Las Vegas Man Convicted of Fraudulent Stock Sale

Department of Justice, Sep 17, 2008

WASHINGTON - A Las Vegas federal jury convicted Michael Haynes of one count of conspiracy to commit tax evasion through a scheme involving the fraudulent sale of One Voice Technologies Inc. stock, the Internal Revenue Service (IRS) and the Justice Department announced today.

The jury, following a one-week trial before Chief U.S. District Judge Roger L. Hunt, deliberated for about two hours before finding Haynes guilty of conspiring to commit tax evasion totaling $684,242. Co-defendant David Jett pleaded guilty to the conspiracy charge in March 2008 and testified against Haynes during the trial.

According to the indictment and evidence presented at trial, Haynes and Jett orchestrated the fraudulent sale of $7 million in One Voice stock. Haynes and Jett used at least ten stock certificates to generate the $7 million in gross proceeds; all of these stock certificates were in different nominee names. As part of the scheme, new stock certificates in the name of One Voice were issued to at least five nominees, two of whom testified at trial. With the assistance of the transfer agent for One Voice, Haynes had the nominees sign documents that stated they had lost their original stock certificates and assigned their rights to the stock.

Haynes directed the $7 million in stock proceeds to be deposited in a nominee bank account at the Bank of Nova Scotia. At Haynes’ instruction, the proceeds were transferred via checks and wire transfers to U.S. bank accounts in his and Jett’s control. Jett and Haynes then used funds obtained from the sale of One Voice stock for their personal benefit. Haynes failed to report the proceeds of the stock sale on his personal income taxes.

"The government will continue to unravel schemes promoted and used by taxpayers to evade their federal tax obligations," said Nathan J. Hochman, Assistant Attorney General of the Justice Department’s Tax Division. "As this conviction demonstrates, those who attempt to hide behind nominees and offshore bank accounts as part of their illegal tax schemes will be held accountable."

"All income is taxable, regardless of the source," said Eileen Mayer, Chief, IRS Criminal Investigation Division. "Everyone loses in this type of scheme: the purchasers of the alleged stock, the honest taxpayers who expect all income to be properly taxed and the general public whose trust in the securities industry is eroded."