payroll checks issued by contractors, deducting a 6% fee before distributing cash to the crews, totaling approximately $19 million.- Neither the shell companies nor contractors reported wages to authorities or paid payroll taxes, resulting in a $5,018,590 tax liability.- The scheme evaded higher insurance costs by purchasing policies for $21,000 instead of the required $2.5 million.- Investigation and prosecution were conducted by Homeland Security Investigations (HSI), IRS-CI, and the Florida Department of Financial Services. **Prevention Measures:**- Implement thorough background checks on individuals involved in establishing businesses and issuing workers' compensation insurance.- Conduct regular audits and inspections of businesses' financial records and tax filings to identify fraudulent activities.- Enforce tax laws and regulations more strictly, with collaboration between government agencies and law enforcement to deter similar fraudulent activities in the future. Learn more about your ad choices. Visit megaphone.fm/adchoices