Orlando, FL – A federal grand jury has indicted four Honduran nationals for allegedly orchestrating an illegal cash payroll system aimed at evading employment taxes and defrauding workers’ compensation insurance companies. The accused, Iris Villafranca, Mario Flores, Osman Zapata, and Cristofer Oseguera Giron, face charges of conspiracy to operate an unlicensed money transmitting business and conspiracy to defraud the United States.
From 2015 to 2022, the defendants reportedly utilized a network of shell companies to conduct an unlicensed check cashing and cash courier service. This operation allegedly cashed approximately $89 million in checks from subcontractors in the construction sector, enabling these subcontractors to pay their workers in cash, thus sidestepping payroll taxes and employing undocumented workers.
The indictment further claims that the defendants filed false tax documents with the IRS to conceal their activities and made minimal employment tax deposits. Additionally, they are accused of defrauding workers’ compensation insurance companies by misrepresenting the number of workers covered and their wages, and by leasing insurance certificates to contractors.
Villafranca is also charged with conspiracy to commit wire fraud and filing false tax returns from 2019 to 2022, failing to report income from the scheme and rental income from real estate.
If convicted, Villafranca could face up to 20 years in prison for conspiracy to commit wire fraud, five years for conspiracy to operate an unlicensed money transmitting business, and five years for conspiracy to commit tax fraud. She also faces up to three years for each count of filing false tax returns. Flores, Zapata, and Giron each face a maximum of five years for conspiracy to operate an unlicensed money transmitting business and conspiracy to commit tax fraud.
The investigation is being led by IRS Criminal Investigation, with assistance from Homeland Security Investigations. The case is being prosecuted by the Justice Department’s Tax Division and the U.S. Attorney’s Office for the Middle District of Florida.
An indictment is an allegation, and all defendants are presumed innocent until proven guilty in a court of law.
