[IN2GLAMISGIRL]

LAWFUEL - Press Release Service - The owner of Oxnard-based Haas Automation, Inc. was arrested this morning on federal tax fraud charges for allegedly orchestrating a scheme in which approximately $50 million of bogus expenses were put on the company’s books in an attempt to avoid the payment of more than $20 million in federal income taxes.

Gene Francis Haas, the owner of Haas Automation and CNC, Inc., was arrested without incident at his Camarillo home by Special Agents with IRS Criminal Investigation. Haas, 54, who is the lead defendant in an 11-count indictment that was returned by a federal grand jury on June 8, is expected to make his initial court appearance this afternoon in United States District Court in Los Angeles.

In addition to Haas, the indictment names Denis Arthur Dupuis, a 51-year-old Newbury Park resident, and Robert Gene Cable, a 73-year-old La Crescenta resident. Dupuis was Haas Automation’s general manager, and Cable was formerly a Haas Automation salesman who operated the Valencia-based Enmark & Associates during the time of the scheme.

The scheme allegedly started in 2000 after Haas paid approximately $8.9 million to settle a patent infringement lawsuit brought against it by a rival firm. According to the indictment, Haas blamed his loss in the case on the federal judge who presided over the lawsuit. In September 2000, Haas allegedly created several tax fraud schemes to recover from the government the $8.9 million plus legal fees that he paid the rival company.

According to the indictment, Haas conspired with Dupuis, Cable and others to create bogus invoices and to pay these fictitious bills with Haas Automation checks. In two conspiracies alleged in the indictment, Hass paid millions of dollars for non-existent industrial equipment from Enmark and Supermill, Inc., a Carson City, Nevada company owned by Charles Todd. Haas Automation deducted these payments as expenses. However, Enmark and Supermill returned 98 percent or 99 percent of the money to CNC, Haas’s other company. According to the indictment, this bogus invoice scheme allowed Haas Automation to deduct more than $23 million in false expenses during 2000 and 2001, when in reality nearly all of that money was returned to Haas through the payments to CNC.

Charles Todd, a resident of Minden, Nevada, who made his first court appearance this morning, has agreed to plead guilty to tax evasion.

The indictment also alleges a second tax fraud scheme in which Haas directed his company to make large overpayments for the purchases of goods. Haas, Dupuis, and another Haas employee caused inflated checks and wire transfers to be issued from Haas Automation. These inflated payment amounts were deducted as costs-of-goods-sold on Haas Automation’s financial records. Haas Automation then requested refunds on the overpayments, and Haas and Dupuis caused those refunds to be deposited into bank accounts other than Haas Automation’s, including Haas’ personal bank account. Furthermore, the indictment alleges that false expenses were recorded on Haas Automation’s 2000 and 2001 financials after payments were made to a NASCAR race team and a title company. In this scheme, the NASCAR team and the title company were directed to return 100 percent of the payments, which were then deposited into bank accounts other than Haas Automation’s. According to the indictment, this scheme resulted in more than $12 million in false expenses.

"These deceptive and elaborate tax evasion schemes were devised to intentionally evade the income tax obligations of Mr. Haas and his company," said IRS Special Agent-in-Charge Kenneth J. Hines. "IRS Criminal Investigation will continue to aggressively pursue corporations and individuals who attempt to conceal their true income from the Internal Revenue Service through sham transactions. The American public can feel confident that our tax system works."

According to the indictment, the tax loss resulting from these various fraud schemes is more than $20 million.
Haas, Dupuis and Cable are charged with conspiracy in the Enmark scheme. Haas and Dupuis are charged with conspiracy in the Supermill and the overpayment schemes.

Haas alone is charged with subscribing to false tax returns for the years 2000 and 2001. Haas is also charged with two counts of witness intimidation for threatening one co-defendant and directing Todd to make false testimony to investigators.

Cable is charged with four counts of wire fraud for making misrepresentations to a company that had sued Enmark.

An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond a reasonable doubt.

The conspiracy counts each carry a maximum penalty of five years in federal prison. Subscribing to a false tax return carries a maximum penalty of three years in prison, wire fraud carries a maximum penalty of 20 years in prison, and witness intimidation carries a maximum penalty of 10 years in prison.

Dupuis and Cable will be summoned to appear in federal court for an arraignment in the coming weeks.
A fifth defendant in the case, Kenneth Green, has agreed to plead guilty to submitting a false document to the IRS. Greene, a Simi Valley resident, was the controller at Haas Automation from mid-2001 through 2003.

CONTACT: Assistant United States Attorney Sandra R. Brown
Chief, Tax Division
(213) 894-5810

[lakeside]

Well you can't blame the man for trying

[Ken_Shea]

Well you can't blame the man for trying


I was thinking more on the lines of Sir Walter Scott;
"Oh what tangled webs we weave when we practice to deceive"

[Geof]

Well you can't blame the man for trying

Wrong; that is the problem in far too many situations these days. People seem to have the idea that if they are not caught whatever they did was okay. If it turns out that all, or a majority, of the allegations are correct it demonstrates that even stupid people can establish successful companies.

[lakeside]

The only thing the man did wrong in my mind is that he got caught.

[Geof]

The only thing the man did wrong in my mind is that he got caught.

Interesting philosophy. If someone broke into your house and stole a bunch of stuff and did not get caught then they did nothing wrong?

[lakeside]

Wrong; that is the problem in far too many situations these days. .

these days(it started 1 day before the IRS was founded), this is what made so many company profit. screw the other guy even if it the irs That what makes them money $3.00 a gallon?

[lakeside]

and if I found him in my home I could shoot to kill and what he did wrong was he got caught. It my no be right but it happens

[diarmaid]

If you kill someone and it makes the world a better place, is it really wrong?

...hehehe...just thought I'd throw that in there...I wont share my own answer!....deep ehh....

[tobyaxis]

You play you pay. More than likely Haas will not do any prison time. Look at OJ Simson. It is these types that make it difficult for everyone.

I hope the IRS teaches him a lesson (chair) :boxing:

tobyaxis

[CJL5585]

Well you can't blame the man for trying

In that case, if someone steals everything you own, don't bother to call the police or even to fill out a police report. Don't even get upset. Just repeat your own statement and everything will instantly return to normal.

Cheating, lying, and stealing are not acceptable moral actions to the majority of the population in this nation.

[CJL5585]

If you kill someone and it makes the world a better place, is it really wrong?

If someone had killed Hitler, or Stalin, or Bin Laden it would be wrong, but the people of the world would not have had to suffer from their crimes against humanity.

[Bowman]

As far as I am concerned the IRS and Government in general rip us off all year long. If I can do a job for cash off the books do I feel obligated to give Uncle Sugar what he considers his cut, hell no never have and never will.

Maybe if government wasn't so corrupt and fraudlent in and of itself I may feel different but that is far from the case.

Personally I feel all workers should change their deductions to 10 dependents to have as little money taken from out their payroll checks over the year as possible and then on April 15th we collectively give Uncle Sugar the finger.. What would they do put the only people that work in jail, than how much money would they have to blow next year, NADA!! Where would they jail us all and who would pay for the jails. The only way we will ever take back our money is to simply take it back. What bigger show of non-confidence can we show them, voting does not change a thing. We have to take it back ourselves.

They taxed this years bonus at 38.125% then when I go to spend it they will take another 10%+ so they get 1/2 my bonus.. Who is it thats getting robbed again exactly?

[motomitch1]

at least you got a bonus

[unterhaus]

I assume this started with the bogus Hurco patent case. I was really happy when Haas took the case to court, and really pissed when he lost.

Doesn't excuse cheating on his taxes. If someone else cheats, you and I either pay more, or our share of the national debt goes up. There is no free lunch. If you ignore Social Security and Medicare, most of our taxes nowadays go to interest payment on the national debt and the military. What's left over is miniscule in comparision. People need to look at the budget, there isn't much fat in there outside of the Defense Department, and that seems to be a sacred cow right now.

[Geof]

I assume this started with the bogus Hurco patent case. I was really happy when Haas took the case to court, and really pissed when he lost.....

Have you read;

http://www.ll.georgetown.edu/federal...s/99-1019.html

Bogus is a strong word but not necessarily a wrong word. I waded through these opinions and it seems Hurco/IMS had some clever lawyers in conflating together stuff that really was new and depended on microprocessors with stuff that was really prior art. Haas was also in a weak position because a large part of their argument rested on the claim that a floppy drive and tape drive are different; they are physically but not in principle.

[StealthDumpKits]

This guy ain't no Robin Hood, he's just a regular hood in a business suit. If his company was making so much profit he could launder it and "save" $20M in taxes, then the people who bought his machines got ripped off also. Let's talk to his employees who probably could've used a little extra in their paycheck. This guy is a criminal, and we should be celebrating his un-doing rather than blaming the government for the taxes we pay and they waste.

[sbrpollock]

Someone said something about the vote not making a difference.

Maybe.....

Let me ask this.....

How do you spend your money?

[Geof]

...This guy is a criminal....

Technically not yet, remember innocence must be presumed until guilt is proven.

Now if you want to assert he is stupid that I will agree with. I don't approve of tax fraud and things like that but please if you are going to do it be a bit more sophisticated and don't leave a paper trail. Still I suppose stupid crooks are preferable to smart ones at least they are easier to catch.

[tobyaxis]

Without paying taxes, what country would you be living in? How about a 3rd world country where there is no FREEDOM (nuts) . None of us would even be able work for ourselves.

Uncle Sam does take a lot, but at least we are able to live freely, with lots of oppertunity, and choices.

Let Gene Haas Fry in the pan he jumped in. I pay taxes, what makes him so Flipping special. He is a Crook in a Nice Suite. (chair)

I just feel sorry for the employees....... and people who bought HAAS Machinery. :frown:

tobyaxis