gene francis haas, ) denis arthur dupuis, and ) robert...
TRANSCRIPT
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UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
October 2005 Grand Jury
UNITED STATES OF AMERICA, ))
Plaintiff, ))
v. ))
GENE FRANCIS HAAS, )DENIS ARTHUR DUPUIS, and )ROBERT GENE CABLE, )
)Defendants. )
______________________________)
CR No. 06-
I N D I C T M E N T
[18 U.S.C. § 371: Conspiracy;26 U.S.C. § 7206(1):Subscribing to a False TaxReturn; 18 U.S.C. § 1343: WireFraud; 18 U.S.C. § 1512(b)(3):Intimidation of a Witness withIntent to PreventCommunication Relating to aPossible Federal Offense; 18U.S.C. § 2: Aiding andAbetting and Causing an Act toBe Done]
[UNDER SEAL]
The Grand Jury charges:
INTRODUCTORY ALLEGATIONS
The Defendants
1. During the years 2000 and 2001, defendant GENE FRANCIS
HAAS (“HAAS”), a resident of Camarillo, California, solely owned
and operated the following entities: HAAS Automation, Inc.,
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(“Automation”), an S-Corporation, and CNC, Inc., (“CNC”), a C-
Corporation. Automation is a leading manufacturer of large
Computer Numeric Controlled machine tools. CNC is in the
business of financing and leasing Automation machine tools.
Automation and CNC are both located in Oxnard, California.
2. During the years 2000 and 2001, defendant DENIS ARTHUR
DUPUIS (“DUPUIS”), a resident of Newbury Park, California, was
employed as Automation’s general manager.
3. During the years 2000 and 2001, defendant ROBERT GENE
CABLE (“CABLE”), a resident of La Crescenta, California, and a
former salesman for Automation, owned and operated Enmark &
Associates, Inc., doing business as (“dba”) Enmark Aerospace
(“Enmark”), located in Valencia, California.
4. Unindicted co-conspirator J.P. was employed as
Automation’s controller from at least January, 2000 until
approximately March, 2001.
5. Unindicted co-conspirator K.G. was employed as
Automation’s accounting manager until approximately July, 2001,
when K.G. was then employed as Automation’s controller.
6. During 2000 and 2001, unindicted co-conspirator C.T., a
resident of Minden, Nevada, owned and operated Supermill, Inc.,
(“Supermill”), a company located in Carson City, Nevada.
Hurco, Inc., Patent-Infringement Lawsuit
7. In approximately August 2000, defendant HAAS paid
approximately $8.9 million, plus legal fees, to settle a long
fought, Federal patent-infringement lawsuit brought against
Automation and defendant HAAS by IMS Technology, Inc., (“Hurco,
Inc.”), in United States District Court.
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8. Defendant HAAS blamed the Federal Judge who presided
over the Hurco, Inc., lawsuit for the loss of the patent-
infringement case, and in approximately September 2000, defendant
HAAS directed defendant DUPUIS and unindicted co-conspirator J.P.
to get the $8.9 million, plus legal fees, paid to Hurco, Inc.,
back from the federal government. As a result, defendants HAAS
and DUPUIS, and unindicted co-conspirator J.P. created various
tax fraud schemes to enable defendant HAAS to recover from the
U.S. government the $8.9 million, plus legal fees, paid to Hurco,
Inc.
Bogus Invoices
9. One of the tax fraud schemes created by defendant DUPUIS
and unindicted co-conspirator J.P. at defendant HAAS’s direction
involved defendant HAAS’s’ payment of bogus invoices with
Automation checks for the fictitious purchases of equipment from
two conspiring companies, Enmark, owned by defendant CABLE, and
Supermill, owned by unindicted co-conspirator C.T. Defendant
HAAS arranged for defendant CABLE’s and unindicted co-conspirator
C.T.’s involvement in the bogus invoice tax fraud scheme.
10. Bogus invoices, purchase orders, and receiving
documents were created for the alleged purchases of “weldments”,
“gantry bases”, or other large steel equipment by Automation from
Enmark and Supermill, and defendant HAAS either signed, or caused
to be endorsed by his stamp signature, the Automation checks made
payable to Enmark and Supermill for payments on the bogus
invoices.
11. Although, as defendants HAAS, DUPUIS, and CABLE, and
unindicted co-conspirators J.P. and C.T. well knew, no
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“weldments”, “gantry bases”, or other equipment were actually
being delivered or purchased, Automation paid the amounts on each
invoice, which ranged from $225,000 to $998,000, by issuing
checks to Enmark and Supermill, and claimed the payments of such
bogus invoices on Automation’s financial books as false expenses,
specifically, false “costs of goods sold”.
12. Enmark and Supermill returned checks for, in most
instances, approximately 98% of the amount paid by Automation on
each invoice. The Enmark and Supermill checks were made payable
to HAAS’s 100% owned, C-Corporation, CNC, and such return checks
were disguised as non-taxable transactions, i.e., either as
“paid-in-capital” or as “loans from shareholder.”
13. In 2000, defendant CABLE, on behalf of Enmark, received
and cashed at least $14,730,480 in Automation checks authorized
by defendant HAAS in furtherance of the bogus invoice scheme.
Defendant CABLE returned approximately 98% of the $14,730,480 to
defendant HAAS either personally or through CNC, defendant HAAS’s
100% owned C-Corporation, and defendant CABLE retained the 2%
difference.
14. In 2000, unindicted co-conspirator C.T., on behalf of
Supermill, received and cashed at least $8,925,000 in Automation
checks authorized by defendant HAAS in furtherance of the bogus
invoice scheme. Unindicted co-conspirator C.T. returned
approximately 98-99% of the $8,925,000 to defendant HAAS either
personally or through CNC, defendant HAAS’s 100% owned C-
Corporation, and unindicted co-conspirator C.T. retained the 1-2%
difference.
15. In 2001, after unindicted co-conspirator J.P. withdrew
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from the conspiracy and left the employment of Automation,
defendant DUPUIS directed unindicted co-conspirator K.G., who
replaced J.P. as Automation’s controller, to continue with the
bogus invoice scheme with Enmark and Supermill.
16. In 2001, defendant CABLE, on behalf of Enmark, received
and cashed at least $10,978,000 in Automation checks authorized
by defendant HAAS in furtherance of the bogus invoice scheme.
Defendant CABLE returned approximately 98% of the $10,978,000 to
defendant HAAS either personally or through CNC, defendant HAAS’s
100% owned C-Corporation, and defendant CABLE retained the 2%
difference.
17. In 2001, unindicted co-conspirator C.T., on behalf of
Supermill, received and cashed at least $2,929,634 in Automation
checks authorized by defendant HAAS in furtherance of the bogus
invoice scheme. Unindicted co-conspirator C.T. returned
approximately 98-99% of the $2,929,634 to defendant HAAS either
personally or through CNC, defendant HAAS’s 100% owned C-
Corporation, and unindicted co-conspirator C.T. retained the 1-2%
difference.
False Expenses For Overpayments and Returned Payments
18. During 2000 and 2001, additional tax fraud schemes were
created as a consequence of defendant HAAS’s directions to
defendant DUPUIS and unindicted co-conspirator J.P. to create tax
fraud schemes. One such scheme involved defendant HAAS’s’
authorizing the overpayment of purchases of goods from non-
conspiring companies by Automation.
19. Defendants HAAS and DUPUIS, unindicted co-conspirator
J.P., and others known and unknown to the grand jury caused
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checks or wire transfers to be issued from Automation to non-
conspiring companies in amounts significantly greater than the
true purchase prices of the goods being purchased. Defendants
HAAS and DUPUIS, and unindicted co-conspirator J.P., caused not
only the true purchase prices of the purchases to be paid, but
also the amounts overpaid to be fraudulently claimed on
Automation’s financial records as expenses, specifically, as
falsely inflated “costs of goods sold.”
20. For the most part, the non-conspiring companies were
directed by unindicted co-conspirator J.P. and others known and
unknown to the grand jury to return the overpayments by issuing
non-conspiring company checks or wire transfers which defendants
HAAS and DUPUIS and others known and unknown to the grand jury
caused to be deposited into bank accounts other than Automation’s
bank account, such as defendant HAAS’s personal bank accounts, or
to CNC’s bank account.
21. Another, similar tax fraud scheme involved claiming as
false expenses on Automation’s 2000 and 2001 financial records
payments made by Automation to C.C.M., a NASCAR race team, and
C.Title, a title company, (“100% returns”), even though
defendants HAAS and DUPUIS caused 100% of such payments to be
returned from C.C.M. and C.Title.
22. Defendants HAAS and DUPUIS, unindicted co-conspirator
J.P., and others known and unknown to the grand jury caused the
returned payments from C.C.M. and C.Title to be deposited into
bank accounts other than Automation’s bank account.
23. In 2000, defendants HAAS and DUPUIS, and others both
known and unknown to the grand jury, created additional false
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expenses for Automation by the overpayments and the “100%
returns” payments of at least $7,088,337.
24. In 2001, defendant HAAS and DUPUIS, and others both
known and unknown to the grand jury, created additional false
expenses for Automation by the overpayments and the “100%
returns” of at least $5,215,000.
Defendant HAAS’s Individual Tax Returns
25. Defendant HAAS claimed at least $30 million in false
expenses on Automation’s 2000 U.S. Corporation Income Tax Return
(Form 1120S), which falsely reduced Automation’s net profit by at
least $30 million, and the falsely reduced net profits then
flowed through to defendant HAAS’s U.S. Individual Income Tax
Return (1040) causing defendant HAAS’s personal income tax
liability for the 2000 tax year to be falsely reduced by at least
$12.5 million.
26. Defendant HAAS claimed at least $19 million in false
expenses on Automation’s 2001 U.S. Corporation Income Tax Return
(Form 1120S), which falsely reduced Automation’s net profit by at
least $19 million, and the falsely reduced net profits then
flowed through to defendant HAAS’s U.S. Individual Income Tax
Return (1040) causing defendant HAAS’s personal income tax
liabilities for the 2001 tax year to be falsely reduced by at
least $7.7 million.
Wire Fraud
27. In February 2001, defendant CABLE, on behalf of Enmark,
executed a Promissory Note (“Note”) for $300,000 with Pendragon
Staffing, Inc. (“Pendragon”), a Texas company owned and operated
by A.G. Pursuant to the Note, defendant CABLE, on behalf of
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Enmark, agreed to repay the $300,000 loan by paying Pendragon
twenty (20) regular monthly payments of $15,000 plus interest,
commencing in April 2001.
28. In June 2000, defendant CABLE, on behalf of Enmark,
also entered into a Technical Services Agreement (“TSA”) with
Pendragon. Pursuant to the TSA, Pendragon agreed to provide
Enmark with professional, technical and craft personnel. In
exchange, Enmark agreed to pay weekly invoices for the
professional, technical and craft personnel provided by
Pendragon.
29. In order to induce A.G. and Pendragon to enter into the
loan agreement, defendant CABLE, on behalf of Enmark, provided
A.G. and Pendragon with financial statements which included as
revenue the $25,708,480 Enmark received from Automation in 2000
and 2001 pursuant to the bogus invoice scheme. In reality,
however, defendant CABLE well knew that approximately 98% of the
$25,708,480 was returned to defendant HAAS’s 100% owned C-
Corporation, CNC, pursuant to the bogus invoice scheme, that such
funds did not represent actual revenue of Enmark, and that Enmark
had little, if any, revenue.
30. In April 2001, defendant CABLE, on behalf of Enmark,
defaulted on the Note and TSA. As a result, Pendragon commenced
legal proceedings against defendant CABLE and Enmark in Los
Angeles Superior Court to recover approximately $836,298 Enmark
allegedly owed to Pendragon on the defaulted Note and TSA.
31. In June 2001, Pendragon obtained a temporary
restraining order (“TRO”) against defendant CABLE and Enmark.
Pursuant to the TRO, defendant CABLE and Enmark were restrained
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from, among other things, disposing of any of Enmark’s accounts
receivable without the written approval of A.G.
32. In June 2001, defendant CABLE, on behalf of Enmark,
received an Automation check for $998,000 made payable to Enmark
pursuant to the bogus invoice scheme.
33. In June 2001, and subsequent to the issuance of
the TRO, defendant CABLE sent a copy of the Automation check for
$998,000 made payable to Enmark to A.G. via facsimile.
34. In June and July 2001, defendant CABLE sent A.G. a
series of e-mails requesting A.G.’s written approval for Enmark
to exchange an Enmark payment with defendant HAAS’s 100% owned C-
Corporation, CNC, for the Automation check for $998,000 made
payable to Enmark, which defendant CABLE sought to do in order to
continue Enmark’s participation in the bogus invoice scheme.
35. In reply e-mails, A.G. repeatedly refused to approve
defendant CABLE’s e-mail requests to allow Enmark to exchange an
Enmark payment with CNC for the Automation check for $998,000
made payable to Enmark. In addition, A.G. repeatedly told
defendant CABLE that Enmark was required to deposit the
Automation check for $998,000 made payable to Enmark into
Enmark’s business bank account pursuant to the TRO, and
repeatedly requested defendant CABLE to do so. However, despite
these requests, defendant CABLE failed to deposit the Automation
check for $998,000 made payable to Enmark into Enmark’s business
bank account.
36. In July 2001, defendant CABLE sent A.G. an e-mail
stating that if A.G. would allow Enmark to continue exchanging
Enmark checks with CNC for Automation checks made payable to
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Enmark, pursuant to the bogus invoice scheme, through October
2001, defendant CABLE, on behalf of Enmark, would be able to
fully repay A.G. and Pendragon the amount owed to Pendragon on
the defaulted Note and TSA. However, when defendant CABLE made
such representation to A.G., defendant CABLE well knew that he
would not be able to repay such amounts to A.G. and Pendragon by
such time, even if A.G. allowed Enmark to exchange such payments
with CNC.
37. In August 2001, following a meeting involving defendant
HAAS and counsel for A.G. and Pendragon, Pendragon commenced
further legal proceedings in Los Angeles Superior Court against
defendant CABLE, Enmark, Automation, defendant HAAS and CNC,
seeking, among other things, to recover approximately $836,298
Enmark allegedly owed to PENDGRAGON on the defaulted Note and
TSA.
38. In August 2001, defendant HAAS, on behalf of himself,
his 100% owned C-Corporation, CNC, and Automation, signed a
settlement agreement with Pendragon in connection with the
lawsuit filed against Automation, defendant HAAS, and CNC.
Pursuant to the terms of that settlement agreement, defendant
HAAS, on behalf of himself, his 100% owned C-Corporation, CNC,
and Automation, agreed to pay PENDGRAGON $525,000 to settle the
case. In addition, in the settlement agreement PENDGRAGON agreed
to assign its claims against defendant CABLE and Enmark on the
defaulted Note and TSA to defendant HAAS.
39. In August 2001, in accordance with the settlement
agreement, defendant DUPUIS delivered to counsel for Pendragon a
$525,000 cashier’s check made payable to Pendragon.
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40. These introductory allegations are re-alleged in Counts
One through Eleven of this indictment.
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COUNT ONE
[18 U.S.C. § 371]
[DEFENDANTS GENE FRANCIS HAAS,
DENIS ARTHUR DUPUIS, ROBERT GENE CABLE;
The Enmark Conspiracy]
I. OBJECT OF THE CONSPIRACY
Beginning on a date unknown, but at least as early as
September 2000 and continuing to at least on or about October
2002, in Los Angeles and Ventura Counties, within the Central
District of California and elsewhere, defendants GENE FRANCIS
HAAS (“HAAS”), DENIS ARTHUR DUPUIS (“DUPUIS”), and ROBERT GENE
CABLE (“CABLE”), and other persons both known and unknown to the
grand jury, conspired and agreed with each other to knowingly and
with the intent to defraud the United States, for the purpose of
impeding, impairing, obstructing, and defeating the lawful
Government functions of the Internal Revenue Service of the
Treasury Department in the ascertainment, computation, assessment
and collection of the revenue, namely: income taxes, in violation
of Title 18, United States Code, Section 371.
II. MEANS BY WHICH THE OBJECT OF THE CONSPIRACY WAS TO BE
ACCOMPLISHED
The object of the conspiracy was to be accomplished in
substance, as follows:
1. During the years 2000 and 2001, defendants HAAS and
DUPUIS, and others known and unknown to the grand jury, devised a
scheme to issue payments by Automation, a company solely owned by
defendant HAAS, for bogus purchases to create false business
expenses for Automation for the purpose of evading defendant
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HAAS’s personal federal income tax liabilities.
2. To facilitate this tax fraud scheme, defendant HAAS
recruited defendants CABLE, DUPUIS, and unindicted co-conspirator
J.P. to participate in the tax fraud conspiracy.
3. To facilitate the continuation of this tax fraud scheme,
defendant DUPUIS recruited unindicted co-conspirator K.G. to
participate in the tax fraud conspiracy after unindicted co-
conspirator J.P. withdrew from the tax fraud conspiracy.
4. Defendants HAAS, DUPUIS, and CABLE, and others known and
unknown to the grand jury, caused false purchase orders and
receiving documents to be created to provide the appearance that
Automation was purchasing goods, identified in large part as
weldments, from Enmark, a company solely owned by defendant
CABLE.
5. Defendants HAAS, DUPUIS, and CABLE, and others known and
unknown to the grand jury, caused false invoices and false
packing slips to be prepared from Enmark to Automation to further
provide the appearance that Automation was purchasing goods,
identified in large part as weldments, from Enmark.
6. Defendants HAAS, DUPUIS, and CABLE, and others known and
unknown to the grand jury, agreed to cause Automation checks to
be issued to Enmark in exchange for checks from Enmark returning
98% of the amounts of the Automation checks.
7. Defendants HAAS and DUPUIS, and others known and unknown
to the grand jury, caused the Automation checks which were issued
to Enmark to be fraudulently booked on Automation’s 2000 and 2001
financial records as cost of goods expenses.
8. Defendants HAAS, DUPUIS, and CABLE, and others known and
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unknown to the grand jury, agreed that defendant CABLE would
retain 2% of the Automation checks in exchange for returning the
remaining 98% with Enmark checks issued to CNC, another company
solely owned by defendant HAAS.
9. Defendants HAAS and DUPUIS, and others known and unknown
to the grand jury, caused the Enmark checks made payable to CNC
to be deposited into CNC’s bank account or into defendant HAAS’s
personal trust bank account.
10. Defendants HAAS and DUPUIS, and others known and
unknown to the grand jury, caused the falsely inflated cost of
goods expenses from the Automation checks to Enmark to be
fraudulently claimed as cost of goods expenses on Automation’s
2000 and 2001 U.S. Corporation Income Tax Returns, thereby
decreasing Automation’s reportable net income, as well as
decreasing defendant HAAS’s individual income tax liabilities on
defendant HAAS’s 2000 and 2001 U.S. Individual Income Tax
Returns.
11. The exchange of Automation and Enmark checks by
defendants HAAS, DUPUIS, and CABLE, and others known and unknown
to the grand jury, caused Automation’s 2000 and 2001 U.S.
Corporation Income tax returns to claim falsely inflated cost of
goods expenses from the false Enmark transactions in the amounts
of at least $14,730,480 in 2000 and $10,978,000 in 2001.
12. The falsely inflated cost of goods expenses claimed by
defendant HAAS on Automation’s 2000 and 2001 U.S. Corporation
Income Tax Returns with regard to the false Enmark transactions
fraudulently reduced the reportable net income of Automation,
which flowed through to defendant HAAS’s 2000 and 2001 U.S.
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Individual Income Tax Returns so as to fraudulently reduce
defendant HAAS’s personal income tax liabilities for the years
2000 and 2001 in the amounts of at least $6,008,269 in 2000 and
$4,421,170 in 2001.
13. Defendant HAAS signed the U.S. Federal Income Tax
Returns for Automation and for defendant HAAS for the years 2000
and 2001 and caused them to be filed with the Internal Revenue
Service.
III. OVERT ACTS
In furtherance of the conspiracy and to accomplish the
object of the conspiracy, defendants HAAS, DUPUIS, and CABLE, and
others known and unknown to the grand jury, committed the
following overt acts, among others, in Los Angeles and Ventura
Counties, within the Central District of California and
elsewhere, on or about the following dates:
Automation CHECK NUMBER 162814 ($998,000)
1. On or about October 18, 2000, defendant CABLE caused the
preparation of Enmark Invoice #2001018 to Automation in the
amount of $998,000.
2. On or about October 18, 2000, defendant CABLE caused the
preparation of Enmark Packing List relating to Invoice #2001018.
3. On a date unknown but on or before October 19, 2000,
defendants HAAS and DUPUIS caused the preparation of Automation
Purchase Order 840226 for an alleged purchase of 200 weldments
for $998,000 from Enmark.
4. On or about October 19, 2000, defendants HAAS and DUPUIS
caused the creation of an Automation Receiving Document for 200
weldments from Enmark.
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5. On or about October 19, 2000, defendants HAAS and DUPUIS
caused the preparation of Automation check #162814, in the amount
of $998,000, made payable to Enmark.
6. On or about October 19, 2000, defendant HAAS caused his
name to be stamped as an endorsement on Automation check #162814.
7. On or about October 19, 2000, defendants HAAS and DUPUIS
caused the amount of $998,000 to be booked as cost of goods
expense on Automation’s 2000 financial records.
8. On or about October 19, 2000, defendant CABLE caused the
preparation of Enmark check #2064, in the amount of $978,040,
made payable to CNC.
9. On or about October 19, 2000, defendant CABLE signed
Enmark check #2064.
10. On or about October 19, 2000, defendants HAAS and
DUPUIS caused Automation check #162814 to be provided to
defendant CABLE.
11. On or about October 20, 2000, defendant CABLE caused
Automation check #162814 to be deposited into Enmark’s bank
account.
12. On a date unknown but on or between October 19, 2000,
and November 2, 2000, defendant CABLE provided defendants HAAS
and DUPUIS, and others known and unknown to the grand jury, with
Enmark check #2064.
13. On or about November 2, 2000, defendants HAAS and
DUPUIS caused Enmark check #2064 to be deposited into CNC’s bank
account.
Automation CHECK NUMBER 158791 ($978,040)
14. On or about November 1, 2000, defendant CABLE caused
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the preparation of Enmark Invoice #2001102 to Automation in the
amount of $978,040.
15. On a date unknown but on or before November 2, 2000,
defendants HAAS and DUPUIS caused Automation Purchase Order
840226 to reflect an alleged purchase of 196 weldments for
$978,040 from Enmark.
16. On or about November 2, 2000, in Oxnard, California,
defendants HAAS and DUPUIS caused the amount of $978,040 to be
booked as cost of goods expense on Automation’s 2000 financial
records.
17. On or about November 3, 2000, defendant CABLE caused
the preparation of Enmark check #2087, in the amount of $958,480,
made payable to CNC.
18. On or about November 3, 2000, defendant CABLE signed
Enmark check #2087.
19. On or about November 3, 2000, defendants HAAS and
DUPUIS caused the preparation of Automation check #158791 in the
amount of $978,040, made payable to Enmark.
20. On or about November 3, 2000, defendant HAAS signed his
name as an endorsement on Automation check #158791.
21. On or about November 3, 2000, defendants HAAS and
DUPUIS caused Automation check #158791 to be provided to
defendant CABLE.
22. On or about November 3, 2000, defendant CABLE caused
Automation check #158791 to be deposited into Enmark’s bank
account.
23. On a date unknown but sometime between November 3, 2000
and November 16, 2000, defendant CABLE provided defendants HAAS
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and DUPUIS, and others known and unknown to the grand jury, with
Enmark check #2087, in the amount of $958,480, made payable to
CNC.
24. On or about November 16, 2000, defendants HAAS and
DUPUIS caused Enmark check #2087 to be deposited into CNC’s bank
account.
Automation CHECK NUMBER 158716 ($998,000)
25. On or about December 5, 2000, defendant CABLE caused
the preparation of Enmark invoice #2001118 to Automation in the
amount of $998,000.
26. On or about December 5, 2000, defendant CABLE caused
the preparation of Enmark check #3004, in the amount of $978,040,
made payable to CNC.
27. On or about December 5, 2000, defendant CABLE signed
Enmark check #3004.
28. On a date unknown but on or before December 5, 2000,
defendants HAAS and DUPUIS caused the preparation of Automation
Purchase Order 840226-2 to Enmark for the alleged purchase of
weldments.
29. On or about December 5, 2000, defendants HAAS and
DUPUIS caused the preparation of Automation check #158716 in the
amount of $998,000, made payable to Enmark.
30. On or about December 5, 2000, defendant HAAS signed his
name as an endorsement on Automation check #158716.
31. On or about December 5, 2000, defendants HAAS and
DUPUIS caused Automation check #158716 to be provided to
defendant CABLE.
32. On or about December 5, 2000, defendants HAAS and
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DUPUIS caused the amount of $998,000 to be booked as cost of
goods expense on Automation’s 2000 financial records.
33. On or about December 5, 2000, defendant CABLE caused
Automation check #158716 to be deposited into Enmark’s bank
account.
34. On or about December 5, 2000 defendant CABLE provided
defendants HAAS and DUPUIS, and others known and unknown to the
grand jury, with Enmark check # 3004.
35. On or about December 6, 2000, defendants HAAS and
DUPUIS caused Enmark check #3004 to be deposited into CNC’s bank
account.
Automation CHECK NUMBER 157821 ($998,000)
36. On or about December 6, 2000, defendant CABLE caused
the preparation of Enmark invoice #2001119 to Automation in the
amount of $998,000.
37. On a date unknown but on or before December 8, 2000,
defendants HAAS and DUPUIS caused the preparation of an
Automation Purchase Order to Enmark for the alleged purchase of
200 weldments.
38. On or about December 8, 2000, defendants HAAS and
DUPUIS caused the preparation of Automation check #158721 in the
amount of $998,000, made payable to Enmark.
39. On or about December 8, 2000, defendant HAAS signed his
name as an endorsement on Automation check #158721.
40. On or about December 8, 2000, defendants HAAS and
DUPUIS caused Automation check #158721 to be provided to
defendant CABLE.
41. On or about December 8, 2000, defendants HAAS and
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DUPUIS caused the amount of $998,000 to be booked as cost of
goods expense on Automation’s 2000 financial records.
42. On or about December 8, 2000, defendant CABLE caused
Automation check #158721 to be deposited into Enmark’s bank
account.
43. On or about December 11, 2000, defendant CABLE caused
the preparation of Enmark check #3034, in the amount of $978,040,
made payable to CNC.
44. On or about December 11, 2000, defendant CABLE signed
Enmark check #3034.
45. On or about December 11, 2000, defendant CABLE provided
defendants HAAS and DUPUIS, and others known and unknown to the
grand jury, with Enmark check #3034.
46. On or about December 15, 2000, defendants HAAS and
DUPUIS caused Enmark check #3034 to be deposited into CNC’s bank
account.
Automation CHECK NUMBER 158735 ($958,080)
47. On or about December 21, 2000, defendant CABLE caused
the preparation of Enmark check #3058, in the amount of $939,918,
made payable to CNC.
48. On or about December 21, 2000, defendant CABLE signed
Enmark check #3058.
49. On or about December 21, 2000, defendant CABLE caused
the preparation of Enmark invoice #2001223 to Automation in the
amount of $958,080.
50. On or about December 26, 2000, defendants HAAS and
DUPUIS caused the amount of $958,080 to be booked as cost of
goods expense on Automation’s 2000 financial records.
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51. On or about December 26, 2000, defendants HAAS and
DUPUIS caused the preparation of Automation check #158735 in the
amount of $958,080, made payable to Enmark.
52. On or about December 26, 2000, defendant HAAS caused
his name to be stamped as an endorsement on Automation check
#158735.
53. On or about December 26, 2000, defendants HAAS and
DUPUIS caused Automation check #158735 to be provided to
defendant CABLE.
54. On or about December 26, 2000, defendant CABLE caused
Automation check #158735 to be deposited into Enmark’s bank
account.
55. On a date unknown but on or before December 29, 2000,
defendant CABLE provided defendants HAAS and DUPUIS, and others
known and unknown to the grand jury, with Enmark check #3058, in
the amount of $939,918, made payable to CNC.
56. On or about December 29, 2000, defendants HAAS and
DUPUIS caused Enmark check #3058 to be deposited into CNC’s bank
account.
Automation CHECK NUMBER 175866 ($998,000)
57. On or about March 21, 2001, defendant DUPUIS brought
unindicted co-conspirator K.G. into the scheme by informing
unindicted co-conspirator K.G. that defendant CABLE would present
Automation with an invoice and also deliver a check, and
instructing unindicted co-conspirator K.G. that the difference
between the invoice and the check was to be 2%.
58. On or about May 12, 2001, defendant CABLE caused the
preparation of Enmark check #002, in the amount of $978,040, made
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payable to CNC.
59. On or about May 12, 2001, defendant CABLE signed Enmark
check #002.
60. On or about May 14, 2001, defendant CABLE caused the
preparation of Enmark invoice #01/000242 to Automation for 200
weldments in the amount of $998,000.
61. On or about May 22, 2001, defendants HAAS and DUPUIS
caused the amount of $998,000 to be booked as cost of goods
expense on Automation’s 2001 financial records.
62. On or about May 25, 2001, defendants HAAS and DUPUIS
caused the preparation of Automation check #175866 in the amount
of $998,000, made payable to Enmark.
63. On or about May 25, 2001, defendant HAAS caused his
name to be stamped as an endorsement on Automation check #175866.
64. On a date unknown but on or between May 25, 2001 and
May 30, 2001, defendants HAAS and DUPUIS caused Automation check
#175866 to be provided to defendant CABLE.
65. On or about May 30, 2001, defendant CABLE caused
Automation check #175866 to be deposited into Enmark’s bank
account.
66. On a date unknown but on or between May 12, 2001, and
June 4, 2001, defendant CABLE provided defendants HAAS and
DUPUIS, and others known and unknown to the grand jury with
Enmark check #002.
67. On or about June 4, 2001, defendants HAAS and DUPUIS
caused Enmark check #002 to be deposited into CNC’s bank account.
Automation CHECK NUMBER 176679 ($998,000)
68. On or about June 1, 2001, defendant CABLE caused the
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preparation of Enmark check #059, in the amount of $978,040, made
payable to CNC.
69. On or about June 1, 2001, defendant CABLE signed Enmark
check #059.
70. On or about June 1, 2001, defendant CABLE caused the
preparation of Enmark invoice #01/000271 to Automation in the
amount of $998,000.
71. On or about June 5, 2001, defendants HAAS and DUPUIS
caused the amount of $998,000 to be booked as cost of goods
expense on Automation’s 2001 financial records.
72. On or about June 8, 2001, defendants HAAS and DUPUIS
caused the preparation of Automation check #176679 in the amount
of $998,000, made payable to Enmark.
73. On or about June 8, 2001, defendant HAAS caused his
name to be stamped as an endorsement on Automation check #176679.
74. On a date unknown but on or between June 8, 2001 and
June 12, 2001, defendants HAAS and DUPUIS caused Automation check
#176679 to be provided to defendant CABLE.
75. On or about June 12, 2001, defendant CABLE caused
Automation check #175866 to be deposited into Enmark’s bank
account.
76. On a date unknown but on or between June 1, 2001, and
June 14, 2001, defendant CABLE provided defendants HAAS and
DUPUIS, and others known and unknown to the grand jury with
Enmark check #059.
77. On or about June 14, 2001, defendants HAAS and DUPUIS
caused Enmark check #059 to be deposited into CNC’s bank account.
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HAAS’s Individual Federal Tax Returns
78. On or about October 15, 2001, defendant HAAS signed and
caused to be filed HAAS’s 2000 U.S. Individual Income Tax Return.
79. On or about October 14, 2002, defendant HAAS signed and
caused to be filed HAAS’s 2001 U.S. Individual Income Tax Return.
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COUNT TWO
[18 U.S.C. § 371]
[DEFENDANTS GENE FRANCIS HAAS,
DENIS ARTHUR DUPUIS;
The Supermill Conspiracy]
I. OBJECT OF THE CONSPIRACY
Beginning on a date unknown, but at least as early as
September 2000 and continuing to at least on or about October
2002, in Los Angeles and Ventura Counties, within the Central
District of California and elsewhere, defendants GENE FRANCIS
HAAS (“HAAS”) and DENIS ARTHUR DUPUIS (“DUPUIS”), and unindicted
co-conspirator C.T. (“C.T.”) and other persons both known and
unknown to the grand jury, conspired and agreed with each other
to knowingly and with the intent to defraud the United States,
for the purpose of impeding, impairing, obstructing, and
defeating the lawful Government functions of the Internal Revenue
Service of the Treasury Department in the ascertainment,
computation, assessment and collection of the revenue, namely:
income taxes, in violation of Title 18, United States Code,
Section 371.
II. MEANS BY WHICH THE OBJECT OF THE CONSPIRACY WAS TO BE
ACCOMPLISHED
The object of the conspiracy was to be accomplished in
substance, as follows:
1. During the years 2000 and 2001, defendants HAAS and
DUPUIS, and others known and unknown to the grand jury, devised a
scheme to issue payments by Automation, a company solely owned by
defendant HAAS, for bogus purchases to create false business
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expenses for Automation for the purpose of evading defendant
HAAS’s personal federal income tax liabilities.
2. To facilitate this tax fraud scheme, defendant HAAS
recruited defendant DUPUIS, and unindicted co-conspirators C.T.
and J.P. to participate in the tax fraud conspiracy.
3. To facilitate the continuation of this tax evasion
scheme, defendant DUPUIS recruited unindicted co-conspirator K.G.
to participate in the tax fraud conspiracy after unindicted co-
conspirator J.P. withdrew from the tax fraud conspiracy.
4. Defendants HAAS and DUPUIS, and others known and unknown
to the grand jury, caused false purchase orders to be created to
provide the appearance that Automation was purchasing goods,
identified in large part as gantry mill bases, from Supermill, a
company solely owned by unindicted co-conspirator C.T.
5. Defendants HAAS and DUPUIS, and others known and unknown
to the grand jury, caused false invoices and false packing slips
and packing lists to be prepared from Supermill to Automation to
further provide the appearance that Automation was purchasing
goods, identified in large part as gantry mill bases, from
Supermill.
6. Defendants HAAS and DUPUIS, and others known and unknown
to the grand jury, agreed to cause Automation checks to be issued
to Supermill in exchange for checks from Supermill returning 98-
99% of the amounts of the Automation checks.
7. Defendants HAAS and DUPUIS, and others known and unknown
to the grand jury, caused the Automation checks which were issued
to Supermill to be fraudulently booked on Automation’s 2000 and
2001 financial records as cost of goods expenses.
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8. Defendants HAAS and DUPUIS, and others known and unknown
to the grand jury, agreed that unindicted co-conspirator C.T.
would retain 1-2% of the Automation checks in exchange for
returning the remaining 98-99% with Supermill checks issued to
CNC, another company solely owned by defendant HAAS.
9. Defendants HAAS and DUPUIS, and others known and unknown
to the grand jury, caused the Supermill checks made payable to
CNC to be deposited into CNC’s bank account and defendant HAAS’s
personal bank account.
10. Defendants HAAS and DUPUIS, and others known and
unknown to the grand jury caused the falsely inflated cost of
goods expenses from the Automation checks to Supermill to be
fraudulently claimed as cost of goods expenses on Automation’s
2000 and 2001 U.S. Corporation Income Tax Returns, thereby
decreasing Automation’s reportable net income, as well as
decreasing defendant HAAS’s individual income tax liabilities on
defendant HAAS’s 2000 and 2001 U.S. Individual Income Tax
Returns.
11. The exchange of Automation and Supermill checks by
defendants HAAS and DUPUIS, unindicted co-conspirator C.T., and
others known and unknown to the grand jury, caused Automation’s
2000 and 2001 U.S. Corporation Income Tax Returns to claim
falsely inflated cost of goods expenses from the false Supermill
transactions in the amounts of at least $8,925,000 in 2000 and
$2,929,634 in 2001.
12. The falsely inflated cost of goods expenses claimed by
defendant HAAS on Automation’s 2000 and 2001 U.S. Corporation
Income Tax Returns with regard to the false Supermill
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transactions fraudulently reduced the reportable net income of
Automation, which flowed through to defendant HAAS’s 2000 and
2001 U.S. Individual Income Tax Returns so as to fraudulently
reduce defendant HAAS’s personal income tax liabilities for the
years 2000 and 2001 in the amounts of at least $3,640,329 in 2000
and $1,179,851 in 2001.
13. Defendant HAAS signed the U.S. Federal Income Tax
Returns for Automation and for defendant HAAS for the years 2000
and 2001 and caused them to be filed with the Internal Revenue
Service.
III. OVERT ACTS
In furtherance of the conspiracy and to accomplish the
object of the conspiracy, defendants HAAS and DUPUIS, and others
known and unknown to the grand jury, committed the following
overt acts, among others, in Los Angeles and Ventura Counties,
within the Central District of California and elsewhere, on or
about the following dates:
Automation CHECK NUMBER 158797 ($510,000)
1. On or about November 22, 2000, unindicted co-conspirator
C.T. caused the preparation of Supermill Invoice #20-7380 to
Automation in the amount of $510,000.
2. On or about November 22, 2000, unindicted co-conspirator
C.T. caused the preparation of Supermill Packing Slip relating to
Supermill Invoice #20-7380.
3. On or about November 22, 2000, defendants HAAS and
DUPUIS caused the preparation of Automation check #158797, in the
amount of $510,000, made payable to Supermill.
4. On or about November 22, 2000, defendant HAAS signed his
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name as an endorsement on Automation check #158797.
5. On a date unknown but on or between November 22, 2000,
and November 27, 2000, defendants HAAS and DUPUIS caused
Automation check #158797 to be provided to unindicted co-
conspirator C.T.
6. On or about November 27, 2000, unindicted co-conspirator
C.T. caused Automation check #158797 to be deposited into
Supermill’s bank account.
7. On or about November 28, 2000, unindicted co-conspirator
C.T. caused the preparation of Supermill check #3071, in the
amount of $504,900, made payable to CNC.
8. On or about November 28 2000, unindicted co-conspirator
C.T. signed Supermill check #3071.
9. On a date unknown but on or between November 28, 2000,
and November 29, 2000, unindicted co-conspirator C.T. provided
defendants HAAS and DUPUIS, and others known and unknown to the
grand jury, with Supermill check #3071.
10. On or about November 29, 2000, defendants HAAS and
DUPUIS caused Supermill check #3071 to be deposited into CNC’s
bank account.
11. On or about November 30, 2000, defendants HAAS and
DUPUIS caused the amount of $510,000 to be booked as cost of
goods expense on Automation’s 2000 financial records.
Automation CHECK NUMBER 158752 ($935,000)
12. On a date unknown but on or before December 26, 2000,
unindicted co-conspirator C.T. caused the preparation of
Supermill check #3110, in the amount of $930,334, made payable to
CNC.
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13. On a date unknown but on or before December 26, 2000,
unindicted co-conspirator C.T. signed Supermill check #3110.
14. On a date unknown but on or before December 27, 2000,
unindicted co-conspirator C.T. provided defendants HAAS and
DUPUIS, and others known and unknown to the grand jury, with
Supermill check #3110.
15. On or about December 27, 2000, defendants HAAS and
DUPUIS caused Supermill check #3110 to be deposited into CNC’s
bank account.
16. On or about December 28, 2000, defendants HAAS and
DUPUIS caused the preparation of Automation check #158752, in the
amount of $935,000, made payable to Supermill.
17. On or about December 28, 2000, defendant HAAS signed
his name as an endorsement on Automation check #158752.
18. On or about December 29, 2000, defendants HAAS and
DUPUIS caused the amount of $935,000 to be booked as cost of
goods expense on Automation’s 2000 financial records.
19. On a date unknown but on or between December 28, 2000,
and December 29, 2000, defendants HAAS and DUPUIS caused
Automation check #158752 to be provided to unindicted co-
conspirator C.T.
20. On or about December 29, 2000, unindicted co-
conspirator C.T. caused Automation check #158752 to be deposited
into Supermill’s bank account.
Automation CHECK NUMBER 158753 ($935,000)
21. On or about October 6, 2000, unindicted co-conspirator
C.T. caused the preparation of Supermill Invoice #00-1015 to
Automation in the amount of $935,000.
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24. On or about December 28, 2000, defendants HAAS and
DUPUIS caused the preparation of Automation check #158753, in the
amount of $765,000, made payable to Supermill.
25. On or about December 28, 2000, defendant HAAS signed
his name as an endorsement on Automation check #158753.
26. On or about December 29, 2000, defendants HAAS and
DUPUIS caused the amount of $765,000 to be booked as cost of
goods expense on Automation’s 2000 financial records.
27. On a date unknown but on or between December 28, 2000,
and December 29, 2000, defendants HAAS and DUPUIS caused
Automation check #158753 to be provided to unindicted co-
conspirator C.T.
28. On or about December 29, 2000, unindicted co-
conspirator C.T. caused Automation check #158753 to be deposited
into Supermill’s bank account.
29. On or before December 29, 2000, unindicted co-
conspirator C.T. caused the preparation of Supermill check #3140,
in the amount of $749,700, made payable to CNC.
30. On or before December 29, 2000, unindicted co-
conspirator C.T. signed Supermill check #3140.
31. On a date unknown but on or before December 29, 2000,
unindicted co-conspirator C.T. provided defendants HAAS and
DUPUIS, and others known and unknown to the grand jury, with
Supermill check #3140.
32. On or about December 29, 2000, defendants HAAS and
DUPUIS, caused Supermill check #3140 to be deposited into CNC’s
bank account.
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Automation CHECK NUMBER 158766 ($1,846,634)
33. On a date unknown but on or before December 20, 2000,
unindicted co-conspirator C.T. caused the preparation of
Supermill check #3132, in the amount of $930,334, made payable to
CNC.
34. On a date unknown but on or before December 20, 2000,
unindicted co-conspirator C.T. signed Supermill check #3132.
35. On a date unknown but on or before December 20, 2000,
unindicted co-conspirator C.T. caused the preparation of
Supermill check #3126, in the amount of $916,300, made payable to
CNC.
36. On a date unknown but on or before December 20, 2000,
unindicted co-conspirator C.T. signed Supermill check #3126.
37. On a date unknown but on or before December 29, 2000,
unindicted co-conspirator C.T. provided defendants HAAS and
DUPUIS, and others known and unknown to the grand jury, with
Supermill check #3132.
38. On a date unknown but on or before December 29, 2000,
unindicted co-conspirator C.T. provided defendants HAAS and
DUPUIS, and others known and unknown to the grand jury, with
Supermill check #3126.
39. On or about December 29, 2000, defendants HAAS and
DUPUIS caused Supermill check #3132 to be deposited into CNC’s
bank account.
40. On or about December 29, 2000, defendants HAAS and
DUPUIS caused Supermill check #3126 to be deposited into CNC’s
bank account.
41. On or about January 4, 2001, defendants HAAS and DUPUIS
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caused the preparation of Automation check #158766, in the amount
of $1,846,634, made payable to Supermill.
42. On or about January 4, 2001, defendant HAAS signed
Automation check #158766.
43. On a date unknown but on or between January 4, 2001,
and January 5, 2001, defendants HAAS and DUPUIS caused Automation
check #158766 to be provided to unindicted co-conspirator C.T.
44. On or about January 5, 2001, unindicted co-conspirator
C.T. caused Automation check #158766 to be deposited into
Supermill’s bank account.
45. On or about January 17, 2001, defendants HAAS and
DUPUIS caused the amount of $1,846,634 to be booked as cost of
goods expense on Automation’s 2001 financial records.
Automation CHECK NUMBER 184937 ($228,000)
46. On or about November 1, 2001, defendants HAAS and
DUPUIS caused the amount of $228,000 to be booked as cost of
goods expense on Automation’s 2001 financial records.
47. On or about November 2, 2001, defendants HAAS and
DUPUIS caused the preparation of Automation check #184937, in the
amount of $228,000, made payable to Supermill.
48. On or about November 2, 2001, defendant HAAS caused his
name to be stamped as an endorsement on Automation check #184937.
49. On a date unknown but on or between November 2, 2001,
and November 7, 2001, defendants HAAS and DUPUIS caused
Automation check #184937 to be provided to unindicted co-
conspirator C.T.
50. On or about November 7, 2001, unindicted co-conspirator
C.T. caused Automation check #184937 to be deposited into
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Supermill’s bank account.
51. On or about November 12, 2001, unindicted co-
conspirator C.T. caused the preparation of Supermill check #4015,
in the amount of $223,440, made payable to CNC.
52. On or about November 12, 2001, unindicted co-
conspirator C.T. signed Supermill check #4015.
53. On a date unknown but on or before November 16, 2001,
unindicted co-conspirator C.T. provided defendants HAAS and
DUPUIS, and others known and unknown to the grand jury, with
Supermill check #4015.
54. On a date unknown but on or before November 16, 2001,
defendants HAAS and DUPUIS caused Supermill check #4105 to be
deposited into CNC’s bank account.
Automation CHECK NUMBER 185899 ($285,000)
55. On or about November 21, 2001, defendants HAAS and
DUPUIS caused the preparation of Automation check #185899, in the
amount of $285,000, made payable to Supermill.
56. On or about November 21, 2001, defendant HAAS caused
his name to be stamped as an endorsement on Automation check
#185899.
57. On or about November 21, 2001, defendants HAAS and
DUPUIS caused the amount of $285,000 to be booked as cost of
goods expense on Automation’s 2001 financial records.
58. On a date unknown but on or between November 21, 2001,
and November 29, 2001, defendants HAAS and DUPUIS caused
Automation check #185899 to be provided to unindicted co-
conspirator C.T.
59. On or about November 29, 2001, unindicted co-
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conspirator C.T. caused Automation check #185899 to be deposited
into Supermill’s bank account.
60. On or about December 4, 2001, unindicted co-conspirator
C.T. caused the preparation of Supermill check #4040, in the
amount of $279,300, made payable to CNC.
61. On or about December 4, 2001, unindicted co-conspirator
C.T. signed Supermill check #4040.
62. On a date unknown but on or before December 5, 2001,
unindicted co-conspirator C.T. provided defendants HAAS and
DUPUIS, and others known and unknown to the grand jury, with
Supermill check #4040.
63. On a date unknown but on or before December 5, 2001,
defendants HAAS and DUPUIS caused Supermill check #4040 to be
deposited into CNC’s bank account.
HAAS’s Individual Tax Returns
64. On or about October 15, 2001, defendant HAAS signed and
caused to be filed HAAS’s 2000 U.S. Individual Income Tax Return.
65. On or about October 14, 2002, defendant HAAS signed and
caused to be filed HAAS’s 2001 U.S. Individual Income Tax Return.
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COUNT THREE
[18 U.S.C. § 371]
[DEFENDANTS GENE FRANCIS HAAS,
DENIS ARTHUR DUPUIS
The Overpayment Conspiracy]
I. OBJECT OF THE CONSPIRACY
Beginning on a date unknown, but at least as early as
September 2000 and continuing to at least on or about October
2002, in Los Angeles and Ventura Counties, within the Central
District of California and elsewhere, defendants GENE FRANCIS
HAAS (“HAAS”) and DENIS ARTHUR DUPUIS (“DUPUIS”), and other
persons both known and unknown to the grand jury, conspired and
agreed with each other to knowingly and with the intent to
defraud the United States, for the purpose of impeding,
impairing, obstructing, and defeating the lawful Government
functions of the Internal Revenue Service of the Treasury
Department in the ascertainment, computation, assessment and
collection of the revenue, namely: income taxes, in violation of
Title 18, United States Code, Section 371.
II. MEANS BY WHICH THE OBJECT OF THE CONSPIRACY WAS TO BE
ACCOMPLISHED
The object of the conspiracy was to be accomplished in
substance, as follows:
1. During the years 2000 and 2001, defendants HAAS and
DUPUIS, and others known and unknown to the grand jury, devised a
scheme to issue payments by Automation, a company solely owned by
defendant HAAS, for false expense overpayments for Automation for
the purpose of evading defendant HAAS’s personal federal income
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tax liabilities.
2. To facilitate this tax fraud scheme, defendant HAAS
recruited unindicted co-conspirator J.P. to participate in the
tax fraud conspiracy.
3. Defendants HAAS and DUPUIS, unindicted co-conspirator
J.P. and others known and unknown to the grand jury, at defendant
HAAS’s direction authorized Automation to overpay on purchases of
goods from non-conspiring companies.
4. Defendant HAAS caused to be signed multiple Automation
checks or wire transfers to be made to non-conspiring companies
in amounts significantly greater than the true purchase prices of
the goods actually purchased by Automation.
5. Defendants HAAS and DUPUIS, and others known and unknown
to the grand jury, caused checks and wire transfers (“100%
returns”) to be made to non-conspiring companies, while causing
100% of such checks and wire transfers to be returned
immediately, if not simultaneously.
6. Defendants HAAS and DUPUIS, and others known and unknown
to the grand jury, caused the amounts of the overpaid expenses
and amounts of the “100% returns” to be fraudulently claimed on
Automation’s financial records as expenses, specifically, falsely
inflated “costs of goods sold”.
7. For the most part, the non-conspiring companies were
directed by unindicted co-conspirator J.P. and others known and
unknown to the grand jury, to return the overpayments and the
amounts of the “100% returns” by issuing non-conspiring company
checks or by making wire transfers, which defendants HAAS and
DUPUIS, and others known and unknown to the grand jury, caused to
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be deposited into bank accounts other than Automation’s bank
accounts, such as defendant HAAS’s personal bank accounts, or to
CNC’s bank account.
8. Defendants HAAS and DUPUIS, and others known and unknown
to the grand jury, caused the falsely inflated costs of goods
expenses from the Automation checks and wires to non-conspiring
companies for the overpayments and the “100% returns” to be
fraudulently claimed as cost of goods expenses on Automation’s
2000 and 2001 U.S. Corporation Income Tax Return, thereby
decreasing Automation’s reportable net income, as well as
decreasing defendant HAAS’s individual income tax liabilities on
defendant HAAS’s 2000 and 2001 U.S. Individual Income Tax Return.
9. The creation of additional false expenses for Automation
by defendants HAAS and DUPUIS, and others known and unknown to
the grand jury, caused Automation’s 2000 U.S. Corporation Income
Tax Return to claim falsely inflated cost of goods expenses from
the overpayments and “100% returns” transactions in the amount of
at least $7,088,337.
10. The falsely inflated cost of goods expenses claimed on
Automation’s 2000 U.S. Corporation Income Tax Return reduced the
reportable net income of Automation, which flowed through to
defendant HAAS’s 2000 Individual Income Tax Return so as to
fraudulently reduce defendant HAAS’s personal income tax
liability for the year 2000 in the amount of at least $2,891,190.
11. The creation of additional false expenses for
Automation by defendants HAAS and DUPUIS, and others known and
unknown to the grand jury, caused Automation’s 2001 U.S.
Corporation Income Tax Return to claim falsely inflated cost of
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goods expenses from the “100% return” transactions in the amount
of at least $5,215,000.
12. The falsely inflated cost of goods expenses claimed on
Automation’s 2001 U.S. Corporation Income Tax Return reduced the
reportable net income of Automation, which flowed through to
defendant HAAS’s 2001 Individual Income Tax Return so as to
fraudulently reduce defendant HAAS’s personal income tax
liability for the year 2001 in the amount of at least $2,114,332.
13. Defendant HAAS signed the false U.S. Federal Income Tax
Returns for Automation and for defendant HAAS for the years 2000
and 2001 and caused them to be filed with the Internal Revenue
Service.
III. OVERT ACTS
In furtherance of the conspiracy and to accomplish the
object of the conspiracy, defendants HAAS and DUPUIS, and others
known and unknown to the grand jury, committed the following
overt acts, among others, in Los Angeles and Ventura Counties,
within the Central District of California and elsewhere, on the
following dates:
Automation WIRE TRANSFER ($817,876)
1. On or about September 7, 2000, defendants HAAS and
DUPUIS caused an $817,876 wire transfer from Automation’s bank to
C. Aviation’s bank, which included an overpayment of $400,000 for
the purchase of an airplane.
2. On or about September 8, 2000, defendants HAAS and
DUPUIS caused C. Aviation to return the overpayment of $400,000
by issuing check #031165 to Automation.
3. On or about September 25, 2000, defendants HAAS and
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DUPUIS caused C. Aviation check #031165 to be deposited into a
bank account owned by defendant HAAS personally.
4. On or about October 10, 2000, defendants HAAS and DUPUIS
caused the amount of $817,876 to be booked as cost of goods
expense on Automation’s 2000 financial records.
Automation CHECK NUMBER 126740 ($2,790,000)
5. On or about September 12, 2000, defendants HAAS and
DUPUIS caused Automation check #126740 to be prepared in the
amount of $2,790,000 to C.C.M., of which $290,000 was the yearly
sponsorship for C.C.M.’s Nascar race team.
6. On or about September 12, 2000, defendant HAAS caused
his name to be stamped as an endorsement on Automation check
#126740.
7. On or about September 12, 2000, defendants HAAS and
DUPUIS caused C.C.M. to to return $2,500,000 by issuing C.C.M.
check #501 to Automation.
8. On or about September 25, 2000, defendants HAAS and
DUPUIS caused C.C.M. check #501 to be deposited into a bank
account owned by defendant HAAS personally.
9. On or about October 20, 2000, defendants HAAS and DUPUIS
caused the amount of $2,790,000 to be booked as cost of goods
expense on Automation’s 2000 financial records.
Automation WIRE TRANSFER ($2,750,000)
10. On or about October 31, 2000, defendants HAAS and
DUPUIS caused a $2,750,000 wire transfer from Automation’s bank
account to a bank account of C.T.C.
11. On or about November 2, 2000, defendants HAAS and
DUPUIS caused C.T.C. to wire $2,750,000 into CNC’s bank account.
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12. On or about November 9, 2000, defendants HAAS and
DUPUIS caused the amount of $2,750,000 to be booked as cost of
goods expense on Automation’s 2000 financial records.
Automation CHECK NUMBER 159587 ($1,000,837)
13. On or about October 6, 2000, defendants HAAS and DUPUIS
caused Automation check #159587 to be prepared in the amount of
$1,000,837 to Reis.Corp.
14. On or about October 6, 2000, defendant HAAS caused his
name to be stamped as an endorsement on Automation check #159587.
15. On or about October 17, 2000, defendants HAAS and
DUPUIS caused Mellon Bank to issue check #136245 to Reis.Corp. in
the amount of $1,686,160.00 in Swiss Francs ($963,520 in U.S.
dollars), for the purchase of a Grinding Machine.
16. On or about October 20, 2000, defendants HAAS and
DUPUIS caused the overpayment amount of $1,000,837 to be booked
as cost of goods expense on Automation’s 2000 financial records.
17. On or about November 6, 2000, defendants HAAS and
DUPUIS caused Reis.Corp. to return the overpayment amount of
$1,000,837 by issuing Reis.Corp. check #022705 to CNC.
18. On or about November 8, 2000, defendants HAAS and
DUPUIS caused Reis.Corp. check #022705 to be deposited into CNC’s
bank account.
Automation CHECK NUMBER 163602 ($875,000)
19. On or about October 6, 2000, defendants HAAS and DUPUIS
caused Automation check #163602 to be prepared in the amount of
$875,000 to T.Machinery which included an overpayment of
$437,500, for the purchase of a horizontal machining center.
20. On or about October 6, 2000, defendant HAAS signed
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Automation check #163602.
21. On or about November 16, 2000, defendants HAAS and
DUPUIS caused the amount of $875,000 to be booked as cost of
goods expense on Automation’s 2000 financial records.
22. On or about December 20, 2000, defendant HAAS and
DUPUIS caused T.Machinery to return the overpayment amount of
$437,500 by issuing T.Machinery check #085952 to Automation.
23. On or about December 27, 2000, defendants HAAS and
DUPUIS caused T.Machinery check #085952 to be deposited into
defendant HAAS’s personal trust bank account.
Automation CHECK NUMBER 187502 ($5,215,000)
24. On or about December 28, 2001, defendants HAAS and
DUPUIS caused Automation check #187502 to be prepared in the
amount of $5,215,000 to C.C.M.
25. On or about December 28, 2001, defendant HAAS caused
his name to be stamped as an endorsement on Automation check
#187502.
26. On or about December 28, 2001, defendants HAAS and
DUPUIS caused the amount of $5,215,000 to be booked as cost of
goods expense on Automation’s 2001 financial records.
27. On or about January 2, 2002, defendant HAAS and DUPUIS
caused C.C.M. to return $5,215,000 by issuing C.C.M. check #1209
to Haas CNC Racing, Inc.
28. On or about January 10, 2002, defendants HAAS and
DUPUIS caused C.C.M. check #1209 to be deposited into Haas CNC
RACING Inc.’s bank account.
Defendant HAAS’s Individual Tax Returns
29. On or about October 15, 2001, defendant HAAS signed and
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caused to be filed HAAS’s 2000 U.S. Individual Income Tax Return.
30. On or about October 14, 2002, defendant HAAS signed and
caused to be filed HAAS’s 2001 U.S. Individual Income Tax Return.
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COUNT FOUR
[26 U.S.C. § 7206(1)]
[DEFENDANT GENE FRANCIS HAAS]
On or about October 15, 2001, in Ventura County, within the
Central District of California, defendant GENE FRANCIS HAAS
(“HAAS”), did willfully make and subscribe to a U.S. Individual
Income Tax Return, Form 1040, for the taxable year 2000, which
was verified by written declaration that it was made under the
penalties of perjury, and caused such tax return to be filed with
the Internal Revenue Service, which defendant HAAS did not
believe to be true and correct as to every material matter
contained therein, in that the tax return reported Schedule E
Income (line item 17) of $10,859,306, whereas, as defendant HAAS
then well knew and believed, that the amount of Schedule E income
required to be reported on such return was substantially greater,
and that the amount reported on line item 17 had been
substantially reduced by bogus cost of goods expenses that
defendant HAAS had caused to be falsely claimed on the 2000 U.S.
Corporation Income Tax Return, Form 1120S, of Haas Automation,
Inc.
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COUNT FIVE
[26 U.S.C. § 7206(1)]
[DEFENDANT GENE FRANCIS HAAS]
On or about October 14, 2002, in Ventura County, within the
Central District of California, defendant GENE FRANCIS HAAS, did
willfully make and subscribe to a U.S. Individual Income Tax
Return, Form 1040, for the taxable year 2001, which was verified
by written declaration that it was made under the penalties of
perjury, and caused such tax return to be filed with the Internal
Revenue Service, which defendant HAAS did not believe to be true
and correct as to every material matter contained therein, in
that the tax return reported Schedule E income (line item 17) of
$7,718,584, whereas, as defendant HAAS then well knew and
believed, that the amount of reported Schedule E income required
to be reported on such return was substantially greater, and that
the amount reported on line item 17 had been substantially
reduced by bogus cost of goods expenses that defendant HAAS had
caused to be falsely claimed on the 2001 U.S. Corporation Income
Tax Return, Form 1120S, of Haas Automation, Inc.
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COUNTS SIX THROUGH NINE
[18 U.S.C. §§ 1343; 2]
[DEFENDANT ROBERT GENE CABLE]
I. THE SCHEME TO DEFRAUD BY WIRE COMMUNICATION
1. Beginning on or about February 21, 2001, and continuing
until approximately August 29, 2001, in Los Angeles County,
within the Central District of California and elsewhere,
defendant ROBERT GENE CABLE (“CABLE”) knowingly devised,
participated in, and executed a scheme to defraud Pendragon and
A.G., the owner and operator of Pendragon, as set forth in
paragraphs 2 through 13 below, by means of false and fraudulent
pretenses, representations, and promises, and the concealment of
material facts, knowingly caused to be transmitted certain
writings, signs, signals, pictures and sounds by means of wire
communication in interstate commerce, as described in paragraph
13 below.
2. The fraudulent scheme was carried out by defendant
CABLE in the following manner:
(a) Defendant CABLE, on behalf of Enmark, induced
Pendragon and A.G. to execute a Promissory Note (“Note”) for a
$300,000 loan by providing Pendragon and A.G. with financial
statements reflecting as revenue $25,708,480 Enmark received from
Automation in 2000 and 2001. In reality, however, defendant
CABLE well knew that approximately 98% of the $25,708,480 was
returned to defendant HAAS’s 100% owned C-corporation, CNC,
pursuant to the bogus invoice scheme, that such funds did not
represent actual revenues of Enmark, and that Enmark had little,
if any, actual revenue to repay the loan.
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3. To execute the above-described scheme, defendant CABLE
knowingly participated in and aided and abetted the following
materially false and misleading acts, among others, in the
Central District of California and elsewhere:
a. On or about an unknown date but on or about
February 21, 2001, defendant CABLE provided Pendragon and A.G.
with financial statements reflecting as revenue $25,708,480
Enmark received from Automation in 2000 and 2001 pursuant to the
bogus invoice scheme in order to induce Pendragon and A.G. to
enter into the loan agreement.
b. On or about February 21, 2001, defendant CABLE, on
behalf of Enmark, executed the Note for $300,000 with A.G., on
behalf of Pendragon. Pursuant to the Note, CABLE, on behalf of
Enmark, agreed to pay A.G., on behalf of Pendragon, twenty (20)
monthly payments of $15,000 plus interest, commencing on April
15, 2001.
c. On or about June 1, 2000, defendant CABLE, on
behalf of Enmark, entered into a Technical Services Agreement
(“TSA”) with A.G., on behalf of Pendragon. Pursuant to the TSA,
Pendragon agreed to provide Enmark with professional, technical
and craft personnel. In exchange, CABLE, on behalf of Enmark,
agreed to pay weekly invoices for the professional, technical and
craft personnel provided by Pendragon.
4. On or about April 15, 2001, defendant CABLE defaulted
on the Note and TSA.
5. On or about June 21, 2001, Pendragon filed a Complaint
in Los Angeles Superior Court, Case # PC 027810, against
defendant CABLE and Enmark to recover approximately $836,298 due
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and owing from CABLE and Enmark on the defaulted Note and TSA.
6. On or about June 22, 2001, Pendragon obtained a
temporary restraining order (“TRO”) against defendant CABLE and
Enmark. Pursuant to the TRO, defendant CABLE and Enmark were
restrained from, among other things, disposing of any of Enmark’s
accounts receivable without the written approval of A.G.
7. On or about June 26, 2001, defendant CABLE received
Automation check # 177456 for $998,000 made payable to Enmark
pursuant to the bogus invoice scheme.
8. On or about June 26, 2001, defendant CABLE sent a copy
of Automation check # 177456 for $998,000 made payable to Enmark
to A.G. via facsimile.
9. In June and July 2001, defendant CABLE sent
A.G. a series of e-mails requesting A.G.’s written approval for
Enmark to exchange an Enmark payment with defendant HAAS’s 100%
owned C-Corporation, CNC, for Automation check # 177456 for
$998,000 made payable to Enmark, which defendant CABLE sought to
do in order to continue Enmark’s participation in the bogus
invoice scheme. In one e-mail, defendant CABLE stated that if
A.G. would allow Enmark to continue exchanging Enmark checks with
CNC for Automation checks made payable to Enmark, pursuant to the
bogus invoice scheme through October 2001, defendant CABLE, on
behalf of Enmark, would be able to fully repay A.G. and Pendragon
the amounts owed to Pendragon on the defaulted Note and TSA.
However, when defendant CABLE made that representation to A.G.,
defendant CABLE well knew that he would not be able to repay such
amounts to A.G. and Pendragon by such time, even if A.G. allowed
Enmark to exchange such payments with CNC.
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10. In June and July 2001, A.G. sent a series of
reply e-mails to defendant CABLE repeatedly refusing defendant
CABLE’s e-mail requests to allow Enmark to exchange and Enmark
payment with CNC for Automation check # 177456 for $998,000 made
payable to Enmark. In addition, A.G. repeatedly told defendant
CABLE that Enmark was required to deposit Automation check
# 177456 into Enmark’s business bank account pursuant to the TRO,
and repeatedly requested defendant CABLE to do so. However,
despite these requests, defendant CABLE failed to deposit
Automation check #177456 into Enmark’s business bank account.
11. On or about August 24, 2001, Pendragon filed a
Complaint in Los Angeles Superior Court, Case # PC 28206, against
defendant CABLE, Enmark, Automation, defendant HAAS and CNC,
seeking, among other things, to recover approximately $836,298 on
the defaulted Note and TSA.
12. On or about August 29, 2001, defendant HAAS, on behalf
of himself, Automation, and CNC, signed a settlement agreement
with Pendragon in connection with the Complaint filed by
Pendragon in Los Angeles Superior Court, Case # PC 28206, against
Automation, defendant HAAS and CNC. Pursuant to that settlement
agreement, defendant HAAS, on behalf of himself, Automation, and
CNC, agreed to pay Pendragon $525,000 to settle the case. In
addition, in the settlement agreement Pendragon agreed to assign
its claims against defendant CABLE and Enmark on the defaulted
Note and TSA to defendant HAAS.
II. USE OF THE WIRES
13. On or about the dates set forth below, in the Central
District of California and elsewhere, defendant CABLE, for the
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purpose of executing the above described scheme to defraud and
attempting to do so, caused, and aided and abetted the
transmission of the following writings by means of wire
communications in interstate commerce, as described below:
COUNT DATE DESCRIPTION OF ITEM WIRED
SIX 6/25/01 E-mail from defendant CABLE to A.G.requesting A.G.’s approval to exchangean Enmark payment with defendant HAAS’s100% owned C-Corporation, CNC, forAutomation check #177456 for $998,000made payable to Enmark.
SEVEN 6/26/01 Facsimile of Automation check #177456for $998,000 made payable to Enmark sentto A.G.
EIGHT 6/29/01 E-mail from defendant CABLE to A.G. andMichael Perry, A.G.’s attorney,requesting approval to exchange anEnmark payment with CNC for Automationcheck # 177456 for $998,000 made payableto Enmark.
NINE 7/03/01 E-mail from defendant CABLE to A.G.requesting A.G.’s approval to allowdefendant CABLE to continue exchangingEnmark checks with CNC for Automationchecks made payable to Enmark throughOctober 2001 pursuant to the bogusinvoice scheme.
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COUNTS TEN AND ELEVEN
[18 U.S.C. § 1512(b)(3); 18 U.S.C. § 2]
[DEFENDANT GENE FRANCIS HAAS]
On or the dates set forth below, in Ventura County, within
the Central District of California and elsewhere, defendant GENE
FRANCIS HAAS (“HAAS”), with the intent to hinder, delay, and
prevent communication to a law enforcement officer of information
relating to the commission and possible commission of a federal
offense, knowingly used, attempted to use, and caused the use of
intimidation, threats, and corrupt persuasion, and engaged in,
and caused others to engage in, misleading conduct.
Specifically, both before and after the Internal Revenue Service
(“IRS”) executed court-ordered search warrants at defendant
HAAS’s businesses on April 10, 2003, defendant HAAS engaged in
the following acts of intimidation, corrupt persuasion, and
misleading conduct directed toward persons who had information
relevant to the IRS’s criminal investigation.
COUNT DATE ACT OF INTIMIDATION AND MISLEADING CONDUCT
TEN 5/10/01 Defendant HAAS stated to J.P. “don’t make mehurt you” after being informed that J.P. hadprovided information to federal authorities,and had been asked to provide furtherinformation relating to defendant HAAS’scommission and possible commission of afederal offense to federal authorities.
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COUNT DATE ACT OF INTIMIDATION AND MISLEADING CONDUCT
ELEVEN June 2003 Defendant HAAS directed C.T. to provide falsetestimony to the federal authorities relatingto the commission and possible commission ofa federal offense, while informing C.T. thatdefendant HAAS was letting J.P.’s “biker”friends know that J.P. was a governmentinformant while defendant HAAS stated to C.T.“I wish someone would kill him” in referenceto J.P.
A TRUE BILL
__________________________Foreperson
DEBRA WONG YANGUnited States Attorney
THOMAS P. O’BRIENAssistant United States AttorneyChief, Criminal Division
SANDRA R. BROWNAssistant United States AttorneyChief, Tax DivisionDARWIN THOMASAssistant United States AttorneyFRANK JERICHAssistant United States AttorneyTax Division