Federal prosecutors said the scheme operated from approximately December 2015 through August 2024. During that period, the defendants used Escobar Plastering to help hundreds of construction subcontractors obtain work and pay their crews off the books.

The subcontractors provided the names of contractors from which they wanted to obtain work. Escobar Plastering then sent those contractors certificates of insurance representing that the subcontractors and their crews were employees covered by the plastering company’s workers’ compensation policy.

The company’s insurance applications, however, reportedly identified only a handful of employees and a minimal payroll. Prosecutors said the arrangement caused insurance carriers to unknowingly cover hundreds of additional workers.

Authorities estimated the insurers would have charged approximately $14.9 million in additional premiums had the full payroll and number of covered workers been disclosed.

Contractors issued payroll checks to Escobar Plastering, which deposited the money into its bank accounts. The defendants then withdrew cash to pay the subcontractors’ crews after deducting a fee equal to approximately 7% to 8% of the payroll.

Thousands of checks totaling approximately $148.8 million passed through the company’s accounts. At a 7% rate, the defendants’ fees would have totaled approximately $10.4 million, according to prosecutors. No payroll taxes were withheld or paid to the IRS, resulting in an estimated $37.2 million loss to the U.S. Treasury.

The arrangement also allegedly facilitated the employment of workers who were not legally authorized to work in the United States. Prosecutors said it allowed participating contractors and subcontractors to avoid responsibility for payroll taxes, adequate workers’ compensation coverage and employment-authorization verification.

“Payroll and workers’ comp fraud doesn’t just break the law—it puts honest contractors at a competitive disadvantage,” said Ron Loecker, special agent in charge of IRS Criminal Investigation’s Florida Field Office.

Juana Escobar pleaded guilty in July 2025, while Rene Escobar pleaded guilty in November 2025. Both were convicted of conspiracy to commit tax fraud and conspiracy to commit wire fraud. Juana Escobar is a legal permanent resident from Mexico. Her conviction will likely result in her deportation from the United States. Rene Escobar is a naturalized U.S. citizen from Ecuador.

The investigation was conducted by Homeland Security Investigations and IRS Criminal Investigation, with assistance from the Florida Department of Financial Services. Federal authorities said the case is part of a continuing investigation into shell companies and so-called ghost employees in the construction industry.