Illegal Alien Sentenced 8 Years For $89 Million Payroll Tax Fraud Scheme

Interesting department of justice, fraud, honduras, illegal alien, illegal immigrant, internal revenue service, taxes admin June 25, 2026 0 Comments

Illegal Alien Sentenced 8 Years For $89 Million Payroll Tax Fraud Scheme

An illegal alien from Honduras was sentenced to eight years in prison Wednesday for operating an $89 million, years-long off-the-books cash payroll scheme used to employ illegal immigrants, the Department of Justice (DOJ) said.

The Honduran national, Mario Flores, pleaded guilty in March to one count of conspiracy to defraud the United States and another count of conspiracy to operate an unlicensed money-transmitting business, according to a DOJ statement. (RELATED: Illegal Alien Charged In Attempted Abduction Had Been Released By Soros-Backed DA Now Under Investigation)

Between 2015 and 2022, Flores conspired to create a series of shell companies used to run an unlicensed check-cashing and cash-courier service business that cashed approximately $89 million in checks for construction subcontractors. The construction contractors and subcontractors then used the cash to pay their workers without paying taxes, allowing the businesses to hire illegal immigrants.

To conceal the scheme, Flores also caused the filing of false tax returns with the Internal Revenue Service (IRS), according to the DOJ, which estimated that the scheme resulted in more than $38 million in losses to the United States.

“This case exposes how unchecked illegal immigration fuels widespread payroll tax fraud and underground economies that harm American workers and taxpayers,” Assistant Attorney General Colin M. McDonald of the DOJ’s National Fraud Enforcement Division said in the statement. “This sentence sends a strong message: Those who exploit our open borders, cheat the U.S. Treasury, and violate federal laws will face justice.”

Iris Villafranca, Osman Zapata, and Francisco Alvarez were also previously sentenced for conspiring with Flores, the DOJ said, receiving sentences of 17 years, four years, and four years, respectively.

Flores and his co-conspirators also defrauded workers’ compensation insurance companies by leasing certificates of insurance to contractors while providing “false and fraudulent information to the insurers.”

“Those who orchestrate large-scale payroll tax fraud and facilitate the illegal employment of unauthorized workers will be held accountable,” Homeland Security Investigations Acting Executive Associate Director John Condon said in the statement. “HSI, alongside IRS Criminal Investigation and our federal, state, and local partners, remains dedicated to dismantling schemes that defraud the United States and undermine the integrity of our workforce.”