United States District Judge Wendy W. Berger sentenced Pablo Isila Euceda-Hernandez, 36, a Honduran national illegally residing in the United States, to 27 months in federal prison for his role in a large-scale conspiracy to commit wire fraud and tax fraud. In addition to the prison sentence, Euceda-Hernandez was ordered to pay restitution to the IRS totaling $1,214,508, and a money judgment of $336,029 was entered against him, representing the proceeds of his wire fraud activities.
Court documents reveal that Euceda-Hernandez created a shell company that he falsely presented as part of the construction industry. He acquired a workers’ compensation insurance policy under the company for a small payroll and then “rented” this insurance to work crews employed on various construction projects across Florida and other states. Euceda-Hernandez provided the contractors with certificates claiming that the workers were covered by insurance, although they were not employed by the shell company, allowing contractors to avoid insurance costs and employ undocumented workers.
As part of the scheme, contractors issued payroll checks for the workers’ wages to the shell company. Euceda-Hernandez cashed these checks and distributed the funds to the workers, after deducting his usual fee of about 6%. Over the course of the operation, he cashed approximately $5 million in payroll checks, but neither the shell company nor the contractors reported the wages to the government, nor did they pay the necessary payroll taxes, including Social Security, Medicare, and federal income tax. According to the IRS, the total amount of unpaid payroll taxes amounted to $1,214,508.
In addition to tax evasion, the fraudulent scheme allowed contractors to avoid the significantly higher cost of obtaining legitimate workers’ compensation insurance for the workers employed on the projects. Euceda-Hernandez’s workers’ compensation policy was for a payroll of just $169,400, while the actual payroll for the workers involved in the fraud totaled around $5 million, resulting in an insurance premium discrepancy of over $580,000.
Homeland Security Investigations (HSI) Assistant Special Agent in Charge, Tim Hemker, emphasized that such fraudulent schemes jeopardize the integrity of industries like construction, undermine legal protections for workers, and exploit systems meant to ensure fairness. Similarly, IRS-Criminal Investigation Special Agent in Charge Ron Loecker stated that Euceda-Hernandez’s actions unfairly impacted legitimate businesses and encouraged a violation of tax and labor laws.
The case was investigated by Homeland Security Investigations, the Internal Revenue Service – Criminal Investigation, and the Florida Department of Financial Services, with prosecution led by Assistant United States Attorney John Cannizzaro.
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