Myrtle Beach construction workers plead guilty to tax evasion
Twelve people involved in the construction industry in Myrtle Beach and Conway have pleaded guilty to federal tax evasion charges, charged with hiring immigrants who entered the country illegally, paying them illegally and lying to the subject of workers’ insurance.
South Carolina District Attorney Rhett DeHart announced the convictions Tuesday morning at a press conference held at the Myrtle Beach Police Department Annex.
DeHart called the multi-year federal undercover investigation the largest IRS criminal operation in South Carolina’s Pee Dee area history. The investigation was conducted by the IRS and Homeland Security with assistance from the Myrtle Beach Police Department, he said.
Construction companies have used unlicensed check collectors to make illicit cash payments “in the dark” to employees, thereby avoiding taxes on the workers’ employment. Cashiers also provided insurance certificates incorrectly stating that employees were covered by workers’ compensation insurance.
Each of the 12 defendants pleaded guilty to one charge of conspiracy to defraud the United States, which is a felony, and one charge of the misdemeanor of illegal employment of individuals who entered the country illegally.
DeHart said at least $ 15 million in checks had been cashed by the defendants. DeHart estimated that at least tens of millions of dollars in tax losses occurred across the coast of South Carolina due to similar schemes.
“By evading millions of dollars in taxes and falsely claiming their workers had insurance, these defendants made it harder for honest business owners to compete in the construction industry along the coast of South Carolina and they left their workers exposed to injuries without insurance, âhe said.
âThe biggest misconception about labor exploitation is that it is a victimless crime and could not be further from the truth. Workers, competing companies, people who have their identities stolen and even the local economy are all victims of this crime, âsaid Special Agent in Charge Ronnie Martinez, who oversees Homeland Security investigation operations. in North Carolina and South Carolina.
The federal investigation into the illegal check cashing in the construction industry in the Myrtle Beach area began in late 2018, according to the press release.
Companies have used unlicensed check cashers to avoid paying employment taxes for their workers.
DeHart said they did so by meeting with the check teller in places such as parking lots for retail stores or cafes. The construction company would give the cashier a business check made out to a business created by the cashier, and the cashier would give the construction company representative a bag of untaxed cash that would be used to pay the bills. employees in exchange for an additional cost.
To give the impression that the employees had valid insurance, the cashier would also provide a false certificate of workers’ compensation insurance. The cashier then pretended to be a subcontractor who supplied the employees and provided the insurance.
In 2019, undercover IRS agents in the Myrtle Beach area recorded interactions with the defendants’ companies, according to the press release.
The defendants and their companies are:
Daniel Lavoie construction services:
Master Calabash Houses
Metro Concrete Finishers
Martha E. Zarate, also known as Martha E. Prieto, 54, of Myrtle Beach
Mansion Design Center
Paint by numbers