The owner of the nation's largest computerized machine-tool maker was arrested at his Camarillo (Ventura County) home Monday and charged with orchestrating a tax fraud that cost the government nearly $20 million as well as intimidating witnesses and a federal agent investigating the case, as reported by the New York Times.
Gene Haas, the owner of Haas Automation and other companies, was accused in a 52-page indictment of running a bogus invoicing scheme to create fake deductions. Haas, 54, was ordered held without bail after his arraignment in U.S. District Court in Los Angeles.
Justice Department lawyers said they feared Haas might try to flee to China, where he has business interests.
Haas Automation, in a statement, said that Haas is not guilty and that the tax issues "revolve around" the company's former chief financial officer, John Phillips. It said the indictment would have no effect on the business.
Last month, Haas Automation won, by default, a lawsuit filed in Ventura County Superior Court accusing Phillips of cheating the company out of $27.5 million.
The transactions described in that lawsuit are among those listed in the federal indictment, Peter Zierhut, the company spokesman, confirmed.
Phillips, identified only by his initials in the indictment, went to the FBI in April 2001 and told them that he had been ordered by Haas eight months earlier to cheat the government out of more than $8.9 million in taxes, the Justice Department said. Phillips is an unindicted co-conspirator.
The indictment identified Charles Todd of Minden, Nev., as the owner of a nonexistent company, Supermill, doing business as American Putter, that was paid $12 million for sham purchase orders and then funneled 98% of that back to Haas. Todd appeared in Federal District Court in Los Angeles Monday and agreed to plead guilty to two tax evasion charges, the Justice Department said.
Another man, Kenneth Greene, also agreed Monday to plead guilty over his role in aiding the tax fraud.
Denis Dupuis, 51, a former general manager of Haas Automation, and Robert Cable, 73, a former salesman for the firm, were indicted, accused of helping fabricate the tax deductions. They were paid about 2% of the $23 million in face value of the sham invoices, the indictment said.
The other 98% of the money was funneled back to Haas, according to the indictment. It said Haas cheated the government out of $12.5 million on his personal tax returns and $7.7 million on Haas Automation's returns in 2000 and 2001.