United States District Court Judge Wendy W. Berger has sentenced Ana Juanita Andrade-Reyes, a Honduran national unlawfully in the United States, to 37 months in federal prison for multiple counts of wire fraud and tax fraud. She is also ordered to pay restitution of $2,084,182 to the IRS and a money judgment of $664,588, reflecting her gains from the fraud.
Andrade-Reyes created a shell company claiming to operate in the construction industry and obtained a workers’ compensation insurance policy for limited employees. She then “rented” this insurance to work crews that had contracts with construction contractors in Florida and other states, providing them with fake certificates of insurance. This allowed her to employ undocumented workers illegally while defrauding the workers’ compensation carrier.
Contractors paid payroll checks to Andrade-Reyes’s shell company, which she cashed and gave the crews in cash, without withholding payroll taxes. She charged a typical fee of about 6% on these payrolls. Throughout the scheme, she cashed checks totaling about $8 million. Neither she nor the contractors reported wages to authorities or paid payroll taxes, totaling $2,048,182 owed to the IRS.
Her scheme not only undercut legitimate businesses but also avoided higher costs for proper workers’ compensation insurance. The policy she obtained was based on a payroll of $169,400, while actual payroll costs neared $5 million, which would have resulted in significantly higher premiums.
Homeland Security Investigations and the IRS are focused on exposing fraud schemes that exploit illegal hiring practices and harm the construction industry and law-abiding contractors. This case was investigated by Homeland Security Investigations, the IRS – Criminal Investigation, and the Florida Department of Financial Services, and is being prosecuted by Assistant United States Attorney John Cannizzaro.
