The head of a Jacksonville painting business has pleaded guilty to being involved in a large-scale workman’s compensation fraud scheme that cost the government millions in lost taxes and helped facilitate the employment of illegal immigrants on job sites.
Dorothy Thompson-Avila, 44, became the final person to plead guilty in a case that initially saw three individuals indicted together in May 2023 on charges of wire fraud conspiracy and conspiring to defraud the federal government.
Thompson-Avila, who manages DT Eastern Painters LLC in Jacksonville, entered her plea last week, shortly after co-defendant Jose Molina-Herrera, a Honduran native, was sentenced to 27 months in prison for his role in the fraud. The scheme provided false workman’s compensation insurance to contractors in counties like Duval, Clay, and St. Johns.
Florida law requires contractors to have workman’s compensation insurance for their employees, but prosecutors revealed that the scheme involved shell companies purchasing insurance policies and renting them out to multiple contractors, far exceeding the coverage limits. For example, a policy designed for a business with $55,000 in payroll was used by contractors with a total payroll of $7.7 million.
Additionally, the shell companies were found to be handling payroll through cash payments to crew chiefs, which allowed them to avoid deducting payroll taxes and also conceal the employment of workers who were in the country illegally.
The fraud case revealed that many workers involved in the scam were undocumented immigrants working illegally in the U.S., according to the indictment. Ana Romero, the head of the shell company, also pleaded guilty in November, admitting that she and Thompson-Avila handled financial transactions for the scam. The operation included a handling fee of 6-7% that was charged to contractors before the remaining funds were passed on as untaxed payroll.
Over the span of nine months in 2019, the scheme resulted in $7.7 million in wages that went unreported to the government, with around $1.9 million in payroll and withholding taxes not being paid.
Federal authorities have condemned the fraud, with Ron Loecker, special agent in charge of the IRS-Criminal Investigation’s Tampa field office, stating that using shell companies to pay workers “under the table” not only violates the law but also creates an unfair advantage for businesses breaking the rules. Time Hemker, assistant special agent in charge of Homeland Security Investigations in Jacksonville, emphasized that the fraud undermines the integrity of the legal and economic systems while supporting unlawful employment practices.
The fraud scheme is similar to a case involving two brothers, Travis and Tripp Slaughter, who ran Jacksonville roofing companies and pleaded guilty in November to hiding $23 million in payroll.
