MYRTLE BEACH, S.C. (WBTW) — Twelve people pleaded guilty to charges related to employment tax fraud and unlawfully hiring undocumented citizens in what federal officials said is the largest criminal IRS operation in the region’s history.
The individuals are tied to seven construction-related companies, according to the U.S. Attorney’s Office.
In late 2018, the IRS and Homeland Security Investigations (HSI) began investigating illegal check cashing among construction companies in the Myrtle Beach area and along the South Carolina coast.
The investigation found that several construction companies would use the check cashers to hire undocumented citizens and avoid paying employment taxes on their workers, according to the release.
Members of a construction company would meet with an unlicensed check casher in parking lots of retail stores or coffee shops, according to the attorney’s office. The company would give the check casher a check made out to a created company and in turn the check casher would give the company a bag of money that would be used to pay the employees.
The check cashers would also give false certificates of insurance stating their workers were covered under worker’s compensation insurance, according to the U.S. Attorney’s Office.
“It also victimizes these workers,” Derek Shoemake, the assistant U.S. Attorney said. “These workers on these job sites were working with no insurance. If one of these gentlemen or ladies fell off a ladder there’s no actual insurance. So, this was a pervasive scheme that was harmful on many levels,” Shoemake said.
Officials estimate that at least $15 million in checks were cashed by the 12 individuals, which resulted in millions of dollars of losses.
It’s estimated that at least tens of millions of tax dollars have been lost along the South Carolina coast due to similar schemes.
“Those who steal from the Government, and by extension the American taxpayers, will not find refuge in South Carolina,” acting U.S. Attorney Rhett DeHart said in a news release.
Various IRS undercover agents recorded multiple interactions with the individuals in 2019.
The following people have pleaded guilty so far. None of the businesses have entered plea agreements, just the individuals:
- Daniel A. Lavoie, 49, of Conway (Daniel Lavoie Construction Services)
- Enrique R. Reyes, 48, of Conway (Daniel Lavoie Construction Services)
- Walter A. Duran, 45, of Myrtle Beach (Duran Masonry)
- Lisa Caulley Sellers, 57, of Myrtle Beach (Duran Masonry)
- Ming Xue Nan, 52, of Myrtle Beach (Extreme Siding)
- Katherine L. Welker, 39, of Myrtle Beach (Extreme Siding)
- Marylany Hardman Levino, 36, of Myrtle Beach (Master Homes Calabash)
- Josafa P. Neto, 43, of Myrtle Beach (Master Homes Calabash)
- Saul Prieto, 56, of Myrtle Beach (Metro Concrete Finishers)
- Martha E. Zarate, a/k/a Martha E. Prieto, 54, of Myrtle Beach (Metro Concrete Finishers)
- Marcos Caetano De Almeida, 45, of Myrtle Beach (Master Homes Design Center)
- Johanna A. Carpio, 38, of Myrtle Beach (Paint by Numbers)
Each individual faces up to five years in federal prison for conspiracy to defraud the United States, six months in federal prison for unlawful employment of aliens, and a fine of up to $250,000 and $3,000 for each unauthorized alien plus three years of supervision after release.
Each individual has also agreed to pay just under $3 million in restitution to the IRS, according to the U.S. Attorney’s Office.
The Myrtle Beach Police Department also assisted in the investigation.
“The Myrtle Beach Police Department remains committed to enhancing the quality of life for everyone who lives, visits or works in our city,” Master Cpl. Tom Vest said in a statement to News13. “Our officers work to build partnerships and make a difference in this community every day. Working with our federal partners on cases like this is what makes the difference that we strive for and our community expects of us. While we cannot be specific in the role that our officers played in the case, we can say that it was in a primarily undercover capacity and that we will continue to work closely with federal investigators as this case continues forward. We are here to help every member of our community and to provide the very best in law enforcement services. Together, we want to thank your team and our federal partners for their hard work and dedication in this case.”
Federal officials said this is part of a much larger investigation.
This is a developing story. Refresh for updates.