Fraud and Embezzlement
False Financial Documents: US Indictment Against a Construction Company Owner and Three Employees Over Tax Evasion and Lender Fraud
False financial documents to get loans, mortgages and surety bonds, and wages paid without tax withholding: US indictment of a builder and three employees.
In brief
- The US Department of Justice announced on 26 October 2026 the unsealing of an indictment against the owner of several construction subcontracting companies and three employees: a foreman, a senior director of operations and an accountant and office manager.
- According to the indictment, from April 2017 to May 2024 employees were paid wages without federal employment taxes being withheld. Unreported wages: at least about USD 5 million.
- It is also alleged that the owner underreported business gross receipts by about USD 13 million.
- According to the indictment, from July 2019 to March 2025 false financial documents were submitted to obtain loans, mortgages, lines of credit, credit cards and surety bonding contracts.
- Status: indictment only. The Department of Justice stresses that an indictment is merely an allegation, and the defendants are presumed innocent until proven guilty.
What the indictment alleges
According to the US Department of Justice announcement, the owner held several subcontracting companies: glass installation on commercial buildings, metal fabrication services and electrical installation. The companies were based in Brooklyn until March 2022 and then moved to New Jersey (US Department of Justice).
According to the indictment, from April 2017 to May 2024 employees received wages with no federal employment taxes withheld, and unreported wages totaled at least about USD 5 million. It is also alleged that false wage forms were issued, personal expenses were classified as business expenses, and false employment, corporate and individual tax returns were filed (US Department of Justice).
False documents submitted to lenders
The second part of the indictment concerns lenders and surety providers. According to the announcement, from July 2019 to March 2025 the owner, the accountant and the operations director submitted false financial documents to obtain money or property: loans, mortgages, lines of credit, credit cards and surety bonding contracts for projects. For this, the three were charged with conspiracy to commit wire fraud (US Department of Justice).
The owner was also charged with two counts of willful failure to file reports of foreign bank accounts (FBAR). The accountant was also charged with obstruction of justice related to his grand jury testimony (US Department of Justice).
Possible penalties
According to the announcement, the maximum penalty for wire fraud conspiracy and for obstruction of justice is 20 years in prison. For conspiracy to defraud the United States, failure to pay over employment taxes, tax evasion and failure to file an FBAR, the maximum is 5 years per count. Any sentence would be set by a federal judge under the Sentencing Guidelines. IRS Criminal Investigation (IRS-CI) is investigating the case (US Department of Justice).
Why it matters for due diligence
According to the indictment, the lenders and surety providers received financial documents that looked credible. This is exactly where due diligence before a deal, a loan or a guarantee can prevent harm: cross-checking the statements against actual activity, checking accounts and assets, lawsuits and debts, and the identity of whoever stands behind the companies.
Sources: US Department of Justice, 26.10.2026. The source is in English.
Further reading: Due diligence: what it is and when you need it, Background check before a deal, and our business intelligence and due diligence service.
The information in this section is general and is not legal advice. This is an indictment only. Guilt has not been proven, and the defendants are presumed innocent. The defendants' names are not given here.
