Former store owner sentenced for fraud
Tuesday, July 15, 2014 10:00 PM
INDIANAPOLIS - The former owner of a Mexican grocery store in Crawforfdsville has been sentenced.
Joseph H. Hogsett, the United States Attorney, announced Monday that Pedro Sanchez, 34, Crawfordsville, was sentenced with theft of government funds related to fraudulent receipt of unemployment benefits and the filing of fraudulent tax returns. Sanchez was sentenced to 26 months with a fine of $773,000 to the Internal Revenue Service (IRS) and $29,000 to the Indiana Department of Workforce Development (IDWD) for restitution. Sanchez was sentenced by District Court Judge Tanya Walton Pratt.
"Theft is always wrong, but theft of unemployment benefits takes money from some of the neediest Hoosier families. It affects all taxpayers and makes the cost of helping those in need higher than necessary," said Hogsett.
The investigation revealed that Sanchez's scheme was uncovered by a third party trying to apply for public aid. In May of 2010, an individual went to the Lafayette Indiana Department of Workforce Development office ("IDWD") to obtain a printout of her past wages to assist in an application for public aid. While assisting her, IDWD determined that she was already receiving unemployment benefit, however, they were not being sent to her address. Instead, a benefits debit card was being sent to an address in Crawfordsville. While looking further into this matter, IDWD determined that multiple debit cards were being sent to the same address, which led investigators to Sanchez.
Further investigation found that Sanchez was defrauding multiple people of their unemployment benefits. Sanchez, through his Mexican grocery store, Video Y Discoteca El Charron ("El Charro"), which contained a money service, cashed numerous IRS refund checks that were issued based on fraudulent tax returns. On some occasions, Sanchez cashed the refund check himself. On other occasions, the tax refund checks were cashed by other people but went through the Mexican grocery store business account of Sanchez. Approximately $1,472,673 was received by Sanchez in fraudulent tax returns between January 2009 and February 2011.
"That someone would use a legitimate business as a cover for stealing funds from unassuming individuals as well as the general public is deplorable," said Hogsett.
The tax refund scheme included obtaining refunds for individuals using tax identification numbers listing wages that could not be verified by employers. This was done by listing identical employers, similar and identical taxpayer home addresses, similar and identical wage while withholding information and claiming dependents which resulted in additional child tax credit.
This investigation was a collaborative effort between the United States Department of Labor- Office of the Inspector General, Internal Revenue Service and Indiana Department of Workforce Development.
"Combating unemployment insurance fraud remains a high priority for the Office of Inspector General and we will continue to work with our law enforcement partners and colleagues to address it. We would like to thank the Indiana Department of Workforce Development for their support in identifying the extent of the unemployment insurance fraud committed by the defendant," said James Vanderberg, Special Agent-in-Charge of the U.S. Department of Labor's Office of Inspector General, Office of Labor Racketeering and Fraud Investigation
James C. Lee, IRS Criminal Investigation Special Agent in Charge stated, "At the IRS, protecting taxpayer money is our top priority. There are numerous victims when it comes to refund crimes; in addition to the government, the taxpaying public also pays the price. IRS Criminal Investigation is determined to stop these false tax refund schemes and warns that participation in refund fraud schemes does not pay and those who participate will be investigated and prosecuted for their involvement."
According to Assistant United States Attorney Gayle Helart, who prosecuted this case on behalf of the government, Sanchez faces three years of supervised release after serving his sentence.