Date: April 14, 2020
PORTLAND, Ore.— A Beaverton, Oregon man has been charged for his role in one of the largest tax evasion schemes ever prosecuted in the District of Oregon. In this multiyear scheme, contracting companies, subcontracting companies, and their employees evaded more than $65 million in employment and income taxes owed to the IRS.
Victor Hugo Lopez-Diaz, was charged by criminal information with one count of conspiring to commit tax evasion and two counts of filing false tax returns.
"Employers that willfully concoct elaborate schemes to evade paying employment taxes will be held accountable by the Internal Revenue Service," said IRS-Criminal Investigation Special Agent in Charge Justin Campbell. "This type of fraud does not go unnoticed by our investigators. Fraud of this variety not only impacts honest taxpayers, but significantly impacts honest competitors who follow the rules. Businesses that seek an unfair competitive advantage by cheating the Treasury of payroll taxes will always be a high priority for IRS-Criminal Investigation."
"Evading the payment of Medicare, Social Security, and income taxes harms every citizen," said Billy J. Williams, U.S. Attorney for the District of Oregon. "All business owners and their employees must file accurate tax returns with the IRS and pay all taxes required by law. Those who fail to do so will face significant consequences, including criminal prosecution, prison, and monetary penalties."
According to court documents, from at least 2014 through February 2018, Lopez-Diaz and his conspirators are alleged to have successfully evaded their personal and employment tax obligations by cashing approximately $185 million in payroll checks at a co-conspirator's check cashing business; using the cash to pay construction workers under the table; and filing false corporation, payroll, and individual tax returns.
Lopez-Diaz and some of his co-conspirators established subcontracting companies to facilitate their tax evasion conspiracy. Along with the owners and operators of local contracting companies, they knowingly hired unlicensed work crews, paid them cash under the table, and evaded payroll taxes by not putting the workers on their regular payroll systems.
Throughout the conspiracy, Lopez-Diaz also functioned as a payroll check casher for other companies. He used an alias, Miguel Lopez, to cash payroll checks and conceal his identity and gave the cash received to the leaders of off-the-books work crews and to contractors who used the cash to pay other employees surreptitiously.
Lopez-Diaz's first appearance in federal court is scheduled for April 21, 2020.
If convicted, Lopez-Diaz faces a maximum sentence of 11 years in federal prison, three years' supervised release, and $750,000 in fines.
A criminal information is only an accusation of a crime, and a defendant is presumed innocent unless and until proven guilty.
This case is being investigated by IRS-Criminal Investigation and prosecuted by Seth D. Uram and Gavin W. Bruce, Assistant U.S. Attorneys for the District of Oregon.