After Multi-Year Probe into Carolina Construction Payroll Scheme, 12 Get Probation

Twelve people with seven construction companies in South Carolina, who pleaded guilty to paying workers in cash and shirking tax and workers’ compensation obligations, have avoided prison time.

The U.S. Attorney for South Carolina said that most of the defendants were sentenced to probation and to home confinement. The federal judge imposed the light sentences because the people admitted guilt early on, agreed to assist authorities, and together paid almost $1 million of the $3 million owed to the Internal Revenue Service, prosecutors said.

The men and women were charged last year after a multi-year investigation into illegal construction payroll practices and the hiring of illegal aliens in the Myrtle Beach area. The construction firms would use unlicensed check-cashing services to facilitate under-the-table cash payments to workers, prosecutors said. The check cashers, pretending to be subcontractors, also would provide fake certificates of insurance purporting to show that the laborers were covered by workers’ compensation insurance.

At least $15 million in checks were cashed by the defendants, U.S. Attorney Corey Ellis said in a statement.

None of the defendants had prior criminal convictions, but some of them have lost their homes, now face deportation, and will be unable to legally work in the United States.

“This case should be a message to businesses and individuals who try to get ahead by breaking the law: it is not worth it because we are watching you and we will prosecute you,” Ellis said.

The off-the-books hiring of undocumented aliens and the use of fake workers’ compensation certificates has been a huge issue in the construction industry for decades. Legitimate contractors and workers have complained that they lose out to firms that employ the illicit practices and can often do the work at lower cost.

Topics Construction