The Financial Crimes Enforcement Network and IRS Criminal Investigation today issued a notice to financial institutions to call attention to a “concerning increase” in state and federal payroll tax evasion and workers’ compensation insurance fraud in the residential and commercial real estate construction industries.
According to the notice, many payroll tax evasion and workers’ compensation fraud schemes involve networks of individuals and the use of shell companies and fraudulent documents. Financial institutions should keep an eye on red flags such as newer, highly specialized construction firms with minimal internet presence; people with no prior experience in the construction industry opening accounts using a non-U.S. passport as identification; and a company bank account with minimal to no tax- or payroll-related payments to the IRS and state and local tax authorities.
