Case 6:15-cr-00003-WSS Document 4 (Court only) Filed 01/08/15 Page 1 of 6 FILED JAN 0 B 2015 IN THE UNiTED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF TEXAS CLERK US. oij COURT WESThRNX WACO DIVISION UNiTED STATES OF AMERICA * V. DOUGLAS LYNN LYON * * CRDS4ThTAL NO. y 15 C H 003 PLEA BARGAIN AGREEMENT TO THE HONORABLE JUDGE OF SAID COURT: In compliance with Rule 11 (c)(2) of the Federal Rules of Criminal Procedure, the United States of America and the Defendant in this case acknowledge the following agreement between the United States, by and through the United States Attorney for the Western District of Texas, the Defendant, DOUGLAS LYNN LYON, and the Defendant's counsel. 1) The Defendant has agreed to enter a plea of guilty to the Information on file against him, charging him with Fraud and False Statement, in violation of Title 26, United States Code, Section 7206(1). 2) The United States Attorney agrees to refrain from prosecuting Defendant for other Title 26, United States Code violations of which the United States is now aware, which may have been committed by the Defendant in the Western District of Texas. That is, this action now pending is the extent of the Federal prosecution against the Defendant in the Western District of Texas based upon all facts at hand. 3) Defendant understands and agrees that for this plea bargain agreement to be binding on the United States Attorney, Defendant must cooperate füiiy and give a complete, truthful statement to law enforcement and probation authorities. Defendant also agrees to testify when required before the Court at any trial on the merits or other proceedings. DeIendant
Case 6:15-cr-00003-WSS Document 4 (Court only) Filed 01/08/15 Page 2 of 6 understands and agrees that the United States Attorney has the sole discretion to determine whether his cooperation has been truthful and to the fullest extent possible. 4) Defendant agrees and understands that in the event he violates any term of this Plea Agreement, any statement which the Defendant gives to law enforcement personnel or prosecutors may be used in evidence against him at trial. 5) The Defendant is aware and understands that a plea of guilty can affect immigration status and may result in deportation and removal from the United States, may prevent one from ever lawfully re-entering or remaining in the United States, and may result in the denial of naturalization. 6) The United States agrees to inform the Court of the cooperation of the Defendant, if any. 7) The Defendant is aware that any sentence imposed can be up to the maximum allowed by statute for the offense(s) to which the Defendant is pleading guilty. The Defendant is also aware that the sentence to be imposed is not subject to parole. By entering into this plea agreement, and as a term of this plea agreement, the Defendant voluntarily and knowingly waives any right to appeal the sentence on any ground, including any appeal right conferred by 18 U.S.C. 3742, as amended by the United States v. Bookei 543 U.S. 220 (2005). The Defendant also voluntarily and knowingly waives the right to contest the sentence in any post-conviction proceeding, including but not limited to, a proceeding pursuant to 28 U.S.C. 2255; provided, however, that consistent with principles of professional responsibility imposed on the Defendant's counsel and counsel for the Government, the Defendant does not waive the right to challenge the sentence to the extent that it is the result of a violation of the Defendant's 2
Case 6:15-cr-00003-WSS Document 4 (Court only) Filed 01/08/15 Page 3 of 6 constitutional rights based on claims of ineffective assistance of counsel or prosecutorial misconduct of constitutional dimension. The Defendant waives all rights to challenge the sentence imposed, knowing that the Court has not yet determined that sentence. The Defendant understands and agrees that any estimate of the probable sentencing range that may be received from defense counsel, the Govermnent, or the United States Probation Office is not a promise, did not induce the guilty plea or this waiver, and does not bind the Government, the United States Probation Office, or the Court. In other words, the Defendant understands that the Defendant may not challenge the sentence imposed by the District Court, even if it differs substantially from any sentencing range estimated by defense counsel, the attorney for the Government, or the United States Probation Officer. Realizing the uncertainty in estimating what sentence the Defendant will ultimately receive, the Defendant knowingly and voluntarily waives any rights to appeal the sentence or contest it in any post-conviction proceeding, not specifically reserved herein, in exchange for the concessions made by the Government in this plea agreement. 8) The Defendant agrees to pay restitution to the victims in the counts of conviction and any victims of relevant conduct, in an amount to be determined by the United States Probation Office and ordered by the Court. 9) Had this case proceeded to trial, the United States Attorney for the Western District of Texas was prepared to prove and would prove beyond a reasonable doubt that: On or about April 15, 2009, in the Western District of Texas, the Defendant, DOUGLAS LYNN LYON, did willfully make and subscribe a false document; specifically his personal Form 1040, United States Individual Income Tax Return, for the calendar year 2008, which was verified by a written 3
Case 6:15-cr-00003-WSS Document 4 (Court only) Filed 01/08/15 Page 4 of 6 declaration that it was made under the penalties of perjury and which the Defendant did not believe to be true and correct as to every material matter. The Return, which was prepared and signed in the Western District of Texas, and filed with the Internal Revenue Service, reported, on Form 1 120s, less than the accurate amount of his business income, Rocket Glass & Mirror, Inc., whereas the Defendant then and there knew and believed that he had more income than he reported, in violation of Title 26, United States Code, Section 7206(1). Specifically, the United States Attorney would prove beyond a reasonable doubt that: The Defendant, DOUGLAS LYNN LYON, was the sole owner of Rocket Glass and Mirror, Inc. ("Rocket"), a business located in Robinson, Texas, which is in the Waco Division of the Western District of Texas. "Rocket" was a subchapter S corporation during the relevant years. The Internal Revenue Service (IRS) received information that LYON was not reporting gross receipts/income from "cash tickets" on either "Rocket's" or LYON's tax returns. The income in question was primarily from jobs paid by checks by "Rocket's" customers. LYON used generic invoices he obtained from an office supply store for these jobs rather than Quick Books, which was used to record other jobs. The practice allowed LYON to conceal the gross receipts from the cash tickets from "Rocket's" in-house bookkeeper. LYON cashed the checks at the bank he used for "Rocket's" business account and, subsequently, deposited the cash in $2,900 investments at another bank that held his personal account. LYON used the funds concealed in this manner for his personal benefit. LYON used Robert Bester, a certified public account, for the preparation of the 2006-20 12 corporate returns for "Rocket" and for the preparation of his own personal tax returns. LYON provided Bester with a "memory stick" which contained a copy of "Rocket's" Quick Books records which Bester used 4
Case 6:15-cr-00003-WSS Document 4 (Court only) Filed 01/08/15 Page 5 of 6 to prepare "Rocket's" and LYON's tax return. As noted, the Quick Books records did not contain information on the cash ticket jobs. On November 19, 2013, LYON was interviewed and admitted that he skimmed the receipts from cash tickets during the years 2006 through 2012. He stated he did not report the skimmed receipts to "Rocket's" bookkeeper or to the CPA who prepared "Rocket's" and LYON's tax returns. LYON also admitted he failed to report the skimmed cash receipts as income on the personal tax returns he filed for 2006 through 2012. He then told the IRS that he deposited all the skimmed receipts into his personal bank account, primarily in $2,900 increments, and that all of the $2,900 cash deposits into his personal bank account during 2006 through 2012 were from receipts skimmed from "Rocket." The IRS as able to determine that LYON failed to report the skimmed income on his personal tax returns in the following amounts: 2006 $ 168,200 2007 $203,000 2008 $ 172,290 2009 $ 72,500 2010 $ 130,500 2011 $118,900 2012 $ 72,500 IRS Special Agent Dan Fannin computed the tax due and owing for criminal purposes for the years as follows: 2006 $ 50,494 2007 $66,053 2008 $55,435 2009 $ 20,646 2010 $37,709 2011 $34,523 2012 $20,948 On or before April 15, 2009, LYON filed a false Form 1040 for himself and a false Form I l2os for "Rocket" for 2008, which understated his income and "Rocket's" gross receipts. 5
Case 6:15-cr-00003-WSS Document 4 (Court only) Filed 01/08/15 Page 6 of 6 The parties agree and stipulate that this factual basis is a true and accurate summary of the Defendant's offense and conduct related to his offense. The Defendant voluntarily, intelligently and knowingly agrees and stipulates that, bad the matter proceeded to trial, the United States would have proven these facts beyond a reasonable doubt. 10) It is understood and agreed by all of the parties to this instrument that each will be bound by this agreement only if all of the conditions set forth herein are met. For example, should a guilty plea be tendered by the Defendant, but later be withdrawn prior to sentencing, the United States would in no way be bound by this agreement and may prosecute the Defendant for the offenses charged in the Information as it deems appropriate. 11) This agreement constitutes the entire agreement between the United States Attorney for the Western District of Texas, the Defendant, DOUGLAS LYNN LYON, and his counsel. This agreement cannot be modified except in writing signed by all of the parties or done in open court. Date: / Respectfully submitted, Utee ROBERT PIT G RY S. GLOFF Assistant United States Attorney Date: I-i-/f Date: 1-4/S' Attorney for Defendant