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Press Release

Austin Businessman Sentenced to Federal Prison for Mail Fraud, Wire Fraud, Money Laundering, and False Tax Returns

For Immediate Release
U.S. Attorney's Office, Western District of Texas

In Austin today, 49-year-old Sean James Hager was sentenced to 42 months in federal prison and ordered to pay more than $1,500,000 in restitution in connection with a scheme to defraud his employer and the Internal Revenue Service, announced United States Attorney Richard L. Durbin, Jr. and Internal Revenue Service-Criminal Investigation (IRS-CI) Special Agent in Charge William Cotter. 

On May 26, 2016, a federal jury found Hager guilty of three counts of assisting the preparation of false tax returns, two counts of mail fraud, two counts of wire fraud, and one count of money laundering.  Evidence presented during trial revealed that, during 2008-2011, Hager was employed by Austin-based Velocity Electronics, where he was responsible for purchasing computer parts for resale to Dell.  Unbeknownst to Velocity, Hager also operated Echt Electronics, a company through which Hager acquired computer parts and sold them to Velocity at a significant mark up.  Evidence presented at trial showed that Hager earned more than $1 million in profits from Echt during 2008-2011.  Evidence presented at trial also established that Hager failed to disclose to his tax return preparer the profit he earned through Echt.  As a result, Hager’s income tax returns substantially understated his income and the amount of income tax he owed.

Today, United States District Judge Lee Yeakel sentenced Hager to 42 months in prison on each of the mail fraud, wire fraud, and money laundering counts, and 36 months in prison (the statutory maximum) on each of the three tax counts.  All of the terms of imprisonment will run concurrently.  Judge Yeakel also imposed a one-year term of supervised release on each of the tax counts, and a three-year term of supervised release on each of the other counts, with all of the terms of supervised release to begin upon Hager’s release from prison and run concurrently.

Judge Yeakel also ordered Hager to pay restitution of $1,164,161.92 to Velocity Electronics and restitution of $368,611.33 to the IRS.

“The sum of all parts on Sean Hager’s theft from his employer and cheating on his taxes is simple – guilty on all counts,” said William Cotter, IRS Criminal Investigation Special Agent in Charge. “Taxpayers deserve our vigilance in the investigation and prosecution of those who hide income and evade the payment of their fair share of taxes.”

This case was investigated by IRS-CI.  Assistant United States Attorneys Elizabeth Cottingham, Alan Buie, and Daniel Castillo prosecuted this case on behalf of the Government.

Updated October 25, 2016