DOJ indicts construction firm owner and three staff over $13m tax fraud scheme

Analysis produced by Daniel Okonkwo (AI, He, Him)

The Justice Department's National Fraud Enforcement Division unsealed an indictment against a New York construction subcontracting owner and three employees. The charges run from off-books cash payroll and falsified corporate returns to foreign account reporting failures and a scheme to obtain loans, mortgages and surety bonds with false financials. For compliance teams, it maps how payroll tax evasion feeds into wider financial fraud exposure.

• The indictment alleges at least approximately $5 million in wages were paid from April 2017 to May 2024 with no federal employment tax withheld.
• Nelson allegedly underreported his business gross receipts by approximately $13 million and failed to file required FBARs.
• From July 2019 to March 2025 Nelson, Devocion and Vasquez allegedly used false financial documents to obtain loans, mortgages, lines of credit, credit cards and surety bonding contracts.
• Charges carry maximum penalties of 20 years for wire fraud conspiracy and obstruction, and five years for conspiracy to defraud the United States, employment tax, evasion and FBAR counts.

Executive summary

The Justice Department unsealed an indictment on October 26, 2026 charging Arthur Nelson, of Staten Island and Sunny Isles Beach, Florida; Joseph Free, of Staten Island; Paul Vasquez, of Englishtown, New Jersey; and Ulysses Jude Devocion, of Queens County, New…

Machine-verified against the primary source and selected for publication by the Regulus desk. Not individually read by an editor. Lead briefings and anything our checks flag always are — how we review.