What Are the Penalties for Understating Payroll Figures in Florida?

Anyone with a modicum of business experience understands that there is an incentive to push expenses higher for tax purposes. This process can be perfectly legal with creative accounting measures, but what happens if you understate certain expenses in an unlawful manner? A recent case in Florida shows that when companies engage in this behavior, there is a very real possibility that the owner will face criminal charges.

Florida Construction Contractor Gets 33 Months in Prison for Understating Payroll

 On November 16th, the Justice Department announced that a 53-year-old individual from Lakeland had been sentenced to 33 years in prison for conspiracy to commit wire fraud. He was also ordered to forfeit over $500,000 of the money he made during this crime. The scheme was relatively simple, and it involved not only falsified employment documents, but also the use of illegal aliens as workers that were not covered under workers’ compensation. The contractor would receive checks from other construction contractors, and over the years, these checks amounted to more than $21 million.

Put simply, the payroll numbers that he provided to his workers’ compensation insurance provider did not match the actual payroll compensation he received from contractors. In fact, the illegal aliens were actually working for completely different companies while lacking insurance coverage for potential injuries. The insurance company found out, and argued that they lost premiums that they would have been able to charge if they were aware of the true number of workers involved.

Perhaps the most notable aspect of this report is a clear warning from Homeland Security Investigations and the Florida Department of Financial Services. These organizations warn that they are in the process of an extensive investigation into similar activities within the construction industry. In particular, they are focusing on shell companies and “ghost employees,” as both issues have apparently become especially prevalent within Florida’s construction industry.

What Are Ghost Employees? 

A ghost employee is exactly what it sounds like – a person who is on a company’s payroll but does not actually exist anywhere else within the business. Often, these people are completely fictional with no basis in reality. In other cases, people may be completely unaware that they have been placed on a company’s payroll, and this type of offense often involves some degree of identity theft. Another common term for this type of fraud is a “no-show” job, and this type of situation is commonly associated with corrupt labor unions within the construction industry. It is worth pointing out that companies are often the victims of these scams – and not the perpetrators.

Where Can I Find a Qualified, Experienced Defense Attorney in Fort Lauderdale? 

If you’ve been searching for a qualified, experienced Fort Lauderdale criminal defense attorney, look no further than Haber Blank, LLP. Over the years, we have helped numerous business owners facing criminal consequences for various commercial activities. Wire fraud is only one example of a potential charge that can emerge from alleged misconduct, and there are many others. In order to defend yourself and your company in an effective manner, consider booking a consultation today.

Sources: 

justice.gov/usao-mdfl/pr/lakeland-man-sentenced-federal-prison-role-construction-related-wire-fraud-conspiracy

fraud-magazine.com/article.aspx?id=4294968370