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Springfield Accountant Pleads Guilty to $3 Million Fraud Schemes

June 20, 2017 / Source: FDICIG

FOR IMMEDIATE RELEASE
June 12, 2017

SPRINGFIELD, Mo. – Tom Larson, Acting United States Attorney for the Western District of Missouri, announced that a Springfield accountant and former CPA pleaded guilty in federal court today to two embezzlement schemes totaling more than $3 million and to failing to pay more than $2 million in taxes over the past six years.

David Carl Hayes, 59, of Springfield, waived his right to a grand jury and pleaded guilty before U.S. Magistrate Judge David P. Rush to a federal information that charges him with theft from an organization receiving federal funds, wire fraud and making a false federal tax return.

By pleading guilty today, Hayes admitted that he embezzled $1,965,476 from Alternative Opportunities, a Springfield not-for-profit company that provides mental and behavioral health treatment and counseling, substance abuse treatment and counseling, employment assistance, aid to individuals with developmental disabilities, and medical services. Hayes also admitted that he embezzled $1,029,000 from Carnahan-White Fence and Iron, Inc., a Springfield company, in a wire fraud scheme. And Hayes admitted that he did not report income from Alternative Opportunities on his 2014 federal income tax return, and failed to file tax returns for several years, resulting in a total state and federal tax harm of $2,057,950.

Alternative Opportunities Fraud Scheme: $1,965,476

Hayes served on the board of directors of Alternative Opportunities from 2006 to 2011. He was the coordinator of merger and acquisition activity from 2006 to 2013, and the internal auditor from 2011 to 2013.

Doing business as Dayspring Behavioral Health Services, Alternative Opportunities operated dozens of clinics throughout the state of Arkansas. Hayes embezzled from Dayspring from Jan. 3, 2011, to March 31, 2014, by causing Dayspring to issue checks payable to himself or a person not identified in court documents, which Hayes deposited into his personal checking account.

In May 2015, Alternative Opportunities merged with Preferred Family Healthcare, Inc.

Carnahan-White Fraud Scheme: $1,029,000

Hayes began working as a consultant for Miami Nation Enterprises, an economic development corporation of the Miami Tribe of Oklahoma, in 2012, was hired as chief financial analyst in 2013 and became the chief financial officer in 2015.

In February 2014, Miami Nation Enterprises acquired majority ownership of Carnahan-White Fence and Iron, a multi-generation family-owned fencing business based in Springfield. The prior owners retained a minority share of Carnahan-White and continued to handle the day-to-day management of the company.

Hayes admitted that he defrauded Carnahan-White in a scheme that lasted from June 9, 2014, to June 26, 2016. Hayes obtained business checks from Carnahan-White, without the knowledge or authorization of Miami Nation Enterprises, which he described as “loans” or “advances.” Hayes then reimbursed Carnahan-White by causing funds to be transferred from Miami Nation Enterprises’s bank accounts into Carnahan-White’s bank account. Hayes directed Carnahan-White to alter the company’s financial records to conceal his embezzlement by re-characterizing the expenditures as “Inventory – Wood.”

Income Tax Returns: $2,057,950

Hayes admitted that he failed to disclose $776,340 of income (from Alternative Opportunities) when he filed his federal income tax return for 2013. Hayes also admitted, as relevant conduct, that he did not file tax returns for the years 2011, 2012, 2014 and 2015. (For 2016, Hayes filed for an automatic extension, so he has failed to pay taxes due and owing, but not yet to file a return when required.)

As a result, the total tax harm Hayes caused for years 2011 through 2016 was $1,741,788 in federal taxes due and owing, and $316,162 in state taxes due and owing.

Under federal statutes, Hayes is subject to a sentence of up to 33 years in federal prison without parole. The maximum statutory sentence is prescribed by Congress and is provided here for informational purposes, as the sentencing of the defendant will be determined by the court based on the advisory sentencing guidelines and other statutory factors. A sentencing hearing will be scheduled after the completion of a presentence investigation by the United States Probation Office.

This case is being prosecuted by Assistant U.S. Attorney Steven M. Mohlhenrich. It was investigated by IRS-Criminal Investigation, the FBI and FDIC-Office of Inspector General.