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Feds: Payroll Scam Nets $17.4M

Wednesday, April 20, 2016

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An Orlando woman faces decades in prison for allegedly running a scam that allowed construction contractors and subcontractors, including painters, to conceal the use of undocumented workers, according to federal authorities.

Orquidea Quezada, 48, reportedly funneled $17.4 million through her payroll business, Orquicely Construction LLC, U.S. Attorney A. Lee Bentley III recently announced.

Check
© iStock.com /  AudreyPopov

The subcontractors wrote payroll checks to Orquicely Construction for work performed by their employees, federal authorities claimed. Quezada then cashed those checks and paid the subcontractors’ employees in cash, the indictment says.

She faces 49 counts of wire fraud and one count of operating as an unlicensed money transmitter. Each wire fraud count carries a maximum penalty of 20 years in prison; the money transmitting count carries a five-year imprisonment penalty, prosecutors said.

Scheme Details

According to the indictment, for a three-year period, Quezada allegedly applied for and was issued workers’ compensation insurance policies to cover two to seven employees and an annual payroll of about $100,000.

Quezada would then “rent” out the insurance policies to numerous construction subcontractors who employed hundreds of workers, many of whom were undocumented, prosecutors alleged.

To execute the scheme she allegedly instructed her insurance agent to e-mail the subcontractors a "certificate of insurance" that implied the insurance would cover their workers. The subcontractors wrote payroll checks to Orquicely Construction for work performed by their employees, authorities claimed.

building construction
© iStock.com /  simazoran

Painters, plasterers, stucco and drywall companies were listed among the 49 businesses who were said to have used Orquicely Construction's payroll service, authorities said.

Quezada then cashed those checks and paid the subcontractors’ employees in cash, through work crew leaders, prosecutors said, noting that Quezada pocketed five percent of each check as a fee for her services.

Evading Taxes, Insurance

Neither Orquicely Construction nor the subcontractors deducted state or federal taxes, such as for Medicare and Social Security, from the workers’ pay, authorities alleged.

The scheme also allowed the subcontractors to evade workers’ compensation taxes, and to conceal their employment of undocumented individuals working illegally in the United States.

Businesses Listed

The indictment lists 49 Florida-based businesses that reportedly used the Orquicely Construction service, including painting, stucco and drywall contractors. None of them are named as defendants or face charges separately.

The Orlando Sentinel reportedly reached out to several of the companies listed who either were unfamiliar with Orquicely Construction or lacked knowledge of any illegal operation.

“I knew Orquicely as a stucco contractor,” Zane Williams of Z Properties told the news bureau. “I wrote checks to them for the work they performed. I didn’t know anything about illegal workers, although I know there are a lot of them in this industry.”

Jane Bender, owner of Orlando-based U.S. Walls LLC, said, “I’ve never heard of this company, nor have I ever written them a check.”

Authorities say the investigation is ongoing.

   

Tagged categories: Business matters; Business operations; Contractors; Ethics; Fraud; Government; Subcontractors; Workers

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