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January 22, 2025Jacksonville, FL, United StatesFinancial Crimes

Honduran national sentenced in $14+ million payroll scheme to defraud IRS, workers’ compensation insurance company

JACKSONVILLE, Fla. — A Mexican national was sentenced to more than two years in prison and ordered to pay more than $3.5 million in restitution to the Internal Revenue Service (IRS) for conspiracy to commit wire fraud and conspiracy to defraud the United States following a Homeland Security Investigations (HSI) Jacksonville investigation.

Jose Molina-Herrera, 27, of Honduras, was sentenced to 27 months in federal prison. The court also ordered Molina-Herrera to forfeit $867,005, which are proceeds of the wire fraud offense. In addition, Molina-Herrera was ordered to pay a total of $3,558,579.42 in restitution to the IRS. Molina-Herrera entered a guilty plea on Nov. 1, 2024.

“Wire fraud and the facilitation of ‘off the books’ payments not only undermine the integrity of our legal and economic systems but also supports unlawful employment activities,” said HSI Jacksonville Assistant Special Agent in Charge Tim Hemker. “Homeland Security Investigations, alongside our partners at the Internal revenue Service – Criminal Investigations and the Florida Department of Financial Services – Bureau of Insurance Fraud, is committed to holding those who facilitate these complex fraud schemes accountable for their actions.”

According to court documents, between 2019 and 2020, Molina-Herrera conspired with others to facilitate the payment of construction workers “off the books” to avoid paying premiums for workers’ compensation insurance and payroll taxes. Construction contractors and subcontractors entered arrangements with the conspirators, through which All National Remodeling LLC — a shell company formed by Molina-Herrera — facilitated both the distribution of proof of insurance and the payment of workers with cash. In exchange for 6 percent to 8 percent of the contractors’ and subcontractors’ payroll, Molina-Herrera and others caused the distribution of certificates of liability insurance in the name of All National Remodeling, which contractors and subcontractors then used as nominal proof that workers were supposedly insured. In reality, All National Remodeling’s insurance policy was issued based on a fraudulent application that never disclosed that contractors and subcontractors would be employing workers who were ostensibly insured under the shell company’s barebones insurance policy. As a result of contractors and subcontractors using All National Remodeling’s proof of insurance, but never paying any insurance premiums, the insurance company was defrauded more than $2.2 million.

Molina-Herrera and others also facilitated the deposit of checks into the shell company’s bank accounts, as well as the withdrawal of cash to be paid to workers — all without withholding, or paying over, payroll taxes to the IRS. Through these arrangements with the conspirators, the construction contractors and subcontractors could disclaim responsibility for withholding and paying payroll taxes to the IRS or ensuring that the workers were legally authorized to work in the United States. By facilitating payments to workers of over $14 million without payroll taxes being withheld, Molina-Herrera and his co-conspirators caused the U.S. Treasury to lose more than $3.5 million in tax receipts.

One of Molina-Herrera’s co-conspirators, Oscar Molina-Avila, was previously sentenced to 52 months’ imprisonment for his role in the scheme.

“Using shell companies to pay workers under the table is not only illegal, it gives an unfair competitive advantage that businesses who do things the right way can’t match,” said Ron Loecker, Special Agent in Charge of IRS-Criminal Investigation’s Tampa Field Office. “We will continue to investigate these schemes to ensure compliance with the law and return competitive balance to the industry.”

This case was investigated by the Internal Revenue Service – Criminal Investigation, HSI Jacksonville, and the Florida Department of Financial Services – Bureau of Insurance Fraud. It was prosecuted by Assistant U.S. Attorney Michael J. Coolican.

HSI Tampa’s area of responsibility, which includes 10 geographically strategic offices, covers more than 51,600 square miles of the total 65,757 square miles in the state of Florida. This region has more than 14.2 million people and includes 58 of the 67 counties. HSI Tampa also includes five of the 10 largest cities in Florida, 15 primary commercial service airports, and 11 seaports.

Learn more about HSI Tampa’s mission to increase public safety in Florida communities on X, formerly known as Twitter, at @HSITampa.

Updated: 06/13/2025