Two Hialeah construction execs convicted of low-income housing tax fraud
Aaron Construction Group President Javier Estepa and Vice President Diego Alejandro Estepa Vasquez were found guilty on several charges
The president and vice president of a Hialeah construction company were convicted Wednesday of defrauding a federal low-income housing program.
Aaron Construction Group President Javier Estepa, of Davie, and Vice President Diego Alejandro Estepa Vasquez of Boca Raton, were each found guilty of one count of conspiracy to commit wire fraud and three counts of wire fraud, as well as charges of making false statements to a federal agency, by a jury, according to a press release from the Justice Department.
The convictions come amid heightened scrutiny into the abuse and fraud of the low-income housing tax credit programs in South Florida and throughout the country.
The Justice Department said that Estepa and Estepa Vasquez engaged in a scheme in which they falsified information to Miami-Dade Public Housing and Community Development (PHCD) to gain contracts for repair and construction work on low-income housing projects in Miami-Dade County.
In their bids to the agency, the two executives said there would be no subcontractors working on the projects and that each worker would be paid for each hour worked, including for overtime.
Instead, Aaron Construction did exactly the opposite of what they proposed in their bids, according to the federal agency. The group hired subcontractors and hid them on their payroll. The executives then submitted false payroll records to the Miami-Dade agency, and also failed to pay their workers overtime or the appropriate wages.
Due to these false statements, Miami-Dade Public Housing and Community Development transferred over $3.9 million to bank accounts controlled by Estepa and Estepa Vasquez.
Estepa and Estepa Vasquez’s attorney Neil Taylor did not immediately return a request for comment.
The defendants face a maximum penalty of 20 years in prison as to each count of wire fraud and a maximum penalty of five years in prison for each count of making a false statement. Sentencing is scheduled for May 10 before U.S. District Court Judge Ursula Ungaro.
In August, Bloomberg reported Wells Fargo was being investigated by the Department of Justice for allegedly colluding with affordable housing developers nationwide to drive down the prices of low-income tax credits — potentially defrauding hundreds of millions of dollars from the federal program.
In 2016, former Carlisle Development Group executives were convicted of stealing $34 million in subsidies by inflating construction costs for more than a dozen affordable housing developments in Miami-Dade County. In another case, Pinnacle Housing Group principals settled with federal prosecutors for $5.2 million after the government accused them of inflating costs for low-income housing projects.