Date: May 22, 2025
Contact: [email protected]
Jacksonville, FL – United States District Court Judge Wendy W. Berger has sentenced Ana Juanita Andrade-Reyes, a Honduran national illegally present in United States, to 37 months in federal prison in connection with her conviction for three counts of conspiracy to commit wire fraud and two counts of conspiracy to commit tax fraud. The court also ordered Andrade-Reyes to pay restitution to the IRS in the amount of $2,084,182. The court also entered a money judgment against Andrade-Reyes in the amount of $664,588, representing the proceeds of the wire fraud.
According to court documents, Andrade-Reyes established a shell company that purported to be involved in the construction industry. She obtained a workers’ compensation insurance policy in the name of the shell company to cover a minimal payroll for a few purported employees. She then “rented” the workers’ compensation insurance to work crews who had obtained subcontracts with construction contractors on projects in various Florida counties, as well as contractors in other states. She sent the contractors a certificate of insurance as “proof” that the work crews had workers’ compensation insurance, as required by Florida law. By sending the certificate, Andrade-Reyes falsely represented that the work crews worked for the shell company. Over the course of the scheme, Andrade-Reyes “rented” the certificates to dozens of work crews, defrauding the worker’s compensation carrier, typically allowing undocumented illegal workers to be employed unlawfully.
As part of the scheme, the contractors issued payroll checks for the workers’ wages to the shell companies and Andrade-Reyes cashed these checks, then distributed the cash to the work crews without withholding any payroll taxes. As part of the scheme, she deducted a fee, which was typically about 6% of the payroll. During the scheme, Andrade-Reyes cashed payroll checks totaling approximately $8 million. Neither the shell company nor the contractors reported to government authorities the wages that were paid to the workers, nor did they pay either the employees’ or the employer’s portion of payroll taxes – including Social Security, Medicare, and federal income tax. According to the IRS, the amount of payroll taxes due on the wages totaled $2,048,182.
The scheme also facilitated the avoidance of the higher cost of obtaining adequate workers’ compensation insurance for the work crews to whom Andrade-Reyes “rented” the workers’ compensation insurance. The policy that Andrade-Reyes purchased and then “rented” out was for an estimated payroll of $169,400 and the insurance company issued a policy for a premium of approximately $11,352. Had a workers’ compensation insurance policy been purchased for the actual payroll totaling approximately $5 million, the policy premium would have totaled about $591,978.
“A level playing field is essential for an industry to thrive in our society,” said Ron Loecker, Special Agent in Charge of IRS-Criminal Investigation’s Tampa Field Office. “Cheating to get an unfair advantage undermines that. No matter how sneaky you think you are, we will find out, we will investigate, and we will do everything we can to balance the free market by bringing you to justice.”
“Worker’s compensation insurance fraud schemes are a built on unlawful hiring practices of illegal aliens and are directly tied to our border security. These schemes drive down wages, compromise the safety and future of workers who are hurt on the job, and disadvantage law-abiding contractors through the increase of legitimate premiums,” said Homeland Security Investigations Assistant Special Agent in Charge Timothy Hemker. “Homeland Security Investigations, alongside our partners at the Internal Revenue Service, are committed to investigating the criminal networks that perpetuate these fraud schemes which inflict grave damage on the construction industry and incentivizes illegal immigration.”
This case was investigated by the Internal Revenue Service – Criminal Investigation, Homeland Security Investigations, and the Florida Department of Financial Services. It is being prosecuted by Assistant United States Attorney John Cannizzaro.
IRS-CI is the criminal investigative arm of the IRS, responsible for conducting financial crime investigations, including tax fraud, narcotics trafficking, money-laundering, public corruption, healthcare fraud, identity theft and more. IRS-CI special agents are the only federal law enforcement agents with investigative jurisdiction over violations of the Internal Revenue Code, obtaining a 90% federal conviction rate. The agency has 20 field offices located across the U.S. and 14 attaché posts abroad.