Utah County Man Pleads Guilty to Fraud, Tax Charges in Connection with Kickback Scheme Involving Construction Invoices
Embezzled about $800,854 from Tennessee Company
| U.S. Attorney’s Office March 22, 2013 |
SALT LAKE CITY—Darin W. Bare, age 47, of Eagle Mountain, Utah, pleaded guilty to mail fraud and filing a false tax return in federal court this week, admitting that he embezzled $800,854.63 from Clayton Homes, a company headquartered in Tennessee that specializes in building pre-manufactured and modular homes.
According to a felony information filed in the case, Bare managed the Salt Lake City sales office of a subsidiary of Clayton Homes and was responsible for hiring contractors and subcontractors to improve property lots for landscaping and home construction. The charging document alleged Bare devised and executed a scheme to obtain payment from Clayton Homes through the use of false invoices.
As a part of a plea agreement reached with federal prosecutors, Bare admitted that he conspired with a contractor, identified in court documents as D.J.H., to create and submit false invoices to Clayton Homes showing that work had been done on property lots sold by his office when, in fact, the work had not been done. D.J.H., a resident of Utah County, was the owner and operator of a general construction company known as H.B.
Bare admitted that he instructed D.J.H. on how much to charge Clayton Homes on the false invoices. Bare then entered the invoices into the Clayton Homes computer system. Relying on Bare’s representations on the invoices, Clayton Homes processed the false invoices, issued checks to D.J.H.’s business, and mailed the checks to Bare. Bare admitted he would then deliver the payments to D.J.H., who would provide him with a kickback. Bare said he deposited the checks into a checking account in another person’s name to avoid detection. Over time, Bare embezzled $800,854.63 through the fraud.
Bare also admitted that he did not report any of the money he embezzled from Clayton Homes on any of his tax returns. According to the plea agreement, Bare signed and filed a tax return for 2009 that failed to report an additional $482,639 in income for the tax year.
Bare, who waived indictment and entered his guilty pleas Wednesday, is scheduled to be sentenced May 30, 2013, at 2:30 p.m. in U.S. District Judge Clark Waddoups’ courtroom. He faces up to 20 years in prison for the mail fraud conviction and up to three years in prison for the tax conviction. He also agreed to pay restitution as a part of his plea agreement. The amount of restitution and the schedule of payments will be determined as a part of the sentencing proceeding.
The case is being prosecuted by the U.S. Attorney’s Office in Salt Lake City and investigated by special agents of IRS-Criminal Investigation and the FBI.