UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION. No. CR

Transcription

1 DEBRA WONG YANG United States Attorney SANDRA R. BROWN Assistant United States Attorney Chief, Tax Division (Cal. State Bar # ) 00 North Los Angeles Street Federal Building, Room 1 Los Angeles, California 00 Telephone: () - Facsimile: () sandra.brown@usdoj.gov Attorneys for Plaintiff UNITED STATES OF AMERICA UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA UNITED STATES OF AMERICA, ) ) Plaintiff, ) ) v. ) ) WESTERN DIVISION No. CR PLEA AGREEMENT FOR DEFENDANT CHARLES W. TODD CHARLES W. TODD, ) ) Defendant. ) ) [UNDER SEAL] 1. This constitutes the plea agreement between CHARLES W. TODD ("defendant") and the United States Attorney's Office for the Central District of California ("the USAO") in the abovecaptioned case. This agreement is limited to the USAO and cannot bind any other federal, state or local prosecuting, administrative or regulatory authorities. PLEA. Defendant gives up the right to indictment by a grand jury and agrees to plead guilty to a one-count information charging a violation of U.S.C. Section 1 for the tax year 00, in the form attached to this agreement or a substantially

2 similar form. NATURE OF THE OFFENSE. In order for defendant to be guilty of a violation of Title, United States Code, Section 1, the following must be true: (1) Supermill, Inc., a corporation wholly owned and operated by defendant, owed federal corporate income tax for the calendar year 00; () defendant knew that Supermill, Inc. owed federal income tax for the calendar year 00; () defendant made an affirmative attempt to evade or defeat the assessment of such corporate income tax against Supermill, Inc.; and, () in attempting to evade or defeat the assessment of such tax, defendant acted willfully. Defendant admits that defendant is, in fact, guilty of this offense as described in Count One of the information. PENALTIES AND RESTITUTION. The statutory maximum sentence that the Court can impose for the violation of Title, United States Code, Section 1 is: five years imprisonment; a three-year period of supervised release; a fine of $0,000 or twice the amount of gross gain or gross loss resulting from the offense; and a mandatory special assessment of $0.. Defendant understands that the Court may order defendant to cause Supermill, Inc., to pay any additional taxes, interest and penalties that the corporation owes to the United States as a result of defendant s violation of Title, United States Code, Section 1. Also, the Court must order defendant to pay the costs of prosecution, which may be in addition to the statutory maximum fine stated above.

3 . Defendant also understands that, by pleading guilty, defendant may be giving up valuable government benefits and valuable civic rights, such as the right to vote, the right to possess a firearm, the right to hold office, and the right to serve on a jury. Defendant further understands the conviction in this case may subject defendant to various collateral consequences, including but not limited to, deportation, revocation of probation, parole, or supervised release in another case, and suspension or revocation of a professional license. Defendant understands that unanticipated collateral consequences will not serve as grounds to withdraw defendant s plea of guilty.. Defendant agrees to make full restitution for the losses caused by defendant s activities. Defendant agrees that, in return for the USAO s compliance with its obligations under this agreement, the amount of restitution is not restricted to the amount alleged in the count to which defendant is pleading guilty and may include losses arising from charges not prosecuted pursuant to this agreement as well as all relevant conduct in connection with those charges. The parties stipulate that the amount of loss is $,, which the parties agree is the appropriate determination of the tax loss for criminal sentencing purposes, but is not binding for civil purposes and is exclusive of civil penalties and interest. Defendant further agrees that defendant will not seek the discharge of any restitution obligation, in whole or in part, in any present or future bankruptcy proceeding.. The Court may order defendant to pay any additional fines that defendant owes to the United States. Also, the Court

4 shall order defendant to pay the costs of prosecution, which may be in addition to the statutory maximum fine stated above.. Supervised release is a period of time following imprisonment during which defendant will be subject to various restrictions and requirements. Defendant understands that if defendant violates one or more of the conditions of any supervised release imposed, defendant may be returned to prison for all or part of the term of supervised release, which could result in defendant serving a total term of imprisonment greater than the statutory maximum stated above. FACTUAL BASIS. Defendant and the USAO agree and stipulate to the following statement of facts provided below. The statement of facts includes facts sufficient to support a plea of guilty to the charge described in this plea agreement. It is not meant to be a complete recitation of all facts relevant to the underlying criminal conduct or all facts known to defendant that relate to that conduct.. Defendant, a resident of Minden, Nevada, admits that between 00 and 01, within the Central District of California: a) Defendant, as President and sole stockholder, operated Supermill, Inc. (Supermill), also doing business as American Putter, which was located in Carson City, Nevada. b) Defendant failed to file timely U.S. Corporation Income Tax Returns for Supermill for the years 00 and 01. c) During the years 00 and 01, defendant, on behalf of Supermill, entered into a false invoicing and payment scheme with at least the following employees of Haas Automation,

5 Inc., an S-corporation, solely owned by Gene Haas: 1) Gene Haas ) Denis Dupuis d) During the years 00 and 01, the false invoice and payment scheme was operated in the following manner: 1) At Gene Haas direction Haas Automation, Inc. would send Supermill a sham purchase order for parts similar to those that Supermill had previously produced for Haas Automation, Inc. ) Defendant would receive a check, payable to Supermill, via UPS or FedEx next day air from Haas Automation, Inc. ) Defendant would deposit these Haas Automation, Inc., checks into a Bank of America bank account in the name of Supermill. ) As directed by Gene Haas and others, defendant would then write a Supermill check to either CNC Associates (an entity controlled by Gene Haas) or Gene Haas for % of the amount of the check deposited and cause such check to be delivered to an employee of Haas Automation, Inc. ) As directed by Gene Haas and others, defendant would create a Supermill invoice in the amount of the check received from Haas Automation based upon parts listed on the sham purchase order. ) In total, at least $,, worth of such sham transactions occurred between Supermill and

6 Haas Automation throughout 00 and 01. e) Defendant, with regard to the income Supermill received during the calendar years 00 and 01, knowingly and willfully caused Supermill to fail to report such income to the Internal Revenue Service in the following manner: 1) Defendant deposited the checks received from Haas Automation, Inc. which he knew constituted, at least in part, taxable income to Supermill into a bank account under the name of Supermill which defendant maintained and controlled. ) Defendant caused Supermill to fail to file any U.S. Corporation Income Tax Returns for the years 00 and 01, as required by law, even though defendant knew that Supermill was legally required to file such returns. f) During the years 00 and 01, defendant caused Supermill to fail to report at least the following amounts of gross income to the Internal Revenue Service: 00: $,0,1 01: $,0,0 g) Taking into account certain costs, expenses, and other deductions, defendant knowingly and willfully attempted to evade Supermill s tax liabilities for 00 and 01 in at least the following amounts, exclusive of any penalties and interest: 00: $, 01: $ 1, Minimum Total Tax Loss: $, ///

7 WAIVER OF CONSTITUTIONAL RIGHTS. By pleading guilty, defendant gives up the following rights: a) The right to persist in a plea of not guilty. b) The right to a speedy and public trial by jury. c) The right to the assistance of counsel at trial, including, if defendant could not afford an attorney, the right to have the Court appoint one for defendant. In this regard, the defendant understands that, despite his plea of guilty, he retains the right to be represented by counsel at every other stage of the proceeding. d) The right to be presumed innocent and to have the burden of proof placed on the government to prove defendant guilty beyond a reasonable doubt. e) The right to confront and cross-examine witnesses against defendant. f) The right, if defendant wished, to testify on defendant's own behalf and present evidence in opposition to the charges, including the right to call witnesses and to subpoena those witnesses to testify. g) The right not to be compelled to testify, and, if defendant chose not to testify or present evidence, to have that choice not be used against defendant. By pleading guilty, defendant also gives up any and all rights to pursue any affirmative defenses, Fourth Amendment or Fifth Amendment claims, and other pretrial motions that have been filed or could be filed. ///

8 SENTENCING FACTORS. Defendant understands that the Court is required to consider the United States Sentencing Guidelines ( U.S.S.G. or Sentencing Guidelines ), among other factors in determining defendant s sentence. Defendant understands, however, that the Sentencing Guidelines are only advisory, and that after considering the Sentencing Guidelines, the Court may be free to exercise its discretion to impose any reasonable sentence up to the maximum set by statutes for the crimes of conviction.. Defendant and the USAO agree and stipulate to the following applicable sentencing guideline factors: Base Offense Level : [U.S.S.G. T1.1, Tax Loss $, [U.S.S.G. T.1 (Tax Table)] Specific Offense Characteristics Sophisticated Means : [U.S.S.G. T1.1(b)()] Downward Departure: Acceptance of Responsibility : () [U.S.S.G. E1.1] The USAO will agree to a downward adjustment for acceptance of responsibility (and, if applicable, move for an additional level under E1.1(b)) only if the conditions set forth in paragraph are met. Additionally, defendant and the USAO agree not to seek, argue, or suggest, either orally or in writing, that any other specific offense characteristics, adjustments or departures (with the exception of consideration of an adjustment or departure for obstruction), from either the applicable Offense Level or Criminal History Category, be imposed. Defendant understands that defendant s base offense level could be

9 increased if defendant is a career offender under USSG] Sections B1.1 and B1.. In the event that defendant s offense level is so altered, the parties are not bound by the base offense (or adjusted offense) level stipulated to above.. There is no agreement as to defendant's criminal history or criminal history category.. The stipulations in this agreement do not bind either the United States Probation Office or the Court. The Court will determine the facts and calculations relevant to sentencing. Both defendant and the USAO are free to: (a) supplement the facts stipulated to in this agreement by supplying relevant information to the United States Probation Office and the Court, (b) correct any and all factual misstatements relating to the calculation of the sentence, and (c) argue on appeal and collateral review that the Court's sentencing calculations are not error, although each party agrees to maintain its view that the calculations in paragraph are consistent with the facts of this case.. Defendant understands that if the Court finds facts or reaches conclusions different from those in any stipulation contained in this agreement, defendant cannot, for that reason alone, withdraw defendant s guilty plea. DEFENDANT'S OBLIGATIONS. Defendant agrees: a) To plead guilty as set forth in this agreement. b) To abide by all sentencing stipulations contained in this agreement. c) To appear as ordered for all court appearances, to

10 surrender as ordered for service of sentence, to obey all conditions of any bond, and to obey all other court orders. d) Not to commit any crime. e) To be truthful at all times with Pretrial Services, the U.S. Probation Office, and the Court. f) To pay the applicable special assessment at or before the time of sentencing unless defendant lacks the ability to pay. PAYMENT OF TAXES OWED. Defendant admits that Supermill, Inc. received at least $,0,1 of unreported income for calendar year 00. Defendant agrees to cooperate with the IRS in the determination of Supermill, Inc. s tax liability for calendar year 00. Defendant agrees: a) That defendant shall cause Supermill to file, prior to the time of sentencing, a U.S. Corporation Income Tax Return for calendar year 00 subject to the above admissions, correctly reporting previously unreported income and that he shall, if requested to do so by the Internal Revenue Service, cause Supermill to provide the Internal Revenue Service with information regarding the tax year covered by the corporate tax return, and will cause Supermill to pay promptly all additional taxes, penalties and interest assessed by the Internal Revenue Service and any additional amounts determined by the Internal Revenue Service to be owing as a result of any computational errors. b) That nothing in this agreement forecloses or limits the ability of the Internal Revenue Service to examine and

11 make adjustments to Supermill's tax return after it is filed. c) That defendant will not, after the filing of Supermill s tax return, cause Supermill to file any claim for refund of taxes, penalties, or interest for amounts attributable to the return filed in connection with this plea agreement. d) That due to defendant s fraud, Supermill is liable for the fraud penalty imposed by the Internal Revenue Code, U.S.C. 1(f), on its tax liability for calendar year 00 and defendant, as president of Supermill, agrees that a civil fraud penalty may be assessed against the corporation. e) To give up any and all objections that could be asserted to the Examination Division of the Internal Revenue Service receiving materials or information obtained during the criminal investigation of this matter, including materials and information obtained through grand jury subpoenas. RELEVANT CONDUCT. Defendant admits that Supermill, Inc. received at least $,0,0 of unreported income for the calendar year 01. Defendant agrees to cooperate with the IRS in the determination of Supermill s corporate income tax liability for the calendar year 01. Defendant agrees: a) That defendant will cause Supermill to file, prior to the time of sentencing, a U.S. Corporation Income Tax Return for the calendar year 01, subject to the above admissions, correctly reporting previously unreported income and that defendant will, if requested to do so by the Internal Revenue Service, cause Supermill to provide the Internal Revenue Service with information regarding the year covered by the corporate tax

12 return, and shall cause Supermill to pay promptly all additional taxes, penalties and interest assessed by the Internal Revenue Service and any additional amounts determined by the Internal Revenue Service to be owing as a result of any computational errors. b) That nothing in this agreement forecloses or limits the ability of the Internal Revenue Service to examine and make adjustments to Supermill s return for 01, after it is filed. c) That defendant will not, after the filing of the 01 return, cause Supermill to file any claims for refund of taxes, penalties, or interest for amounts attributable to the 01 return. d) That due to defendant s fraud, Supermill is liable for the fraud penalty imposed by the Internal Revenue Code, U.S.C. 1(f), on the understatement of its tax liability for the calendar year 01 and defendant, as president of Supermill, agrees that a civil fraud penalty may be assessed against the corporation. e) To give up any and all objections that could be asserted to the Examination Division of the Internal Revenue Service receiving materials or information obtained during the criminal investigation of this matter, including materials and information obtained through grand jury subpoenas. f) That nothing in this agreement, including but not limited to defendant s full payment and satisfaction of any judgment for restitution ordered by the Court herein, shall preclude or bar the Internal Revenue Service from the assessment

13 and/or collection of any additional tax liability, including interest and penalties, determined to be due and owing from Supermill by the Internal Revenue Service, for 00 and 01 tax years.. Defendant further agrees to cooperate fully with the USAO, the Internal Revenue Service, the Federal Bureau of Investigation, and, as directed by the USAO, with any other federal, state, or local law enforcement agency. This cooperation requires defendant to: a) Respond truthfully and completely to all questions that may be put to defendant, whether in interviews, before a grand jury, or at any trial or other court proceeding. b) Attend all meetings, grand jury sessions, trials or other proceedings at which defendant s presence is requested by the USAO or compelled by subpoena or court order. c) Produce voluntarily all documents, records, or other tangible evidence relating to matters about which the USAO, or its designee, inquires. d) Act, if requested to do so, in an undercover capacity to the best of defendant s ability in connection with criminal investigations by federal, state, or local law enforcement authorities, in accordance with the instructions of those law enforcement authorities. Defendant agrees not to act undercover, tape record any conversations, or gather any evidence unless expressly instructed or authorized to do so by federal, state, or local law enforcement authorities. THE USAO'S OBLIGATIONS. If defendant complies fully with all defendant's

14 obligations under this agreement, the USAO agrees: a) To abide by all sentencing stipulations contained in this agreement. b) Not to further prosecute defendant for any additional violations known to the USAO at the time of the plea arising out of defendant's conduct described in the stipulated factual basis set forth in paragraph above. Defendant understands that the USAO is free to prosecute defendant for any other unlawful past conduct or any unlawful conduct that occurs after the date of this agreement. Defendant agrees, however, that at the time of sentencing the Court may consider the relevant conduct as set forth in paragraph above, in determining the applicable Sentencing Guidelines range, where the sentence should fall within that range, and the propriety and extent of any departure from that range. c) At the time of sentencing, provided that defendant demonstrates an acceptance of responsibility for the offense up to and including the time of sentencing, to recommend a two-level reduction in the applicable sentencing guideline offense level, pursuant to U.S.S.G. E1.1, and an additional one-level reduction if available under that section. d) Not to offer as evidence in its case-in-chief in the above-captioned case or any other prosecution that may be brought against defendant by the USAO any statements made by defendant or tangible evidence provided by defendant pursuant to this agreement except as otherwise provided within this agreement. Defendant agrees, however, that the USAO may use such statements and tangible evidence: (1) in determining and in proving up the

15 tax liabilities of Supermill for calendar years 00 and/or 01; () to obtain and pursue leads to other evidence which evidence may be used for any purpose, including any prosecution of defendant as permitted by this agreement; () to cross-examine defendant should defendant testify, or to rebut any evidence, argument or representations, made by defendant or a witness called by defendant in any trial, sentencing hearing, or other court proceeding; () in any prosecution of defendant for false statement, obstruction of justice, or perjury; and () at defendant s sentencing. Defendant understands that the information provided by defendant pursuant to this agreement will be disclosed to the probation office and the Court. e) In connection with defendant s sentencing, to bring to the Court s attention the nature and extent of defendant s cooperation. f) If the USAO determines, in its exclusive judgment, that defendant has fully complied with paragraph above, and has thus provided substantial assistance to law enforcement in the prosecution or investigation of another ( substantial assistance ), the USAO will move the Court pursuant to U.S.S.G. K1.1 to impose a sentence of below the sentencing range otherwise dictated by the sentencing guideline, provided that defendant complies with all defendant s obligations under this agreement. DEFENDANT S UNDERSTANDINGS REGARDING SUBSTANTIAL ASSISTANCE. Defendant understands the following: a) Any knowingly false or misleading statement by defendant will subject defendant to prosecution for false

16 statement, obstruction of justice, and perjury and will constitute a breach by defendant of this agreement. b) Nothing in this agreement requires the USAO or any other prosecuting or law enforcement agency to accept any cooperation or assistance that defendant may offer, or to use it in any particular way. c) Defendant cannot withdraw defendant s guilty plea if the USAO determines that defendant did not satisfy the requirements of paragraph above, and therefore, does not make a motion pursuant to U.S.S.G. K1.1 for a reduced sentence or if the USAO makes such a motion and the Court does not grant it. d) At this time the USAO makes no agreement or representation as to whether any cooperation that defendant has provided or intends to provide constitutes substantial assistance. The decision whether defendant has provided substantial assistance rests solely within the discretion of the USAO. e) The USAO s determination of whether defendant has provided substantial assistance will not depend in any way on whether the government prevails at any trial or court hearing in which defendant testifies. BREACH OF AGREEMENT. If defendant, at anytime between the execution of this agreement and the completion of defendant s cooperation pursuant to this agreement or defendant s surrender for service of defendant s sentence, whichever is later, knowingly violates or fails to perform any of defendant's obligations under this agreement, the USAO may declare this agreement breached. If the

17 USAO declares the agreement breached, and the Court finds such a breach to have occurred, defendant will not be able to withdraw defendant s guilty plea, and the USAO will be relieved of all its obligations under this agreement. In particular: a) The USAO will no longer be bound by any agreements concerning sentencing and will be free to seek any sentence up to the statutory maximum for the crime to which defendant has pleaded guilty. b) The USAO will no longer be bound by any agreements regarding criminal prosecution, and will be free to prosecute defendant for any crime, including charges that the USAO would otherwise have been obligated not to prosecute pursuant to this agreement. c) The USAO will be free to prosecute defendant for false statement, obstruction of justice, and perjury based on any knowingly false or misleading statement by defendant. d) The USAO will no longer be bound by any agreement regarding the use of statements, tangible evidence, or information provided by defendant, and will be free to use any of those in any way in any investigation, prosecution, or civil or administrative action. Defendant will not be able to assert either (1) that those statements, tangible evidence, or information were obtained in violation of the Fifth Amendment privilege against compelled self-incrimination, or () any claim under the United States Constitution, any statute, Rule (e)() of the Federal Rules of Criminal Procedure, Rule of the Federal Rules of Evidence, or any other federal rule, that statements, tangible evidence, or information provided by

18 defendant before or after the signing of this agreement or any leads derived therefrom, should be inadmissible.. Following a knowing and willful breach of this agreement by defendant, should the USAO elect to pursue any charge or any civil or administrative action that was either dismissed or not filed as a result of this agreement, then: a) Defendant agrees that any prosecution or civil or administrative action not time-barred by the applicable statute of limitations as of the date of defendant's signing of this agreement may be initiated against defendant notwithstanding the expiration of the statute of limitations between the signing of this agreement and the commencement of any such prosecution or action. b) Defendant gives up all defenses based on the statute of limitations, any claim of preindictment delay, or any speedy trial claim with respect to any such prosecution or action. LIMITED MUTUAL WAIVER OF APPEAL AND COLLATERAL ATTACK. Defendant gives up the right to appeal any sentence imposed by the Court, including any order of restitution, and the manner in which the sentence is determined, provided that (a) the sentence is within the statutory maximum specified above, (b) the Court does not depart upward in offense level, and (c) the Court determines that the total offense level is or below, prior to any departure under U.S.S.G. Section K1.1. Defendant also gives up any right to bring a post-conviction collateral attack on the conviction or sentence, except a post-conviction collateral attack based on a claim of ineffective assistance of counsel, a

19 claim of newly discovered evidence, or an explicitly retroactive change in the applicable Sentencing Guidelines, sentencing statutes, or statutes of conviction.. The USAO gives up its right to appeal the Court's Sentencing Guidelines calculations, provided that (a) the Court does not depart downward in offense level and (b) the Court determines that the total offense level is or above, prior to any departure pursuant to U.S.S.G. Section K1.1. SCOPE OF AGREEMENT. The Court is not a party to this agreement and need not accept any of the USAO's sentencing recommendations or the parties' stipulations. Even if the Court ignores any sentencing recommendation, finds facts or reaches conclusions different from any stipulation, and/or imposes any sentence up to the maximum established by statute, defendant cannot, for that reason, withdraw defendant's guilty plea, and defendant will remain bound to fulfill all defendant's obligations under this agreement. No one -- not the prosecutor, defendant's attorney, or the Court -- can make a binding prediction or promise regarding the sentence defendant will receive, except that it will be within the statutory maximum.. This agreement applies only to crimes committed by defendant, has no effect on any proceedings, including forfeiture proceedings, against defendant not expressly mentioned herein, and shall not preclude any past, present, or future forfeiture actions except as expressly set forth above. NO ADDITIONAL AGREEMENTS 0. Except as set forth herein, there are no promises,

20 understandings or agreements between the USAO and defendant or defendant's counsel. Nor may any additional agreement, understanding or condition be entered into unless in a writing signed by all parties or on the record in court. This agreement is effective upon signature by defendant and an Assistant United States Attorney. AGREED AND ACCEPTED UNITED STATES ATTORNEY'S OFFICE FOR THE CENTRAL DISTRICT OF CALIFORNIA DEBRA WONG YANG United States Attorney SANDRA R. BROWN Assistant United States Attorney Chief, Tax Division Date I have read this agreement and carefully discussed every part of it with my attorney. I understand the terms of this agreement, and I voluntarily agree to those terms. My attorney has advised me of my rights, of possible defenses, of the Sentencing Guideline provisions, and of the consequences of entering into this agreement. No promises or inducements have been made to me other than those contained in this agreement. No /// /// /// /// /// ///

21 one has threatened or forced me in any way to enter into this agreement. Finally, I am satisfied with the representation of my attorney in this matter. CHARLES W. TODD Defendant Date I am Charles W. Todd s attorney. I have carefully discussed every part of this agreement with my client. Further, I have fully advised my client of his rights, of possible defenses, of the Sentencing Guideline provisions, and of the consequences of entering into this agreement. To my knowledge, my client's decision to enter into this agreement is an informed and voluntary one. GEORGE NEWHOUSE Counsel for Defendant CHARLES W. TODD Date