Florida Staffing Firm Head Sentenced to 24 Years for Off-Book Labor Scheme

From 2007 to 2021, federal prosecutors said, Mykhaylo Chugay and associates operated a number of shady staffing companies in south Florida that avoided paying more than $25 million in federal taxes.

Last week, a federal judge sentenced Chugay to 24 years in prison for his June conviction on crimes that included fraud, harboring illegal aliens and money laundering, according to prosecutors and news reports.

“The elaborate scheme organized by this organization took advantage of U.S. government programs designed to assist vulnerable populations seeking assistance and a better life here in the U.S. for their own personal gain,” Special Agent in Charge Anthony Salisbury of Homeland Security Investigations in Miami said in a news release.

Chugay was not charged with avoiding workers’ compensation insurance on laborers, but in similar schemes, the employer has failed to obtain comp insurance or has underreported payroll to insurers.

Chugay and associates owned labor-staffing companies in south Florida, including General Labor Solutions, Liberty Specialty Service, Paradise Choice, Paradise Choice Cleaning, Tropical City Services, and Tropical City Group, the Department of Justice said. The firms provided unauthorized alien workers to hotels, bars and restaurants in Key West and other places.

The companies paid the hotel and bar workers an hourly wage, then charged the establishments a fee of $1 to $3.50 for each hour worked, the Herald reported.

A jury convicted Chugay in June with the help of a government witness who made a deal with prosecutors, the Herald reported. After Chugay’s trial, Volodymyr Ogorodnychuk was sentenced to four years in prison for his part in the scheme that he helped run from 2016 to 2020.

Ogorodnychuk pleaded guilty to one count of conspiracy to defraud the United States and the IRS out of more than $3.5 million.

Topics Florida