A business owner in Newberry, Florida has been sentenced to one year and one day in prison for his part in a tax fraud scheme which also involved avoiding paying workers’ compensation insurance as well as harboring immigrants who were in the country without permission.
Mac Johnson, age 51, is owner of three companies—Mac Johnson Roofing Inc., Mac Johnson and Sons Dumpster and Crane, and Johnson and Sons Tree Service. The Florida Department of Financial Services—Workers’ Compensation Compliance Division made several visits to the work sites of Johnson’s companies. Investigators learned that, apart from the foreman, Johnson’s employees neither spoke English nor did they have any personal identification on them.
Investigators compared the names of the employees with the names Johnson had included on his workers’ compensation insurance policy. The names did not match. As a result, Johnson was issued with a “stop work” order. The following day, Johnson provided agents with an insurance policy which had the correct names of the employees on them. This policy, however, was for a landscaper and did not provide coverage for the roofers in Johnson’s employ.
After partnering with Homeland Security Investigations, investigators reviewed Johnson’s bank and payroll records. The investigation showed that Johnson had reported about a dozen of his employees correctly—paying the appropriate payroll tax and other withholdings. Johnson, however, employed an additional 30 to 40 people who he did not report to either the State of Florida or the IRS. These individuals, he paid under the table.
Between 2012 and 2016, Johnson made unreported payments to these employees amounting to $6.9 million. In doing this, he avoided paying $1.7 million in taxes and over $1 million in workers’ compensation insurance premiums. Johnson attempted to avoid detection by paying his employees in cash or by using checks amounting to less than $10,000 to avoid legal reporting requirements.
The investigation also showed that Johnson kept falsified I-9s in his companies’ files. Although allegedly signed by the employees, the I-9s had all been filled out in the same handwriting. Writing samples from the employees did not match the handwriting on the I-9s. The employees confirmed that they had never filled out the I-9s. They also all acknowledged that they were in the United States without permission.
Johnson housed these employees in buildings he owned and provided transportation to and from the work sites. Johnson deducted money for rent and transportation from the employee’s pay.
On February 27, Johnson pled guilty to the charges against him. He faced up to 45 years in prison. For the charge of Wire fraud, he faced up to 20 years in federal prison. For the charge ow Willful Failure to Pay Over Tax, he faced five years. For the charges of Unlawfully Transporting Aliens and for Structuring Financial Transactions, he faced up to ten years each.
On March 26, Johnson was sentenced to one year and one day in prison.
“I commend the vigilance of our federal and state investigative partners and prosecutors in this case for upholding the laws governing American taxes and employment,” said Lawrence Keefe, United States Attorney for the Northern District of Florida. “Honest individuals and businesses are harmed by these lawbreakers.”
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