![[US] Brothers plead guilty to $2.8 million payroll tax fraud scheme](http://gpa.net/cdn/shop/articles/bigstock-Indianapolis--Circa-August---255069790_1200x.jpg?v=1734137824)
Two brothers from Jacksonville, Florida, have pleaded guilty to conspiracy to commit mail and wire fraud and conspiracy to commit tax fraud related to a Jacksonville roofing business that they operated following a joint investigation with Homeland Security Investigations (HSI) Jacksonville, Homeland Security Investigations reports.
Travis Morgan Slaughter and Tripp Charles Slaughter each face a maximum penalty of five years in federal prison for the tax fraud offence and up to 20 years’ imprisonment for the mail and wire fraud offence. A sentencing date has yet to be set.
Travis Slaughter reportedly agreed to forfeit $2,780,947 in proceeds he obtained from the mail and wire fraud offence and to pay restitution of $6,768,612 for the payroll tax loss, $2,780,947 for unpaid workers’ compensation insurance premiums, and $271,217 for two paid workers’ compensation claims.
According to HSI, Tripp Slaughter has agreed to forfeit to the United States $416,800 in proceeds he obtained from the mail and wire fraud offence and to pay restitution of $623,269 for the payroll tax loss, $416,800 for unpaid workers’ compensation insurance premiums, and $137,778 for a paid workers’ compensation claim.
Their plea agreements stated that the Slaughters have operated a roofing business in Jacksonville since 2007 , first under the name “Great White Construction,” then under the name “Florida Roofing Experts,” and finally under the name “5 Star Roofing Services.” Despite the name change, each business operated in the same manner, banked at the same financial institutions, and employed the same employees.
The company contracted with professional employer organisations to prepare payroll cheques for employees, after making deductions for payroll taxes, and to file payroll tax returns and forward tax payments to governmental authorities. However, it did not provide the professional employer organisations with information about all the hours worked by, or all the wages due to, its employees.
Instead, the investigation found that the company also paid the employees directly, with separate cheques drawn on company bank accounts, and did not deduct payroll taxes from these cheques. By paying employees with ‘split cheques’ - one from the professional employer organisations and one from the company - the company avoided paying the full amount of payroll taxes due to the IRS.
During the period of January 2017 until July 2020, the professional employer organisations reportedly issued payroll cheques to the employees totalling approximately $4,930,613, after deducting and paying over to the IRS the payroll taxes due. During that same period, the company issued cheques to the employees totalling approximately $18,545,845, with no payroll taxes being deducted or paid. The total unpaid payroll taxes on that amount were $2,768,377.
HSI found that the professional employer organisations also secured workers’ compensation insurance coverage for the company. The premiums charged by the workers’ compensation insurers were based on the total amount of payroll that the company reported to the professional employer organisations. If the company had reported the actual amount of payroll, the insurers would have charged additional premiums totaling $2,780,947.
In addition to causing the company to underreport their payroll to the IRS, the Slaughter brothers also underreported their personal income to the IRS. For the tax years 2014 to 2019, the total unpaid taxes due on Travis Slaughter’s unreported income totalled $2,467,183. For the tax years 2015 through 2019, the total unpaid taxes due on Tripp Slaughter’s unreported income totalled $263,614.
Source: Homeland Security Investigations
Two brothers from Jacksonville, Florida, have pleaded guilty to conspiracy to commit mail and wire fraud and conspiracy to commit tax fraud related to a Jacksonville roofing business that they operated following a joint investigation with Homeland Security Investigations (HSI) Jacksonville, Homeland Security Investigations reports.
Travis Morgan Slaughter and Tripp Charles Slaughter each face a maximum penalty of five years in federal prison for the tax fraud offence and up to 20 years’ imprisonment for the mail and wire fraud offence. A sentencing date has yet to be set.
Travis Slaughter reportedly agreed to forfeit $2,780,947 in proceeds he obtained from the mail and wire fraud offence and to pay restitution of $6,768,612 for the payroll tax loss, $2,780,947 for unpaid workers’ compensation insurance premiums, and $271,217 for two paid workers’ compensation claims.
According to HSI, Tripp Slaughter has agreed to forfeit to the United States $416,800 in proceeds he obtained from the mail and wire fraud offence and to pay restitution of $623,269 for the payroll tax loss, $416,800 for unpaid workers’ compensation insurance premiums, and $137,778 for a paid workers’ compensation claim.
Their plea agreements stated that the Slaughters have operated a roofing business in Jacksonville since 2007 , first under the name “Great White Construction,” then under the name “Florida Roofing Experts,” and finally under the name “5 Star Roofing Services.” Despite the name change, each business operated in the same manner, banked at the same financial institutions, and employed the same employees.
The company contracted with professional employer organisations to prepare payroll cheques for employees, after making deductions for payroll taxes, and to file payroll tax returns and forward tax payments to governmental authorities. However, it did not provide the professional employer organisations with information about all the hours worked by, or all the wages due to, its employees.
Instead, the investigation found that the company also paid the employees directly, with separate cheques drawn on company bank accounts, and did not deduct payroll taxes from these cheques. By paying employees with ‘split cheques’ - one from the professional employer organisations and one from the company - the company avoided paying the full amount of payroll taxes due to the IRS.
During the period of January 2017 until July 2020, the professional employer organisations reportedly issued payroll cheques to the employees totalling approximately $4,930,613, after deducting and paying over to the IRS the payroll taxes due. During that same period, the company issued cheques to the employees totalling approximately $18,545,845, with no payroll taxes being deducted or paid. The total unpaid payroll taxes on that amount were $2,768,377.
HSI found that the professional employer organisations also secured workers’ compensation insurance coverage for the company. The premiums charged by the workers’ compensation insurers were based on the total amount of payroll that the company reported to the professional employer organisations. If the company had reported the actual amount of payroll, the insurers would have charged additional premiums totaling $2,780,947.
In addition to causing the company to underreport their payroll to the IRS, the Slaughter brothers also underreported their personal income to the IRS. For the tax years 2014 to 2019, the total unpaid taxes due on Travis Slaughter’s unreported income totalled $2,467,183. For the tax years 2015 through 2019, the total unpaid taxes due on Tripp Slaughter’s unreported income totalled $263,614.
Source: Homeland Security Investigations