TWO ORLANDO RESIDENTS SENTENCED FOR $148 MILLION CONSTRUCTION PAYROLL SCHEME THAT DEFRAUDED THE IRS AND WORKERS' COMPENSATION INSURERS

The following information was released by the U.S. Department of Justice:

Rene Mauricio Escobar (55) and Juana Nelida Escobar (36), residents of Orlando, have been sentenced by U.S.District Judge Wendy W. Berger for conspiracy to commit tax fraud and conspiracy to commit wire fraud. Rene Escobar was sentenced to four years and nine months in federal prison. Juana Escobar was sentenced to two years' imprisonment. The court also ordered the defendants to pay $37,174,388 in restitution to the IRS for unpaid payroll taxes. U.S. Attorney Gregory W. Kehoe made the announcement.

Juana Escobar pleaded guilty on July 8, 2025, and Rene Escobar pleaded guilty on November 20, 2025.

Juana Escobar is a legal permanent resident from Mexico. Her conviction will likely result in her deportation from the United States. Rene Escobar is a naturalized U.S. citizen from Ecuador.

According to court documents and information presented in court, over the period of approximately December 2015 through August 2024, the defendants conspired to facilitate the payment of construction workers "off the books" to avoid paying payroll taxes and workers' compensation insurance premiums. The scheme also facilitated the employment of undocumented workers who were not legally authorized to work in the United States. The defendants, through their company, Escobar Plastering, entered into agreements with hundreds of construction subcontractors to enable the subcontractors to obtain contracts with, and perform work for, construction contractors. In exchange for 7% to 8% of the subcontractors' payroll, the defendants caused certificates of insurance in the name of the defendants' company to be sent to construction contractors from which the subcontractors wished to obtain work, representing that the subcontractors worked for their company and were covered by the company's workers' compensation insurance. In fact, the company's insurance policies were based on applications representing that the policies would cover a handful of employees and a minimal payroll.

As a result of the defendants' using their certificate of insurance to represent that the subcontractors worked for their company, the insurers unwittingly covered hundreds of workers. If the insurers had known the amount of payroll they were in fact covering, they would have charged annual premiums totaling approximately $14,878,207. Thousands of payroll checks totaling approximately $148,760,824 were deposited into bank accounts of the defendants' company, from which they withdrew cash to pay the subcontractors' workers, after subtracting their 7% to 8% fee, which totaled, at 7%, approximately $10,413,258all without withholding, or paying over, payroll taxes to the IRS. As a result, the U.S. Treasury lost $37,174,388 in unpaid payroll taxes. The defendants' scheme allowed the construction contractors and subcontractors to disclaim responsibility for paying payroll taxes to the IRS, for ensuring that adequate workers' compensation insurance was obtained, and for verifying that the workers were legally authorized to work in the United States.

"Payroll and workers' comp fraud doesn't just break the lawit puts honest contractors at a competitive disadvantage," said Ron Loecker, Special Agent in Charge, IRS Criminal Investigation, Florida Field Office. "Don't be fooled into thinking these schemes are victimless crimes. The actions by these defendants alone cost the US taxpayers $37 million. Alongside our law-enforcement partners, IRS Special Agents will keep exposing complex schemes that exploit workers and steal from American taxpayers."

"Multi-million-dollar payroll and worker's insurance fraud schemes fuel the underground economy, create unfair advantages over honest businesses, and put workers at risk, especially when these schemes exploit illegal alien workers for personal gain," said Homeland Security Investigations Jacksonville Assistant Special Agent in Charge Tim Hemker. "HSI is committed to dismantling complex criminal enterprises that exploit our financial and labor systems and exploit workers. By working in close partnership with IRS-CI, we uncovered this fraud, and these criminals will now be held accountable for their actions."

This case was the result of a joint investigation conducted by Homeland Security Investigations (HSI) and IRS Criminal Investigation (IRS-CI), working collaboratively as part of the Homeland Security Task Force (HSTF). The Florida Department of Financial Services also assisted with this investigation. It is part of a continuing investigation by those agencies of the use of shell companies and "ghost" employees in the construction industry. It is being prosecuted by Assistant United States Attorney Arnold B. Corsmeier.The asset forfeiture is being handled by Assistant United States Attorney Clint Locke.