US District Judge Wendy W. Berger was sentenced to Ana Juanita Andredo Reyes, a Honduras national in the United States, in a federal prison for multiple numbers of wire fraud and tax fraud. She has also been ordered to pay the IRS $2,084,182 in reparations and to make a judgment of $664,588 in money, reflecting the benefits from fraud.
Andrade-Reyes founded a shell company that claims to operate in the construction industry, and won workers’ compensation insurance policies for its limited employees. She then “rented” the insurance, signed with construction contractors in Florida and other states, and worked with crews who provided fake insurance cards. This allowed her to illegally hire undocumented workers while scamming workers’ compensation carriers.
The contractor paid a paycheck to Shell Company in Andrade-Reyes. She charged about 6% of the typical fees for these salaries. Throughout the scheme, she cashed out a check total of around $8 million. Neither she nor the contractor owed the IRS a total of $2,048,182 because they did not report wages to authorities or paid payroll taxes.
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Her scheme not only took away the legal business, but also avoided the higher costs of proper workers’ coverage insurance. The policy she acquired was based on a salary of $169,400, but the actual salary cost approached $5 million, resulting in a much higher premium.
Homeland Security Investigations and the IRS focus on publishing fraud schemes that leverage illegal employment practices and harm the construction industry and law-abiding contractors. The case has been investigated by the Homeland Security Investigation, the IRS-Criminal Investigation, and the Florida Department of Financial Services and is being charged by Assistant US Attorney John Canisaro.
