LAWFUEL – R. Alexander Acosta, United States Attorney for the Southern District of Florida, Betty N. Stewart, Acting Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Miami Field Office, and Douglas Colon, Special Agent in Charge, United States Department of Labor, Office of Inspector General, Office of Labor Racketeering and Fraud Investigation, announce the unsealing of a twenty-one count Indictment against defendants Enrique Guevara, Erick Brandon, and Alexandra Cordero, on charges that they participated in a mail fraud conspiracy to provide false workers’ compensation insurance certificates for hundreds of construction workers, in violation of Title 18, United States Code, Sections 1349 and 1341. In addition, the Indictment charges defendant Guevara with a tax fraud conspiracy and with aiding the filing of a false tax return, in violation of Title 18, United States Code, Section 371, and Title 26, United States Code, Section 7206(2). Marco A. Sandi, the owner of Sandi Construction, Inc., a Broward-based company, is named as an unindicted co-conspirator.
This matter concerns a scheme to provide false workers’ compensation insurance certificates to general contractors on public and private construction projects throughout South Florida. Under Florida law, a general contractor, contractor or subcontractor who engages in any public or private construction must secure and maintain adequate workers’ compensation insurance. In high risk or dangerous work, the rate for workers’ compensation insurance can be as high as 50% of the payroll.
The Indictment alleges that Sandi and defendants Guevara, Brandon, and Cordero participated in a conspiracy in which Sandi Construction fraudulently represented to general contractors in the construction industry that Sandi Construction workers were insured, as required under Florida law. In fact, however, they were not.
Specifically, Sandi obtained legitimate workers’ compensation insurance policies for six workers, with premiums on the policies based on a declared annual payroll of $93,000. From June 2005 to June 2006, Sandi Construction obtained this insurance policies from defendant Brandon, an employee at Emmanuel Insurance & Associates, located in Hialeah, Florida. Subsequently, from June 2006 to the date of Indictment, Sandi Construction obtained the insurance policies from defendant Cordero, a broker at Best Insurance Choice Corp, located in Coral Springs, Florida. Although the Sandi Construction insurance policies covered six workers, Brandon and Cordero provided the general contractors with Sandi Construction insurance certificates purportedly covering hundreds of workers.
Through this scheme, between June 2005 and June 2006, Sandi Construction supplied workers to approximately 186 general contractors in 12 Florida counties and received approximately $11,725,275 in payments from these contractors. Similarly, from June 2006 to the date of Indictment, Sandi Construction supplied workers to 125 general contractors and received payments totaling approximately $9,202,067. In addition, Sandi Construction’s actual payroll was much greater than the $93,000 that Sandi had initially declared to the insurance companies to obtain coverage for six employees. Consequently, Sandi Construction avoided paying approximately $4,000,000 in insurance premiums.
Furthermore, according to the Indictment, defendant Guevara, the owner and operator of A/Z Accounting Corp., a Broward County accounting and bookkeeping business, participated in the scheme by creating fictitious payroll records, paychecks, Internal Revenue Service reporting documents, including Wage and Tax Statements (Form W-2a) and Form 1099s, and preparing and filing false corporate tax returns for Sandi Construction.
United States Attorney Acosta stated, “Because the costs of workers’ compensation insurance can be as high as 50% of payroll, an unscrupulous labor broker who elects to ignore the law can provide work for a much cheaper rate. The result is that the honest business cannot compete. Workers, too, suffer, as the honest business is pushed aside by the unscrupulous labor broker, who profits at workers’ expense. We are committed to prosecuting these cases to help ensure that unscrupulous businesses do not cut corners, break the law, and endanger the lives of workers.”
IRS Criminal Investigation, Acting Special Agent in Charge, Betty N. Stewart stated, “Filing false income tax returns or assisting others in the preparation and filing of false returns is a crime. The IRS will continue to aggressively investigate those who do not comply with the tax laws.”
Department of Labor, Office of Inspector General, Special Agent in Charge, Douglas Colon, stated, “By allegedly scheming to falsely obtain workers’ compensation insurance for several hundred construction workers, the defendants defrauded the workers, their employers, and the insurance companies for personal gain. We will continue to work with our law enforcement partners to aggressively investigate individuals who engage in these kinds of criminal activities.”
Mr. Acosta commended the investigative efforts of the Internal Revenue Service–Criminal Investigation and the Department of Labor–Office of Inspector General-Office of Labor Racketeering and Fraud Investigation. The case is being prosecuted by Assistant United States Attorneys Jeffrey E. Tsai and Luis M. Perez.
A copy of this press release may be found on the website of the United States Attorney’s Office for the Southern District of Florida at . Related court documents and information may be found on the website of the United States District Court for the Southern District of Florida at or .