An undocumented Honduran immigrant has been sentenced to eight years in prison for operating a years-long cash payroll scheme that facilitated the employment of other illegal migrants in the U.S. and caused more than $38 million in lost revenue to the U.S. government.

Alongside several accomplices, Mario Flores created a series of shell companies and ran an unlicensed check cashing and cash courier service business from 2015 to 2022. The company cashed about $89 million in checks from subcontractors in the construction industry, according to a Justice Department press release on Thursday. They charged the subcontractors a percentage of the dollar amount of the checks they cashed as fees for the service.

Through the scheme, construction contractors and subcontractors paid their workers in cash without withholding and paying required taxes. Flores also filed false tax documents with the IRS in an effort to hide the scheme.

“This case exposes how unchecked illegal immigration fuels widespread payroll tax fraud and underground economies that harm American workers and taxpayers,” Assistant Attorney General Colin McDonald of the Justice Department’s National Fraud Enforcement Division said in a statement.

President Trump established the National Fraud Enforcement Division in early April in an effort to uncover fraud across the states, appointing Vice President J.D. Vance as “fraud czar.” In the months since, Vance has uncovered operations in California, Minnesota and Maine, among other states.

Flores and his conspirators also defrauded workers’ compensation insurance companies by leasing their insurance certificates to contractors and giving insurers false information about how many workers were covered and how much money they were paid.

“Those who orchestrate large-scale payroll tax fraud and facilitate the illegal employment of unauthorized workers will be held accountable,” HSI Acting Executive Associate Director John Condon said. “Homeland Security Investigations is committed to protecting the integrity of our financial system and enforcing our nation’s laws.”

Flores pleaded guilty to two counts: one of conspiracy to defraud the U.S. and another of conspiracy to operate an unlicensed money transmitting business. 

Three of Flores' accomplices — Francisco Alvarez, Iris Villafranca and Osman Zapata — were previously sentenced: Alvarez to four years of probation, Villafranca to 17 years in prison and Zapata to four years in prison. The three are also required to pay differing amounts of restitution to the U.S.: $2.3 million for Alvarez, $38 million for Villafranca (who also has to forfeit $89 million of criminal proceeds from the scheme) and $2.5 million for Zapata.

Michael Mayorga, a fourth conspirator in the scheme, awaits sentencing.

The IRS Criminal Investigation is investigating the case with help from HSI.

Katherine Pugh is a reporter for Just the News. Follow her on X for more coverage.