Pablo Isila Euceda-Hernandez, a 36-year-old Honduran national illegally present in the United States, was sentenced to 27 months in federal prison for his role in a large-scale fraud scheme. U.S. District Judge Wendy W. Berger also ordered Euceda-Hernandez to pay $1,214,508 in restitution to the IRS.
Euceda-Hernandez established a shell company falsely claiming to operate in the construction industry. He used this company to defraud workers’ compensation insurers and evade payroll taxes. Court documents reveal that Euceda-Hernandez obtained a workers’ compensation insurance policy for the shell company, covering a minimal payroll for a few employees. He then “rented” the insurance to construction work crews on subcontracts across Florida and other states.
To deceive contractors, Euceda-Hernandez provided fraudulent certificates of insurance to show that the workers had valid workers’ compensation coverage, as required by Florida law. In reality, the workers were not employed by the shell company. Many were undocumented workers, allowing Euceda-Hernandez to unlawfully employ them.
Contractors issued payroll checks to the shell company for the workers’ wages, which Euceda-Hernandez cashed, deducting a fee before distributing the remaining funds to the workers. Over the course of the scheme, he cashed payroll checks totaling $5 million, resulting in unpaid payroll taxes of $1,214,508. The scheme also allowed Euceda-Hernandez to avoid paying higher premiums for adequate workers’ compensation insurance, costing the insurer nearly $580,000.
Euceda-Hernandez’s conviction underscores the severe consequences of engaging in tax and insurance fraud, particularly in industries like construction that rely heavily on workers’ compensation policies.
