Haas Sentenced for Tax Fraud

Gene Francis Haas, the owner of an Oxnard machine-tool company, was sentenced to two years in prison for trying to avoid more than $34 million in income taxes by padding the books with false expenses.^[1]

Haas owns Haas Automation, Inc. which is believed to be the nation's largest computerized machine tool maker.^[2] He also is a noted philanthropist who donated hundreds of thousands of dollars to Ventura County colleges and nonprofits.^[3] He and four business associates were charged in connection with three separate tax fraud schemes that Haas engineered, according to the U.S. attorney's office.^[4]

Haas pleaded guilty in August to 11 federal charges and before sentencing had paid about $75 million in taxes, penalties and interest to settle the tax charges.^[5] The other defendants all pleaded guilty earlier and will be sentenced next year.^[6]

Prosecutors asserted that the tax fraud began in 2000 when Haas tried to recover nearly $9 million he had paid to settle a patent infringement lawsuit brought by a rival firm.^[7] The company's former financial officer reported the scheme to the FBI in 2001, leading to a year long investigation.^[8]

Attempt to evade or defeat tax is covered under 26 U.S.C. § 7201, wherein it states that any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.^[9]

Federal criminal defense attorney Douglas McNabb has also previously discussed the federal crime of tax fraud in his blog, here.

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^[1] AP Staff, SoCal man gets 2 years over $34 million tax fraud, Associated Press Newswire, November 6, 2007, available at LEXIS, News Library, Wire News Services File.
^[2] Id.
^[3] Id.
^[4] Id.
^[5] Id.
^[6] Id.
^[7] Id.
^[8] Id.
^[9] 26 U.S.C. § 7201(2007).