Former President of Office Equipment Company Indicted
Las Vegas, Nev. - The former president of a Nevada office machine company was indicted yesterday by the federal grand jury on 35 felony counts of Wire Fraud and Money Laundering, announced Daniel G. Bogden, United States Attorney for the District of Nevada.
GARY HAROUFF, age 41, of Las Vegas, is alleged to have devised a scheme to defraud the office machine company, Skipco, Inc., of millions of dollars in lease commissions by causing Skipco's financing company to divert the commissions to new companies incorporated and owned by HAROUFF. HAROUFF became the President of Skipco on November 1, 1996, and was responsible for managing the day-to-day operations. His parents owned the company prior to November 1, 1996, at which time it was purchased by TOPAC U.S.A., Inc., a subsidiary of Toshiba American Business Solutions, Inc.
In October 1996, knowing that Skipco would soon be purchased by TOPAC, HAROUFF allegedly instructed the financing company to start sending lease commissions to a new company he had formed. From November 1996 to October 2001, HAROUFF and a co-conspirator Lorren Stiles, Vice President of Skipco, caused the financing company to mail and wire transfer commissions to HAROUFF's company for the use and benefit of HAROUFF and Stiles. HAROUFF instructed sales personnel not to discuss the lease commissions with anyone other than himself and Stiles, and concealed them from the controller of Skipco and Deloitte and Touche, an accounting firm hired by TOPAC to audit the operations of Skipco. Over a five year period, HAROUFF allegedly caused more than $9,000,000 in lease commissions to be diverted to his newly-formed company, and negotiated more than $3,400,000 in checks for his personal benefit.
If convicted, HAROUFF is facing up to 20 years in prison and a $250,000 fine on the Wire Fraud counts and up to 10 years in prison and a $250,000 fine on the money laundering counts. If convicted, HAROUFF must also forfeit up to $2,875,754.70 in U.S. currency to the United States Government.
HAROUFF was summoned to appear in court for an initial appearance and arraignment on February 11, 2004, at 8:30 a.m.
Co-conspirator Lorren Stiles pleaded guilty to one count of Wire Fraud on January 8, 2004, and is scheduled to be sentenced by Chief U.S. District Judge Phillip Pro on February 25, 2005. Stiles admitted that he participated in a scheme to defraud Toshiba by not reporting the commission payments to the proper people.
The case is being investigated by Special Agents with the FBI and is being prosecuted by Assistant United States Attorney Brian Pugh.
The public is reminded that an indictment contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.