The Department of Justice announced Nov. 27 that Travis Morgan Slaughter and Tripp Charles Slaughter pleaded guilty to conspiracy to commit mail and wire fraud and conspiracy to commit tax fraud related to a Jacksonville roofing business that they operated.
The brothers each face a maximum penalty of five years in federal prison for the tax fraud offense and up to 20 years’ imprisonment for the mail and wire fraud offense.
A sentencing date has not yet been set.
According to a DOJ news release, Travis Slaughter agreed to forfeit to the government $2,780,947 in proceeds he obtained from the mail and wire fraud offense and to pay restitution of $6,768,612 for the payroll tax loss as well as $2,780,947 for unpaid workers’ compensation insurance premiums and $271,217 for two paid workers’ compensation claims.
Tripp Slaughter agreed to forfeit $416,800 in proceeds he obtained from the mail and wire fraud offense and to pay restitution of $623,269 for the payroll tax loss along with $416,800 for unpaid workers’ compensation insurance premiums and $137,778 for a paid workers’ compensation claim.
According to their plea agreements, beginning in 2007 the Slaughters operated a roofing business in Jacksonville, first under the name Great White Construction, then under the name Florida Roofing Experts and finally under the name 5 Star Roofing Services.
Although the names changed, each business operated in the same manner, banked at the same financial institutions and employed the same employees.
The company contracted with professional employer organizations to prepare payroll checks for employees, after making deductions for payroll taxes, and to file payroll tax returns and forward tax payments to governmental authorities.
However, the government said the company did not provide the PEOs with information about all the hours worked by, or all the wages due to, its employees.
Instead, the company also paid the employees directly, with separate checks drawn on company bank accounts, and did not deduct payroll taxes from these checks.
By paying employees with “split checks” — one from the PEO and one from the company — the company avoided paying the full amount of payroll taxes due to the IRS.
During the period of January 2017 through July 2020, the PEOs issued payroll checks to the employees totaling approximately $4,930,613, after deducting and paying over to the IRS the payroll taxes due.
During that same period, the company issued checks to the employees totaling approximately $18,545,845, with no payroll taxes being deducted or paid.
The total unpaid payroll taxes on that amount were $2,768,377.
The PEOs also secured workers’ compensation insurance coverage for the company. The premiums charged by the workers’ compensation insurers were based on the total amount of payroll that the company reported to the PEOs.
If the company had reported the actual amount of payroll, the insurers would have charged additional premiums totaling $2,780,947.
In addition to causing the company to underreport their payroll to the IRS, the Slaughters also underreported their personal income to the IRS.
For the tax years 2014 through 2019, the total unpaid taxes due on Travis Slaughter’s unreported income totaled $2,467,183. For the tax years 2015 through 2019, the total unpaid taxes due on Tripp Slaughter’s unreported income totaled $263,614.
The case was investigated by the Internal Revenue Service – Criminal Investigation, Homeland Security Investigations, Housing and Urban Development – Office of Inspector General, and the Florida Department of Financial Services.
It is being prosecuted by Assistant U.S. Attorney Arnold Corsmeier. The asset forfeiture is being handled by Assistant U.S. Attorney Jennifer Harrington.