Jacksonville roofer brothers charged with $2.8M payroll tax fraud using illegal workers

Travis Slaughter had jail time hanging over him for more than a year unless he paid $2.2 million in fines to the federal government. Then his luck went downhill.

Days before the Jacksonville building contractor’s scheduled hearing last week before a federal judge, a grand jury indicted Slaughter and his brother, Tripp, on new fraud and tax charges that could lead to prison and another $3 million in debt whether the fines are paid or not.

The brothers, who were previously in business together as roofing contractors, were recently charged with dodging about $2.8 million in payroll taxes while hiring undocumented immigrants through a scam like one that netted prison time for a father-son pair of builders in January.

“[T]he defendants avoided the payment of millions of dollars in additional payroll taxes to the IRS … [and] millions of dollars in premiums to workers’ compensation insurers,” prosecutors argued.

The flipside of the savings, the Feb. 22 indictment said, was that the brothers “failed to provide adequate workers’ compensation insurance coverage … and facilitated the employment of workers who were not legally authorized to work in the United States.”

Travis Slaughter, 51, faces a much longer list of charges — 18 counts, compared to six for Tripp Slaughter, 48, whose charges include four counts of filing false tax returns.

But the claims of mail and wire fraud conspiracy, conspiring to defraud the government and tax crimes carry the potential for maximum sentences totaling dozens of years for both men.

The indictment comes on top of a years-long court fight Travis Slaughter has had with the U.S. Occupational Safety and Health Administration, which in 2020 convinced an appeals court to hold him in contempt for not paying $2.2 million in fines from a series of inspections.

A judge in Jacksonville whom the appeals court assigned to examine the case reported in 2021 that Slaughter “knowingly and intentionally avoided complying” with court orders to pay and recommended the appeals judges approve putting him in jail to make him deal with the civil case.

Slaughter was already scheduled for a hearing about the fines Wednesday with U.S. District Senior Judge Harvey Schlesinger when the indictment was unsealed and the criminal case was assigned to Schlesinger too.

The brothers turned themselves in for arraignment Feb. 24, pleaded not guilty and were released without posting bond.  Messages to the men’s attorneys weren’t returned.

The indictment says the brothers controlled three companies — Great White Construction, Florida Roofing Experts and 5 Star Roofing Services — and fed false information to businesses the companies contracted as “professional employer organizations,” or PEOs, that managed payments of withholding taxes to the government and some premiums for workers’ comp insurance.

The indictment claimed roofers only handled part of their payrolls through PEOs, making payrolls look aboveboard, while crew leaders paid workers the rest in cash to save on withholding taxes.

“Many of these workers were citizens of other countries who were living and working in the United States illegally,” the indictment said.

Between 2017 and the middle of 2020, the companies’ employees were paid $4.9 million through PEOs and $18.5 million in cash, the indictment said.

In addition to seeking time behind bars for the brothers, prosecutors want to make them forfeit $3 million, which the indictment described as proceeds obtained from fraud conspiracy.

The “split payments” between PEOs and crew leaders the indictment described generally mirrored a system that two other local contractors, Raul Solis and Raul Solis-Martinez, acknowledged following when they pleaded guilty to conspiring to defraud the Internal Revenue Service and were sentenced in January to 33 months behind bars and 21 months, respectively.

While the Slaughters' criminal case is sorted out, OSHA's push for its fines has been stalled too. On Wednesday, Schlesinger rescheduled the hearing on Slaughter's OSHA debt until May 3 after an attorney for the U.S. Labor Department reported laywers needed time to sort out the indictments' effects on collection efforts.

This article originally appeared on Florida Times-Union: Feds charge Jacksonville brothers, roofers, with $2.8M payroll tax scam