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Justice News

Department of Justice
U.S. Attorney’s Office
Eastern District of California

FOR IMMEDIATE RELEASE
Thursday, June 16, 2016

Cameron Park Man Sentenced to over 8 Years in Prison for Defrauding the United Auburn Indian Community

SACRAMENTO, Calif. — Darrell Patrick Hinz, 51, of Cameron Park, was sentenced today by United States District Judge Troy L. Nunley to eight years and one month in prison and ordered to pay $18,830,000 in restitution for defrauding the United Auburn Indian Community (UAIC), conspiring to launder monetary instruments, and filing false tax returns, Acting United States Attorney Phillip A. Talbert announced.

According to court documents, between October 2006 and December 2007, Hinz, together with Gregory Scott Baker, of Newcastle, and Bart Wayne Volen, of San Diego, engaged in a scheme to defraud the UAIC of over $18 million.

“The role of IRS Criminal Investigation becomes even more important in embezzlement and fraud cases due to the complex financial transactions that can take time to unravel,” said Michael T. Batdorf, Special Agent in Charge, IRS Criminal Investigation. “Darrell Patrick Hinz and his co-defendants created a scheme to defraud the UAIC in over $18 million in proceeds and purchased numerous high valued assets for himself and other co-defendants totaling over $1.4 million. Hinz also failed to report his ill-gotten gains on his federal tax returns. This sentence should serve as a deterrent to those who might contemplate similar fraudulent actions.”

According to court documents, in October 2006, the UAIC hired Volen, a developer, to finish construction on a school, a community center, and administrative offices on UAIC‑owned property on Indian Hills Road in Auburn. Baker was the UAIC tribal administrator whose duties included overseeing the Indian Hills office project. In this position of trust, he was subordinate only to the UAIC tribal council. Hinz was a contract employee hired by the UAIC to manage the 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 completed work.

In carrying out the scheme, Volen submitted false and inflated invoices to the UAIC, and Hinz and Baker approved the fraudulent invoices based on a kickback agreement between the three men. Both Hinz and Baker engaged in conduct to ensure that the tribal council would pay for the inflated and fraudulent invoices submitted by Volen. They were later paid by Volen for their participation in the scheme.

According to court documents, Hinz, Baker, and Volen called themselves the “A-Team.” As a member of the A-Team, Hinz surreptitiously funneled over $1.4 million in fraud proceeds to Baker for his assistance in the scheme. Hinz also purchased a number of things for Baker, including personal property (such as a $70,000 BMW and a mobile home), seven investment homes, a vacation condominium in South Lake Tahoe, and a $54,000 pool at Baker’s primary residence. All of these transactions were conducted for the purpose of concealing the proceeds from the UAIC fraud.

With regard to the tax offense, Hinz failed to report the income he derived from the scheme. As a result, the United States suffered a tax loss of $830,000.

When imposing the sentence in this case, Judge Nunley stated that Hinz was part of “a massive fraud” that was committed by people that the UAIC trusted. The judge noted that the UAIC had taken in Hinz “as a member of their family” and that, through his actions and those of his co-conspirators, “the UAIC was taken advantage of.”

This case is the product of an investigation by the Internal Revenue Service, Criminal Investigation. Assistant United States Attorneys Michael M. Beckwith, John K. Vincent, and Kevin C. Khasigian are prosecuting the case.

Baker and Volen previously pleaded guilty to similar charges in this case. On May 26, 2016, Baker was sentenced to more than five years in prison and ordered to pay restitution. Volen is scheduled to be sentenced on August 4, 2016. Chris W. Eatough previously pleaded guilty to a felony related to this case on June 20, 2013 (case number 2:13-cr-214 TLN). Eatough is scheduled to be sentenced on July 28, 2016.

Topic(s): 
Financial Fraud
Press Release Number: 
2:12-cr-294-TLN
Updated June 16, 2016