Hogsett Announces Crawfordsville Man Charged With Theft Of Government Funds

INDIANAPOLIS - Joseph H. Hogsett, the United States Attorney, announced today that Pedro Sanchez, 34, Crawfordsville, has been charged by Information with theft of government funds related to fraudulent receipt of unemployment benefits and the filing of fraudulent tax returns.

“Theft of unemployment benefits takes money from some of the neediest Hoosier families. In addition, schemes such as those alleged against Mr. Sanchez increase the cost of government to honest, hard-working Hoosier taxpayers,” said Hogsett.

Pedro Sanchez owned Video Y Discoteca El Charron (“ElCharro”) a business in Crawfordsville that operated as a Mexican grocery store and diner with a money services business enabling customers to wire money and cash checks.

The Information alleges that Sanchez, through his Mexican grocery store business, which also contained a money service business, cashed numerous IRS refund checks that were issued based on fraudulent tax returns. On some occasions, Sanchez cashed the refund check himself. On one occasion, it is alleged that a tax return dated July 12, 2010 was prepared in the name of A. Chavez and submitted to the IRS for a refund. A. Chavez did not work for the employer listed on the W-2 and the refund check in the amount of $4,556 was endorsed by Sanchez. 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 is alleged to have been received by Sanchez and others in fraudulent tax returns between approximately January 2009 and February 2011.

The tax refund scheme suspected in this investigation includes obtaining refunds for individuals using tax identification numbers listing wages that cannot be verified by employers. This scheme includes listing identical employers, similar and identical taxpayer home addresses, similar and identical wage and withholding information and claiming dependents which resulted in additional child tax credit. Many of the returns listed the filing status of “Head of Household” which is the most advantageous filing status of an unmarried person.

The Information also alleges that, beginning in March of 2010, Sanchez stole $29,000 of federal unemployment benefits. 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 her in applying for public aid. In the process of assisting her, the IDWD determined that she was receiving unemployment benefits. The individual had previously received the benefits, but at that time was not receiving them. IDWD determined that a benefits debit card was being sent to an address in Crawfordsville associated with a family member of Sanchez. While looking further into this matter, IDWD determined that multiple debit cards were being sent to the same address.

The Information further alleges that Sanchez used these debit cards and others to conduct ATM transactions without permission or authority of IDWD or the individuals in whose names the debit cards had been issued. Sanchez used the funds for his own personal use.

A person is eligible for unemployment insurance benefits if they are unemployed through no fault of their own. Upon becoming involuntarily unemployed, a worker could make a claim for benefits either by appearing in person at the IDWD office, or by submitting an application via the internet to the IDWD. This electronic application includes the person’s name, social security number, the last employer’s name, address, dates worked and reason for becoming unemployed. Once the application is approved, an account is set up and the worker would receive a debit card containing a dollar amount equal to the amount of unemployment insurance benefits due. In order to receive continuing benefits, each week thereafter, the worker is required to either appear in person or submit, via the internet to the IDWD, claim vouchers requesting additional payment of benefits. The claim voucher requires a worker to certify whether he or she had worked and received any earnings during the weekly period.

An Information or Indictment is only a charge and is not evidence of guilt. A defendant is presumed innocent and is entitled to a fair trial at which the government must prove guilt beyond a reasonable doubt.