A Florida man who created shell construction companies to help contractors evade millions of dollars in payroll taxes has been sentenced to 30 months in prison.
Wendel Algarin of Orlando was sentenced by U.S. District Judge Wendy W. Berge of the Middle District of Florida for the elaborate tax evasion scheme.
“Mr. Algarin devised a plan to defraud the American taxpayer by establishing shell companies in the construction sector and evading employment taxes,” said Tara K. Reed, IRS criminal investigation acting special agent in charge. “Additionally, he employed undocumented workers, which harmed the workers’ compensation insurance industry.”
According to court records, between 2012 and 2019, Algarin operated a tax fraud scheme to assist multiple contractors in the evasion of payroll taxes and workers' compensation insurance premiums.
He conspired with the subcontractors to pay their undocumented workers “off the books.”
Tax payments were avoided as subcontractors listed their employees' employer as one of three shell companies that Algarin had created. For his role in the scheme, he was paid a fee of nearly $2 million.
His portion of the funds provided him with a lavish lifestyle, such as purchasing multiple luxury cars.
According to court documents, Algarin defrauded the federal government out of more than $3.5 million in tax revenues.
He pleaded guilty to the charge on August 15, 2023.
This case was investigated by the Internal Revenue Service – Criminal Investigation. It was prosecuted by Assistant United States Attorney Chauncey A. Bratt.
Reed said Algarin’s sentencing is a demonstration of the IRS-CI’s dedication to investigating and building a just and impartial tax system in which all businesses can operate.
