Two Chardon Residents Charged with Tax, Social Security Fraud, and Identity Theft Offenses

A 41-count criminal information was filed charging David T. Tufts, age 45, and Nelida I. Velasco, age 37, both of Chardon, Ohio, with conspiracy to file false tax returns, filing false tax returns, misuse of Social Security account numbers, and aggravated identity theft, said Steven M. Dettelbach, United States Attorney for the Northern District of Ohio.

The information charges that from in or about March 2009 to in or about September 2010, Tufts and Velasco, along with other co-conspirators, conspired to file, and did file, at least 35 false 2008 and 2009 federal income tax returns in the names of 35 separate individuals, resulting in a total of at least $155,000 in false claims being filed with the IRS.

“The IRS is aggressively pursuing those who steal others’ identities in order to file false returns,” said Steven Miller, IRS Deputy Commissioner for Services and Enforcement. “Our cooperative work with the U.S. Attorney’s Office will help taxpayers in Northern Ohio from being victimized by identity theft. The IRS is taking additional steps this tax season to prevent, detect, and resolve identity theft as soon as possible.”

“IRS Criminal Investigation has made investigating refund fraud and identity theft a top priority,” stated Darryl Williams, Special Agent in Charge, IRS, Criminal Investigation, Cincinnati Field Office. “Filing fraudulent tax returns in the names of other individuals may result in significant harm to those individuals whose identities were stolen, as well as a monetary loss against the U.S. Treasury.”

The information charges that Tufts and Velasco provided the names, Social Security Account Numbers, and other personal identifiers to a co-conspirator, who then used that information to create false Form W-2s and fraudulent tax returns, which were then filed electronically with the IRS.

The information also chages Tufts with an additional count for filing a fraudulent tax return using his own name, but containing information which he knew to be false and fraudulent. The Information charges that as a result of this fraudulent tax return, Tufts claimed an additional $26,082 in fraudulent refunds from the IRS.

The information further charges that many of the names, Social Security account numbers, and personal identifiers that Tufts, Velasco, and their co-conspirators used to create these fraudulent tax returns were stolen by Velasco from her then employer, a medical billing company.

According to the information, Velasco stole the identifiable health information of at least 35 individuals from her work place, and then provided this information to Tufts and her other co-conspirators, who then used these personal identifiers of real people to prepare and file the fraudulent tax returns.

If convicted, the defendants’ sentences will be determined by the court after review of factors unique to this case, including the defendants’ prior criminal records, if any, the defendants’ roles in the offenses and the characteristics of the violation. In all cases, the sentence will not exceed the statutory maximum and in most cases it will be less than the maximum.

The case is being prosecuted by Assistant U.S. Attorney Chelsea S. Rice, following investigation by the Federal Bureau of Investigation, the U.S. Postal Inspection Service, the Internal Revenue Service Criminal Investigation, and the United States Department of Health and Human Services, Office of the Inspector General.

An information is only a charge and is not evidence of guilt. A defendant is entitled to a fair trial in which it will be the government’s burden to prove guilt beyond a reasonable doubt.