Largest Criminal IRS Operation In History Finally Shut Down

( In the largest criminal Internal Revenue Service (IRS) investigation in the Pee Dee region’s history, twelve defendants from seven construction-related enterprises were convicted for employment tax fraud offenses and charges linked to recruiting unlawful foreigners.

The convictions are the first to result from an extensive multi-year undercover operation launched by the IRS and Homeland Security Investigations in the Myrtle Beach region and around the South Carolina coast (HSI).

The investigation targeted construction companies that employed unlicensed check cashers to enable under-the-table cash payments to employees, many of whom were illegal foreigners.

The check cashers would also falsify insurance certificates, claiming that workers’ compensation insured the employees.

The United States was cheated of applicable employment taxes on the employees due to these off-the-books payments.

Assistant US Attorney Derek Shoemake said they’d meet with a person, sometimes literally in a grocery store or fast-food parking lots, and they’d swap a check for a bag of cash. They’d also be given a bogus certificate of insurance. If an inspector arrived at the working site, they’d be able to demonstrate to him that all of these workers are legitimate.

These defendants cashed at least $15 million in checks, causing the government to lose millions of dollars. According to the research, similar tactics have resulted in at least tens of millions of dollars in tax losses throughout the South Carolina coast.

The defendants, none of whom had a criminal record before the inquiry, are now all convicted felons. Many face deportation, have lost their homes and are facing financial ruin, and will never be able to return to the profession they have spent their lives pursuing. This case should serve as a warning to corporations and individuals who try to get an advantage by breaching the law – It’s not worth it because they’re watching and will prosecute you.

According to the evidence provided to the court, the IRS and HSI began investigating illegal check-cashing in the construction business in the Myrtle Beach area and other areas along the South Carolina coast in late 2018.

Each defendant was sentenced to five years of probation by Chief United States District Judge R. Bryan Harwell, with all except one receiving home confinement. In addition, the Court ordered that each Defendant pay compensation to the Government for the tax losses they generated. The probation sentences were imposed in part because the defendants admitted guilt early, agreed to cooperate with authorities, paid nearly a million dollars toward the approximately $3 million in restitution owed to the IRS, and agreed to make monthly payments – in most cases, substantial payments – until the IRS was made whole.