Accountant Sentenced for $4 Million Embezzlement Scheme
KANSAS CITY, Mo. – Tammy Dickinson, United States Attorney for the Western District of Missouri, announced that an Overland Park, Kan., accountant was sentenced in federal court today for an embezzlement scheme in which he stole more than $4 million from his firm’s clients and purchased dozens of luxury vehicles.
Thomas Hauk, 42, of Overland Park, was sentenced by U.S. District Judge Howard F. Sachs to 9 years in federal prison without parole. The court also ordered Hauk to pay $4,157,306 in restitution to his victims.
On Dec. 22, 2015, Hauk pleaded guilty to five counts of bank fraud, two counts of wire fraud, five counts of counterfeit securities and four counts of money laundering.
Hauk was employed as an accountant at Assured Management Company from approximately 2005 to July 2015. He voluntarily resigned in 2015 to begin employment at a new financial management company, JIM Management, with one of the victims of his fraud scheme. JIM quickly dissolved when the underlying investigation related to Hauk’s embezzlement at Assured Management began to unfold in July 2015.
Between 2006 and July 2015, Hauk engaged in several schemes to defraud Assured Management clients by embezzling funds from their accounts. The purpose of each scheme was to steal money for Hauk’s own financial use and personal gain to pay living expenses during two marriages and divorces, to send money to a paramour, and to purchase valuable items and motor vehicles, including the purchase of high-dollar vehicles, trailers, jewelry and motorcycles.
For example, Hauk purchased a 2006 Ford GT for $223,249, a 2009 Ferrari for $205,953 and a 2014 Ducati motorcycle for $64,160. Hauk stored the vehicles and motorcycles in three storage units he purchased in Kansas City, Mo., for $163,500.
Hauk defrauded five victims by embezzling funds from their accounts held at Assured Management. Hauk stole the identity of a sixth victim by using his signature stamp to endorse fraudulent checks.
While Hauk’s financial fraud scheme began at least in 2006, the amount of money taken by Hauk during the embezzlement accelerated during the last two to three years before the financial fraud scheme was uncovered in July 2015. During that time, Hauk used embezzlement proceeds to make at least 66 complex automobile and motorcycle purchases.
In a separate civil proceeding, the government has seized 33 luxury cars, high-end motorcyles and other vehicles still in Hauk’s possession, which he had purchased for a total of $1,651,146. Hauk bought and traded expensive vehicles on a continuing basis until discovery of his fraud in July 2015. He used proceeds stolen from Assured Management clients, laundering the funds through companies he created, making down payments, paying existing liens, making regular large monthly payments and purchasing vehicles outright. Hauk provided significant false information to qualify for large car loans. Hauk routinely represented himself as a Certified Public Accountant (CPA), which he is not, and falsely represented his legitimate income in excess of $300,000 to $400,000 per year.
Hauk used his ill-gotten gains to support a lavish lifestyle for himself, including expensive cars, jewelry, credit card bills and vacations. During a five-year period, Hauk spent approximately $1,207,639 using three credit cards to purchase such items as:
• $30,500 at Hannoush Jewelry on a 2.5 karat diamond ring,
• $2,400 at Alexander McQueen on a handbag,
• $4,725 at Hannoush Jewelry on a 1887 Carrera bracelet,
• $6,458 at Hannoush Jewelry on a Tag Heuer Carrera watch,
• $4,464 at Hannoush Jewelry on another Carrera 1887 bracelet,
• $8,000 at Custom Wheels related to vehicle accessories,
• $10,123 at Reno’s Powersports related to motorcycles and vehicle accessories,
• $24,555 on insurance related expenses,
• $5,078 at KC Trends related to vehicle accessories,
• $3,107 at B&H Photo Video,
• $3,900 at Sline Motorsports related to vehicle accessories,
• $9,700 on Paypal transactions,
• $8,819 on airline related expenses,
• $6,468 on hotel related expenses,
• $3,792 at Bikesource, and
• $5,436 on Apple products and services.
Hauk perpetrated an “On-the-Books” fraud scheme. The perpetrator of an “On-the-Books” scheme attempts to balance debits and credits in the accounting system to obfuscate transactions and avoid detection. Hauk stole money through a variety of methods and created false accounting entries in Assured Management’s accounting system. Hauk deposited checks from the victims into his business accounts and then wrote checks and cashier’s checks from his companies to his personal accounts and his trust.
Since pleading guilty, Hauk has charged excessive debt to credit cards and made the minimum monthly payment, including a vacation in Hawaii. With imminent incarceration and a significant restitution judgment, Hauk incurred this debt with no means to repay.
During the course of their investigation, according to court records, FBI agents discovered Hauk entered into a settlement agreement with a former client to avoid criminal charges while he was employed at a firm in Indiana in 2003. A client hired him to provide bookkeeping and tax services for her business. Hauk forged her husband’s name on multiple checks, and ultimately deposited the checks into Hauk’s personal account. When confronted with the embezzlement, Hauk agreed to pay back the stolen money, in addition to legal fees, bank fees, and accounting fees. The total amount Hauk paid back was $70,720. The former client also reported Hauk contacted her later to apologize for his actions and thanked her for not filing criminal charges against him.
In addition, according to court documents, an individual in Indiana loaned Hauk $70,000 about 12 years ago. Hauk told this individual he needed a $70,000 loan to complete the construction of his home. After loaning Hauk $70,000, the individual learned Hauk was caught stealing from an employer and needed the money to get out of trouble. He confronted Hauk and was able to recover all but about $8,000 of the loan.
The United States Marshals Service held a live auction in Kansas City on April 28, 2016, and sold 22 of the high value cars and motorcycles, including a 2006 Ford GT for $285,000, a 2009 Ferrari for $218,000 and a 2008 Ducati Desmosedici for $47,500. The remaining vehicles and motorcycles were sold in online auctions. The United States Marshals Service has also sold the three condo garages which housed many of the luxury vehicles. Net proceeds of sale are currently over $1,720,000. Additionally, the United States Marshals Service will sell the seized jewelry in an online auction. Once all assets have been liquidated, the United States Attorney’s Office will initiate restoration, which is the Department of Justice‘s process to repatriate proceeds of forfeited assets to crime victims for restitution.
This case was prosecuted by Assistant U.S. Attorney Jane Pansing Brown; Assistant U.S. Attorneys Curt Bohling and Stacey Perkins Rock are responsible for the civil proceedings. It was investigated by the FBI.