Owner/Manager of Key West Labor Staffing Companies Convicted of Immigration Fraud, Money Laundering and Tax Crimes
A federal jury today convicted a man who operated labor-staffing companies in Florida with conspiracy to harbor non-resident aliens and induce them to remain in the country, conspiracy to commit money laundering, and conspiracy to defraud the IRS.
Mykhaylo Chugay and others owned and operated a series of labor-staffing companies in southern Florida, including General Labor Solutions LLC, Liberty Specialty Service LLC, Paradise Choice LLC, Paradise Choice Cleaning LLC, Tropical City Services LLC and Tropical City Group LLC, between August 2007 and July 2021. At trial, the government proved that Chugay, through these staffing companies, facilitated the employment of individuals in hotels, bars and restaurants in Key West and other locations, even though the employees were not authorized to work in the United States.
The government also proved that Chugay and his co-conspirators defrauded the IRS out of more than $10 million in Social Security and Medicare taxes that should have been collected and paid over in connection with the employment of these workers. In addition, the government proved Chugay conspired to encourage workers to enter the United States and remain in the country, in violation of immigration laws. The government also proved that Chugay and others sent checks and wires totaling more than $11 million in proceeds from the illegal scheme to conspirators in Ukraine and elsewhere.
Chugay was convicted at trial on all counts. He is scheduled to be sentenced on Aug. 22 and faces maximum penalties of five years in prison on the tax conspiracy, 10 years in prison for conspiring to harbor aliens and induce them to remain in the United States and 20 years in prison on the money laundering conspiracy. He also faces a period of supervised release, restitution and monetary penalties. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Acting Deputy Assistant Attorney General Stuart M. Goldberg of the Justice Department’s Tax Division and U.S. Attorney Juan Antonio Gonzalez for the Southern District of Florida made the announcement.
The U.S. Department of Homeland Security's Homeland Security Investigations and IRS-Criminal Investigation are investigating the case. U.S. Citizenship and Immigration Services and U.S. Customs and Border Protection, Air and Marine Operations provided substantial assistance at trial.
Senior Litigation Counsel Sean Beaty, Trial Attorneys Jessica A. Kraft and Nicholas J. Schilling Jr., and Paralegal Robert Resto of the Tax Division, and Assistant U.S. Attorney Chris Clark of the Southern District of Florida, are prosecuting the case.