Rene Mauricio Escobar and Juana Nelida Escobar, both residents of Orlando, were sentenced on May 6 by U.S. District Judge Wendy W. Berger for their roles in a large-scale construction payroll fraud scheme. Rene Escobar received four years and nine months in federal prison, while Juana Escobar was sentenced to two years’ imprisonment. The court ordered them to pay $37,174,388 in restitution to the Internal Revenue Service for unpaid payroll taxes, according to U.S. Attorney Gregory W. Kehoe.
The case highlights the impact of complex financial crimes on both taxpayers and honest businesses in the construction industry. Authorities said the scheme resulted in significant losses to the U.S. Treasury and allowed companies to avoid responsibility for tax payments and insurance coverage.
Court documents show that from December 2015 through August 2024, the defendants used their company, Escobar Plastering, to help subcontractors pay workers “off the books.” This enabled subcontractors to avoid paying payroll taxes and workers’ compensation premiums while also facilitating employment of undocumented workers not legally authorized to work in the United States. The defendants collected a fee of seven or eight percent from hundreds of subcontractors' payrolls by providing certificates of insurance that falsely represented coverage under their company’s policies.
As a result of these actions, insurers unknowingly covered hundreds more workers than reported; if properly disclosed, annual premiums would have totaled nearly $15 million. Over $148 million in payroll checks were processed through accounts controlled by Escobar Plastering without proper tax withholding or payment.
“Complex investigations such as this require the skills and diligence of dedicated investigators and prosecutors,” said U.S. Attorney Gregory W. Kehoe. “Because of the interagency cooperation and expertise displayed in this case, an intricate fraud scheme was unraveled, and the defendants were brought to justice.”
Ron Loecker, Special Agent in Charge at IRS Criminal Investigation’s Florida Field Office said: “Payroll and workers’ comp fraud doesn’t just break the law—it puts honest contractors at a competitive disadvantage... The actions by these defendants alone cost US taxpayers $37 million.”
Tim Hemker with Homeland Security Investigations Jacksonville added: “Multi-million-dollar payroll and worker’s insurance fraud schemes fuel the underground economy... By working in close partnership with IRS-CI, we uncovered this fraud.”
The investigation was conducted jointly by Homeland Security Investigations (HSI) and IRS Criminal Investigation as part of ongoing efforts targeting shell companies and "ghost" employees within Florida's construction sector.
