United States Attorney Benjamin B. Wagner
Eastern District of California
Three charged with Defrauding The United Auburn Indian Community Of More Than $18 Million
|FOR IMMEDIATE RELEASE||
Friday, August 17, 2012
Docket #: 2:12-cr-294-MCE
SACRAMENTO, Calif. — A federal indictment charging three men in a conspiracy to defraud the United Auburn Indian Community was made public today, United States Attorney Benjamin B. Wagner announced.
On August 9, 2012, a federal grand jury indicted Bart Wayne Volen, 53, of San Diego, and Haiku, Hawaii; Greg Scott Baker, 45, of Newcastle, Calif.; and Darrell Patrick Hinz, 47, of Cameron Park, Calif., charging them with conspiring to commit mail and wire fraud and various money laundering charges.
Defendant Volen was arrested today by IRS special agents at San Francisco International Airport. All three defendants are expected to make their initial appearances in federal court on Monday.
Before bringing this indictment, the U.S. Attorney’s office filed civil complaints in March 2012, seeking to forfeit twenty properties in the counties of El Dorado, Glenn, Placer, Sacramento, and San Diego, and one property in the county of Maui, Hawaii, alleging the properties were purchased with funds traceable to the fraud or funds involved in money laundering transactions. In June, 2012, the U.S. Attorney’s office filed additional civil complaints seeking to forfeit a 2010 Mercedes-Benz, a mobile home in Newcastle, California, various investment shares, a $2.4-million promissory note, ownership interests in an existing business, and over $170,000 in cash, on grounds that the assets were purchased with funds related to the fraud or involved in money laundering transactions.
According to court documents, between October 2006 and December 2007, Volen allegedly executed a scheme to defraud the United Auburn Indian Community. In October 2006, the UAIC hired Volen, a developer, to finish construction on four tribal buildings – a school, a community center, and administrative offices – located on UAIC-owned property on Indian Hills Road in Auburn. Volen allegedly submitted false and inflated invoices to the UAIC. He supported his invoices with inflated cost proposals from his general contractor’s company, SPB, and, at times, inflated invoices from various subcontractors. At Volen’s direction, over 160 SPB cost proposals were fraudulently inflated. Volen’s work on the Indian Hills Office Project began in late 2006 and ended in early 2008.
Baker and Hinz were both UAIC employees. Baker was the UAIC tribal administrator. His duties included overseeing the Indian Hills Office Project. Hinz was a contract employee hired by the UAIC to manage quality control and construction at the Indian Hills Office Project site. Both Baker and Hinz were required to approve all invoices before the UAIC tribal council would sign checks to pay for work done on the Indian Hills Office Project. The indictment alleges that during the scheme to defraud the tribe, both Baker and Hinz engaged in conduct to insure that the tribal council would pay for the inflated and fraudulent invoices submitted by Volen. They were both aware of what Volen was doing and were both later paid by Volen for their participation in the scheme. The government alleges that Volen, Baker, and Hinz allegedly ultimately stole more than $18 million from the UAIC.
According to the indictment, in order to disguise the proceeds of the fraud, Hinz sent a number of fraudulent invoices to Volen for consulting work he claimed he did for Volen, and Volen sent Hinz 29 checks, totaling approximately $7.5 million in response. According to court documents, Hinz paid Baker indirectly for his assistance in the scheme, using money he received from Volen. The indictment alleges that Hinz paid for a trip to Hawaii and certain obligations owed by Baker. Hinz also purchased a number of things for Baker, including various assets, personal property — a $70,000 BMW and a mobile home — several investment properties and a vacation condominium in Lake Tahoe, and improvements to property, such as a $54,000 pool at his primary residence. All of these transactions were conducted for the purpose of concealing and disguising the proceeds from the UAIC fraud. During the course of the scheme, Baker received over $1.4 million.
This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorney Michael M. Beckwith is prosecuting the case.
If convicted, the defendants face a maximum sentence of 20 years in prison, a $250,000 fine, and a three-year term of supervised release for each count of mail and wire fraud. The maximum statutory penalty for money laundering is 20 years in prison, a $500,000 fine or twice the value of the laundered money, and a three-year term of supervised release for each count. The actual sentence, if convicted, will be determined at the discretion of the court after consideration of any applicable statutory sentencing factors and the Federal Sentencing Guidelines, which take into account a number of variables.
The charges are only allegations and the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.