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THREE FLORIDA RESIDENTIAL CONTRACTORS CONVICTED OF CONSPIRING TO PAY THEIR WORKERS OFF THE BOOKS

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Omaha Steve Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-24-09 10:39 PM
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THREE FLORIDA RESIDENTIAL CONTRACTORS CONVICTED OF CONSPIRING TO PAY THEIR WORKERS OFF THE BOOKS

http://gangbox.wordpress.com/2009/01/24/three-florida-r... /

January 24, 2009

from the UNITED STATES ATTORNEYS OFFICE, SOUTHERN DISTRICT OF FLORIDA:

RHODE ISLAND RESIDENT SENTENCED
FOR HIS ROLE IN A SOUTH FLORIDA
PAYROLL TAX EVASION SCHEME

December 19, 2008

FOR IMMEDIATE RELEASE

R. Alexander Acosta, United States Attorney for the Southern
District of Florida, and Betty N. Stewart, Acting Special Agent
in Charge, Internal Revenue Service, Criminal Investigation
Division (IRS-CID), announced today that defendant James
R. Monahan, 45, formerly of Palm Beach County, FL, was
sentenced to 30 months imprisonment, to be followed by 2
years of supervised release after pleading guilty to his role in
a long-term federal payroll tax evasion scheme involving two
South Florida residential construction businesses.

Specifically, Monahan pled guilty to a two count Information,
dated December 14, 2006, which charged him with
conspiracy to evade employment taxes and to defraud the
IRS, in violation of Title 18, United States Code, Section 371;
and to causing a financial institution to file false currency
transaction reports (CTRs), in violation of Title 18, United
States Code, Sections 5324(a)(2) and 5324(d)(2).

According to documents filed in court and court testimony,
Monahan was the owner of Northeast Custom Builders, Inc.,
a corporation ostensibly involved in residential construction.
Defendant Monahan unlawfully enriched himself by aiding
and assisting in the fraudulent evasion of payment of federal
payroll taxes on wages paid to the employees of Kodiak
Construction and Management, Inc. (Kodiak), a West Palm
Beach, FL, business, and Woodys Construction, Inc.
(Woodys), a business previously located in Margate, FL.
Monahan conspired with others, including Lucky Mata, the
owner of Kodiak, and Leroy Edward Felt, Jr., the owner of
Woodys, to defraud the IRS by paying cash wages to many
of Kodiaks and Woodys employees, and thus did not
withhold or pay payroll taxes on these wages.

To execute the fraud, Mata, Felt and others issued large
corporate checks to various individuals and entities for
fictitious subcontracting expenses. Some of these checks
were issued to Monahans company, Northeast Custom
Builders. Monahan would, in turn, cash the corporate checks
at financial institutions, retaining a portion of the cash as a
check cashing fee, and return the remaining cash to Mata,
Felt and others for use in paying wages. When cashing the
checks, Monahan did not disclose to the banks that the
checks were being cashed for the benefit of Kodiak or
Woodys, causing the financial institutions to file CTRs that
did not contain accurate information about the purpose of the
checks.

On February 25, 2008, Lucky Mata was sentenced to serve
a total of ten years in prison after having been convicted at
trial on multiple charges relating to his evasion of federal
payroll taxes. Kodiak underpaid its federal payroll taxes by
nearly $3,000,000 between 1994 and 2005, during which time
it paid its workers nearly $18,000,000 in cash payments
without any employer withholding.

FULL story at link.

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Adsos Letter Donating Member (1000+ posts) Send PM | Profile | Ignore Sat Jan-24-09 11:23 PM
Response to Original message
1. This has been common practice in many non-union crews for as long as I can remember...
Edited on Sat Jan-24-09 11:25 PM by Adsos Letter
part of the wages go onto the check, part in cash. Year-end bonuses (some quite large...cash). Side jobs supplied, where the employer supplies the customer, takes 5% off the top, and arranges for the crew to be paid in cash. etc., etc...

I worked in the trades for 31 years, and this practice was common, if one wanted to play the game.

I always opted for straight on-the-books pay...(with the exception of a couple of side jobs).

Workers who go this route generally end up getting screwed, benefits-wise...
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