The IRS convicted Hugo Cruz-Medina, a 33-year-old from Jacksonville, Fl., of several counts of mail and wire fraud, conspiracy to defraud the United States, and illegally entering the country after being deported. He received a three-to-five-year sentence in federal prison and orders to pay his victims $3,266,506.33 in restitution, as well as a punitive amount of $1,408,712.08, which were the proceeds of his mail and wire fraud.
Cruz-Medina pleaded guilty.
Cruz-Medina operated a construction contracting business in Jacksonville that partially paid workers off the books. By paying them in this manner, Cruz-Medina avoided paying the full amount of owed payroll taxes. His under-the-table payment system cost the U.S. Treasury about $1,857,000.
Further charges to Cruz-Medina come from his underreporting hours worked by his off-the-books employees; in doing so, he defrauded the workers’ compensation insurer and payroll management vendors. Both of whom relied on false statements to calculate their cost of services. This false reporting added up to about $1,408,000.
Cruz-Medina, a Mexican citizen, operated his business legally within the United States. However, after being deported in 2012, authorities later arrested him when he reentered the country illegally.
The IRS ran the investigation and prosecution of Cruz-Medina, in conjunction with Criminal Investigation, Homeland Security, the U.S. Department of Labor Office of Inspector General, and the Florida Department of Financial Services. U.S. Attorney Michael J. Coolican brought the case to court.
Hugo Cruz-Medina will spend the next 3 to 5 years in federal prison and pay restitution for all fraud charges brought against him by the IRS and Florida state.