United States Attorney Benjamin B. Wagner
Eastern District of California
Superseding Indictment Adds Charges For Three Defendants Accused Of Defrauding The United Auburn Indian Community
|FOR IMMEDIATE RELEASE||
Thursday, April 11, 2013
SACRAMENTO, Calif. — A superseding indictment brought today by a federal grand jury added charges of filing false tax returns to an earlier indictment, United States Attorney Benjamin B. Wagner announced.
In August 2012, Bart Wayne Volen, 53, of San Diego and Haiku, Hawaii; Greg Scott Baker, 46, of Newcastle; and Darrell Patrick Hinz, 48, of Cameron Park, were charged with conspiring to commit mail and wire fraud and various money laundering charges as part of a scheme to defraud the United Auburn Indian Community (UAIC) of more than $18 million. Today’s superseding indictment alleges that in 2006 and 2007, Volen and Hinz filed false tax returns in connection with their fraud, and Baker filed false tax returns from 2006 through 2009.
According to court documents, between October 2006 and December 2007, Volen 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 – on UAIC-owned property on Indian Hills Road in Auburn. Volen 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. 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. Hinz paid for a $12,500 weekend trip he and Baker took in 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 maximum statutory penalty for each count of the tax violation is three years in prison, a $100,000 fine, or a fine of twice the value of the gross gain or loss from, and a one-year term of supervised release. Any sentence, however, would 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.