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The manager of an off-the-books construction-worker payroll operation in Naples, Florida, pleaded guilty last week to a scheme that prosecutors said defrauded the U.S. government of $4 million and swindled insurers out of workers’ compensation premiums.

Alexis Garcia, manager of Tape Drywall Services Inc., and Carlos Alberto Hernandez were indicted in August. Garcia, also known as “Pedro,” pleaded guilty Aug. 18 to one count of tax fraud by failing to withhold taxes on workers. The indictment and the U.S. Department of Justice said he also defrauded workers’ comp insurers by underreporting payroll, from 2017 through 2019.

Contractors would write checks to Tape Drywall for workers that Garcia supplied for construction projects. Garcia and Hernandez would then cash the checks, retain a fee, and pay the workers in cash, avoiding tax withholding and insurance for many of them. Altogether, the operation cashed more than 3,600 checks totaling more than $28 million, prosecutors said.

Garcia’s sentencing date has not been set. He faces as much as five years in prison and some level of restitution. Garcia’s alleged co-conspirator, Hernandez, died in May and charges against him were dismissed, federal court records show.

The insurance companies defrauded in the scheme were not named in the indictment.

Photo: Drywall workers at work. (Adobe Stock image)

Topics Florida Workers' Compensation