Financial Fraud: Group Of Persons Pleads Guilty To Conspiracy To Commit Wire Fraud And Filing a False Tax Return



Financial Fraud
4TH Florida Man Pleads Guilty In Connection To Multi-Million Dollar Fraud Against Xerox Corporation

4TH Florida Man Pleads Guilty In Connection To Multi-Million Dollar Fraud Against Xerox Corporation

ROCHESTER, N.Y. - U.S. Attorney James P. Kennedy, Jr. announced that Jason Haynes, of Florida, pleaded guilty before U.S. District Judge Elizabeth A. Wolford to conspiracy to commit wire fraud and filing a false tax return in connection with a scheme to defraud the Xerox Corporation of more than $20,000,000. The charges carry a maximum penalty of 20 years in prison and a $250,000 fine.

Assistant U.S. Attorney Richard A. Resnick, who is handling the case, stated that the defendant, along with Kyle Haynes, David Haynes and Bryan Day, owns Haynes Brother Furniture in Daytona Beach, Florida, where defendant resides. Co-conspirator Robert Fisher’s company, RBM Imaging, was an authorized reseller of Xerox office equipment.

Xerox, which has a location in Webster, NY, sells and leases office equipment, including printers. Xerox sells or leases the office equipment directly to end-user customers or to authorized resellers, like Fisher, who then resell or lease the office equipment to end-user customers, like the defendants. The office equipment requires toner and other products to operate. End-user customers order the toner for their printers from Xerox. Rather than pay Xerox upfront for the toner, the end-user customers pay Xerox based on the number of prints made with the toner. However, at all times, the toner belongs to Xerox until consumed by the end-user customers. At no time may the end-user customers sell the toner.

The Haynes’ set up a sham company, HDH Graphics, to obtain approximately 63 Xerox printers from Fisher. Although HDH Graphics made few, if any, prints with the printers, the defendants fraudulently represented to Xerox that HDH Graphics was making prints using much more toner than the industry average, which deceived Xerox into shipping approximately $25,000,000 worth of toner to HDH Graphics. The Haynes’ then sold the fraudulently obtained toner for approximately $11,000,000 to an individual in Miami, Florida. The Haynes’ and Fisher shared the profits from the fraudulent sale of the Xerox toner.

In executing the scheme, the Haynes’ repeatedly misrepresented to Xerox that they were making millions of prints with the toner, even though they never took most of the printers out of their boxes. The Haynes’ provided Xerox with false usage profiles from the printers and false print samples that made it appear that the defendants were making the millions of prints and using much more toner than the industry average for each print.

Jason Haynes also filed false personal income tax returns with the Internal Revenue Service for the years 2008 through 2013. His personal tax returns failed to report net income HDH Graphics earned from the fraudulent sale of the Xerox toner. Because HDH Graphics was a partnership, all of its net income flowed through to the Haynes’ personal tax returns. Therefore, the underreporting of the net income on HDH Graphics tax returns resulted in the underreporting of the income on the defendant’s personal tax returns.

The Haynes’ underreported the net income earned by HDH Graphics by falsely claiming that they had personally paid and incurred travel and shipping expenses on behalf of HDH Graphics. They then had HDH Graphics reimburse them for the falsely claimed expenses and falsely reported such expenses as deductions on HDH Graphics tax returns. The falsely reported deductions on HDH Graphics tax returns were approximately $265,154, resulting in approximately $265,154 less in net income being reported on the corporate returns. As a result, approximately $66,288.50 should have flowed through as income to the defendant’s personal tax returns.

The defendant also agreed to forfeiture of assets that were previously seized by the government.

Kyle Haynes, David Haynes, and Bryan Day were previously convicted and are awaiting sentencing. Charges remain pending against Robert Fisher. The fact that a defendant has been charged with a crime is merely an accusation and the defendant is presumed innocent until and unless proven guilty.

The plea is the result of an investigation by Immigration and Customs Enforcement, Homeland Security Investigation, Buffalo Office, under the direction of Special Agent-in-Charge Kevin Kelly, and the Internal Revenue Service, Criminal Investigation Division, under the direction of James Robnett, Special Agent-in-Charge, New York Field Office.

Sentencing is scheduled for March 13, 2019, at 2:00 p.m. before Judge Wolford.

Original PressReleases...



FraudsWatch
About FraudsWatch 1369 Articles
You’ve been defrauded? FraudsWatch.com tries to help as to denounce embezzlement, theft or if your identity has been compromised. I put at your disposal example, guide and guidance about fraud, scams and identity theft.

Be the first to comment

Leave a Reply

Your email address will not be published.


*


This site uses Akismet to reduce spam. Learn how your comment data is processed.