NAPLES, Fla. — A Florida man has pleaded guilty to operating an illegal payroll scheme that defrauded the U.S. government of more than $4.2 million in employment taxes.
Alexis Garcia admitted to conspiring to operate an off-the-books cash payroll system for construction workers to avoid paying employment taxes to the IRS and to defraud workers' compensation insurance companies.
Garcia, according to a press released from the Department of Justice, managed and directed operations of Tape Drywall Services Inc. in Naples between 2017 and 2019. During this time, prosecutors say he and a co-conspirator cashed over 3,600 checks totaling approximately $28 million from contractors who had hired Tape Drywall to provide workers.
The scheme involved Garcia and his co-conspirator cashing checks from contractors, keeping a small percentage as a fee, and providing cash to foremen who paid workers under the table.
"The timely payment of these taxes is critical to the functioning of the U.S. government because they are the primary source of funding for Social Security and Medicare," the Department of Justice said in a press release.
In addition to tax evasion, Garcia admitted to defrauding workers' compensation companies by substantially misrepresenting Tape Drywall's payroll, resulting in significantly lower insurance payments.
Garcia faces a maximum penalty of five years in prison, along with supervised release, restitution, and monetary penalties.
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