Check Cashing Owner is the Next to Fall as Oregon Bust Takes Down Criminal Network

In 2023, Melesio Gomez-Rivera, 49, of Aloha, Oregon, was sentenced to 30 months in federal prison and three years of supervised release for his involvement in a multiyear payroll and income tax evasion scheme. Gomez-Rivera, who owned Novatos Construction, conspired with other construction company owners and the operator of Check Cash Pacific, Inc., to pay construction workers under the table from January 2014 to December 2017.

Last month, David A. Katz owner of Check Cash Pacific, was found guilty of conspiracy to defraud the United States and filing false currency transaction reports with the U.S. Department of Treasury’s Financial Crimes Enforcement Network (FinCEN)

By cashing millions of dollars in payroll checks at Katz’s check-cashing business and using the cash to pay workers under-the-table, the conspirators defrauded the IRS of tens of millions in payroll and income taxes. This scheme resulted in an approximate tax loss of $68 million.

Gomez-Rivera, who was ordered to pay $29.9 million in restitution to the IRS, was the first of six co-conspirators to plead guilty. Now, after Katz, the remaining individuals await a jury trial in December 2024. The case was investigated by IRS-Criminal Investigation and is being prosecuted by Assistant U.S. Attorneys Seth D. Uram and Gavin W. Bruce.

Others charged with conspiracy to defraud the U.S. include Martin S. Elizondo, 46, of Tualatin; Jorge Peraza, 49, and Natallie N. Graham, 46, both of Beaverton, Oregon; and Jose L. Altamirano, Sr., 60, of Bend, Oregon.

The Price of Criminality

This case underscores the increased efforts by federal authorities to combat tax evasion and payroll fraud. The substantial prison sentence and hefty restitution imposed on Gomez-Rivera highlight the serious consequences of such schemes.

By targeting both the operators of the construction companies and the check-cashing businesses facilitating the illegal activities, the IRS and the U.S. Attorney's Office are demonstrating their commitment to cracking down on every component of these illegal operations. The Inclusion of the check cashing business in the investigation highlights one of the many unscrupulous ways in which these criminals operate.

Katz personally netted $4 Million for his role by charging a 2% commission fee on transactions. Katz would cash payroll checks so that Novatos could then pay the workers under the table with no taxes withheld or reported.

"Cheating contractors go to extraordinary and elaborate lengths to rip off workers and commit tax fraud. Being in cahoots with a check cashing place like Check Cash Pacific, Novatos Construction was able to take even more of the workers pay even after the checks were issued. The workers many of whom, are illegal have absolutely no say and are easily exploited because the owners know they won't complain." says Oregon Labor Representative, Trampas Simmons.

Cases like this peel the veil away from this type of criminality and show the sometimes elaborate ways in which fraudsters operate. It is crucial for watchdogs to closely monitor the activities of these criminal enterprises at every level to understand the full scope and the array of participants involved.