OAKLAND, CA—Sean Brian Higgins pleaded guilty yesterday to filing a false tax return, United States Attorney Melinda Haag and Special Agent in Charge, Internal Revenue Service, Criminal Investigation, Marcus Williams announced.
In pleading guilty, Higgins, 44, of Livermore, California, admitted that from 2001 to 2005, he was the president, chief executive officer, and co-owner of HT Oil, LLC (HT Oil), a business engaged in the exploration and production of crude oil and natural gas. The company’s principal offices were located in Dublin, California (and subsequently moved to Pleasanton, California), while its production operations were located primarily in Kansas. In April 2005, investors learned of allegations that Higgins had commingled the assets of the limited partnerships and paid himself large sums in addition to his salary. The investors subsequently sought the appointment of a receiver to preserve the assets of the limited partnerships. On June 15, 2005, the receivership was perfected pursuant to a ruling from the Contra Costa County Superior Court.
According to court documents, Higgins had signature authority on all HT Oil bank accounts. He made numerous transfers of money from HT Oil accounts to his personal bank accounts, which exceeded his contributions to the business and the amounts that he reported on his income tax returns as income from HT Oil. He paid himself $399,070 in addition to his salary during the years 2002 through 2005, which resulted in an additional tax due and owing of $133,726. Higgins used the money for his personal use, including funding the start-up of a new, unrelated business called Fantasy Garage, LLC. Higgins used Fantasy Garage to acquire exotic cars and motorcycles, which he made available for rent to third parties. In his plea agreement, Higgins agreed to pay a civil fraud penalty in the amount of $100,294.50.
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