PROVIDENCE, R.I. (AP) — A Rhode Island drywall contractor has pleaded guilty to cheating the Internal Revenue Service out of more than $2.8 million by paying workers in cash and not withholding appropriate taxes, federal prosecutors said.

Jesus Jose Mendez, 44, of Woonsocket, co-owner J&J Drywall, Inc., as well as his business partner, used check-cashing businesses to cash more than 600 business receipt checks totaling more than $16 million dollars, prosecutors said in a statement.

They then traveled to construction sites carrying backpacks full of cash, which they left to be used to pay their employees, prosecutors allege.

In addition, the two failed to make required unemployment insurance contributions, authorities said.

With the exception of a small number of employees placed on an official payroll and paid by check, income and employment taxes were not withheld or paid to the IRS, and unemployment contributions were not made, prosecutors said.

Mendez, who pleaded guilty Thursday to wire fraud and conspiracy to defraud the United States, faces sentencing on July 14. His business partner remains a fugitive.