Orlando man defrauded IRS of $3.5 million in payroll taxes

An Orlando man who conspired with construction companies to pay undocumented workers “off the books,” which resulted in millions of dollars of lost payroll tax revenue to the Internal Revenue Service, will spend the next two and a half years behind bars.

Wendel Algarin was sentenced to 30 months in federal prison by U.S. District Judge Wendy W. Berger of the Middle District of Florida this week for conspiring to defraud the IRS.

According to court records, between 2012 and 2019, Algarin operated a scheme to assist various subcontractors in the evasion of payroll taxes and workers’ compensation insurance premiums.

Algarin conspired with the subcontractors to pay undocumented construction workers “off the books” and facilitated the offense by operating three shell companies. The shell companies were set up as the “employers” of the undocumented workers.

In return for his assistance with the scheme, Algarin was paid fees of nearly $2 million. According to authorities, Algarin used the returns to “live a lavish lifestyle,” including purchasing multiple “luxury automobiles.”

In total, Algarin defrauded the IRS out of more than $3.5 million in tax revenues, according to court records.

Algarin pled guilty to the charge on August 15, 2023.

“Mr. Algarin devised a plan to defraud the American taxpayer by establishing shell companies in the construction sector and evading employment taxes. Additionally, he employed undocumented workers, which harmed the workers’ compensation insurance industry,” said Tara K. Reed, IRS-Criminal Investigation (CI) Acting Special Agent in Charge. “Today’s sentencing demonstrates that IRS-CI is dedicated to investigating and building a just and impartial tax system in which all businesses can operate.”

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