News Summary
Three residents of Orlando, Eduardo Anibal Escobar, Carlos Alberto Rodriguez, and Adelmy Tejada, have been sentenced for their involvement in a large-scale payroll fraud scheme. They defrauded the IRS and workers’ compensation insurers out of millions by issuing over $146 million in illegitimate payroll checks. The court ordered them to pay nearly $37 million in restitution. Their actions also facilitated the employment of undocumented workers, reflecting serious violations of tax laws and insurance regulations.
Orlando – Three Orlando residents have been sentenced for their roles in a significant payroll fraud scheme that defrauded the IRS and several workers’ compensation insurers of millions of dollars. Eduardo Anibal Escobar, Carlos Alberto Rodriguez, and Adelmy Tejada were each found guilty of conspiracy to commit wire fraud and tax fraud. Their fraudulent activities resulted in more than $146 million in illegitimate payroll checks being issued, with substantial losses to federal and state revenue systems.
Escobar received a prison sentence of 4 years and 9 months. Rodriguez has been sentenced to 3 years and 4 months, while Tejada will serve 18 months in prison followed by an additional 6 months of home detention. All three defendants entered guilty pleas on April 3, acknowledging their roles in the extensive fraud operation.
As part of their sentencing, the trio has been ordered to pay restitution totaling $36,957,616 to the IRS for unpaid payroll taxes. Additionally, they must pay $397,895 collectively to two workers’ compensation insurance companies for claims that were improperly settled due to their fraudulent actions. This restitution highlights the financial impact of their fraudulent activities on both the U.S. Treasury and the state’s workers’ compensation system.
The fraudulent scheme orchestrated by Escobar, Rodriguez, and Tejada lasted from January 2015 to August 2024. During this period, they paid construction workers “off the books” to circumvent both payroll taxes and workers’ compensation insurance premiums. This illicit practice not only allowed them to pocket significant profits but also facilitated the employment of undocumented workers who were not authorized to work legally in the United States.
Escobar and Rodriguez operated through their respective companies, T. Escobar Construction and C. Escobar Construction. They partnered with hundreds of construction subcontractors, misleading them into an agreement where, in exchange for a percentage of their payroll (between 6 to 8 percent), they provided false certificates of insurance. These documents falsely indicated that subcontractors were covered under worker’s compensation insurance, shielding larger contractors from liability regarding payroll taxes.
Over the years of the scheme, a staggering $146 million in payroll checks were deposited into the defendants’ business accounts. However, after taking their cut, the defendants withdrew cash to compensate subcontractor workers, doing so without withholding or remitting any payroll taxes to the IRS. Consequently, this fraudulent scheme resulted in an estimated loss of $36,957,616 in federal revenue, as the defendants’ actions allowed construction contractors to evade their tax responsibilities while validating the illegitimate employment status of numerous workers.
The comprehensive investigation that led to their prosecution was carried out by various federal and state agencies, including the IRS Criminal Investigation, Homeland Security Investigations, and the Florida Department of Financial Services. This collaboration underscores the effectiveness of joint efforts among different governmental entities in addressing and prosecuting sophisticated financial crimes.
Evidence gathered during the investigation revealed the use of shell companies and “ghost” employees, which are common tactics in the construction industry to conduct fraudulent activities. The case was prosecuted by Assistant U.S. Attorney Arnold B. Corsmeier, while asset forfeiture proceedings are being managed by Assistant U.S. Attorney Jennifer M. Harrington. The convictions serve as a reminder of the severe consequences of financial crimes and the government’s commitment to uphold tax laws and workers’ compensation regulations.
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Additional Resources
- WESH: Orlando Residents Sentenced for Payroll Fraud
- Wikipedia: Payroll Fraud
- Fox 35 Orlando: Orlando Contractor Scamming Customers
- Google Search: Construction Fraud
- News Daytona Beach: Orlando Contractor Wanted for Scam
- Google Scholar: Fraud in Construction Industry
- Click Orlando: Unlicensed Contractor Arrested
- Encyclopedia Britannica: Workers Compensation Fraud
- Workers Compensation: Accidents Being Faked in NYC
- Google News: Contractor Fraud
