IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE ) ) ) ) ) ) ) ) SUPERSEDING INDICTMENT. Introduction

Transcription

1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF DELAWARE UNITED STATES OF AMERICA, Plaintiff, v. DONALD LEE DUTTON, SR., and VICKI R. DUTTON, Defendants. ) ) ) ) ) ) ) ) Criminal Action No GMS SUPERSEDING INDICTMENT The Grand Jury for the District of Delaware charges that: Introduction At all times material to this Superseding Indictment: I. Donald Lee Dutton, Sr. and Vicki R. Dutton, defendants herein, were the sole owners and operators of a business in Georgetown, Delaware known by various names, including Dutton Trucking Company, Inc., Little D. Trucking Co., Inc. and D. Dutton Trucking, Inc. (collectively "Dutton Trucking"). Dutton Trucking performed trucking and transportation services. 2. Dutton Trucking has a business office located at N. Dupont Highway, Georgetown, Delaware. 3. Donald Lee Dutton, Sr. and Vicki R. Dutton worked together in the Dutton Trucking offices. 4. Donald Lee Dutton, Sr. and Vicki R. Dutton maintained bank accounts at Wilmington Trust Company in the names Dutton Trucking Company, Inc., account number xxxx-3314, D. Dutton Trucking Co., Inc., account number xxxx-2569, and Little D. Trucking Co., Inc., account number xxxx Donald Lee Dutton, Sr. and Vicki R. Dutton both had authority to write checks on the accounts described in paragraph 4, and had access to a debit card for those accounts. FILED MAR

2 6. Robin Johns, a separately charged co-defendant, was an employee of Dutton Trucking and was responsible for billing, truck dispatch, and bookkeeping duties. 7. R. W. was an employee of Aliens Family Foods, Inc. ("Aliens"), located in Seaford and Harbeson, Delaware. R.W. was responsible for administrative duties, including processing Dutton Trucking's invoices for payment by Aliens. 8. Aliens operated poultry processing plants in Delaware and Maryland, and transported chicken products throughout in the United States. Aliens maintained a fleet of delivery trucks and used its own employee truck drivers to transport approximately forty percent of its shipped products. The remaining product was transported by outside trucking and transportation companies, including Dutton Trucking. 9. Aliens identified each trucking load by a "load number" and a "manifest number." 10. Invoices submitted by Dutton Trucking listed the deliveries it hauled for Aliens by including a load and manifest number for each delivery. Once the invoice was received, the Aliens distribution clerk, R. W., prepared a "purchase order." R. W. forwarded the purchase order, with Dutton Trucking's original invoice, to Aliens' accounts payable department, for payment. 11. Beginning in or around March 2009, Aliens sent payment checks to Dutton Trucking via U.S. Mail. Scheme and Artifice to Defraud 12. Starting in or around 2004 and continuing through in or around April2009, Donald Lee Dutton, Sr., Vicki R. Dutton, Robin Johns, and R.W. did devise, execute, attempt to execute, and conspire with each other and persons known and unknown to the grand jury to devise and execute a scheme and artifice to defraud Aliens by obtaining money and property by means of false and fraudulent pretenses and representations. 13. As part of this scheme and artifice to defraud, in or around June 2004, Donald Lee Dutton, Sr. and Vicki R. Dutton agreed to pay R. W. a fee for her assistance in defrauding Aliens by 2

3 submitting false and fraudulent Dutton Trucking invoices that claimed that payment was due for fictitious and duplicate trucking loads. 14. It was a further part of the scheme that Donald Lee Dutton, Sr., Vicki R. Dutton, Robin Johns, and R.W. caused Aliens to generate checks to pay these fraudulent invoices, and between in or around March 2009 and April 2009, caused Aliens to send these checks by United States Mail. 15. It was a further part of the scheme that, on a weekly basis, Donald Lee Dutton, Sr., Vicki R. Dutton, or Robin Johns deposited the Aliens checks into the Dutton Trucking checking accounts at Wilmington Trust Company. These checks included payment for the duplicate and fraudulent loads that were not actually hauled by Dutton Trucking. 16. The Dutton Trucking checking accounts described in paragraph 4 of this Superseding Indictment were owned and controlled by Donald Lee Dutton, Sr. and Vicki R. Dutton. It was further part of the scheme that Donald Lee Dutton, Sr. and Vicki R. Dutton withdrew money from the Dutton Trucking checking accounts to pay their own personal expenses. 17. It was a further part of the scheme that Donald Lee Dutton, Sr. and Vicki R. Dutton, signed and authorized checks payable to Robin Johns, which included payment to R.W. for her role in the scheme to defraud. Robin Johns cashed the checks, met with R.W., and paid R.W. her share of the fraud proceeds in cash. 18. As a result of the conspiracy and the scheme and artifice to defraud, the defendants caused Aliens to pay Dutton Trucking approximately $1.3 million in overpayments for false, fictitious, and duplicate loads. COUNT 1 Conspiracy to Commit Mail Fraud 19. The facts alleged in paragraphs 1-18 of this Superseding Indictment are incorporated by reference herein. 3

4 20. From in or around 2004, through in or around April 2009, in the District of Delaware and elsewhere, defendants Donald Lee Dutton, Sr., Vicki R. Dutton, and persons known and unknown to the grand jury did knowingly conspire to devise a scheme and artifice to defraud and to obtain money and property by means of false and fraudulent pretenses and representations and promises, as set forth in paragraphs 1-18 above. 21. In furtherance thereof, on or about the dates listed below, in the District of Delaware, defendants Donald Lee Dutton, Sr., Vicki R. Dutton, and persons known and unknown to the grand jury caused All ens to send the following checks from All ens in Seaford, Delaware, to Dutton Trucking in Georgetown, Delaware, by U.S. Mail and common carrier: Amount of False Date (on or Face Amount of and Duplicate about) Check Number Check Charges 03/03/ $21, $5, /04/ $22, $7, /13/ $27, $7, /20/ $23, $5, /27/ $26, $7, All in violation of Title 18, United States Code, Sections 1341 and COUNTS2-6 Mail Fraud 22. The facts alleged m paragraphs 1-18 of this Superseding Indictment are incorporated by reference herein. 23. From in or around 2004, through in or around April 2009, in the District of Delaware and elsewhere, defendants Donald Lee Dutton, Sr. and Vicki R. Dutton, and persons known and unknown to the grand jury did knowingly devise and intend to devise a scheme and artifice to defraud and to obtain money and property by means of false and fraudulent pretenses and representations and promises. The scheme and artifice to defraud is more particularly set forth in paragraphs 1-18 above. 4

5 24. In furtherance of the scheme and artifice to defraud, on or about the dates listed below, in the District of Delaware, defendants Donald Lee Dutton, Sr. and Vicki R. Dutton, did cause Aliens to send the following checks from Aliens in Seaford, Delaware, to Dutton Trucking in Georgetown, Delaware, by U.S. Mail and common carrier, which each constitutes a separate charged offense: Amount of False Date (on or Face Amount of and Duplicate Count about) Check Number Check Charges 2 03/03/ $21, $5, /04/ $22, $7, /13/ $27, $7, /20/ $23, $5, /27/ $26, $7, All in violation oftitle 18, United States Code, Sections COUNT7 Conspiracy to Defraud United States Relevant Parties and Entities At all times material to this Superseding Indictment: 25. The allegations listed in paragraphs 1-6 of this Superseding Indictment are incorporated by reference herein. 26. Dutton Trucking Company, Inc., is a pass-thru corporation that was previously incorporated and owned by H.R.D., the father of Donald Lee Dutton, Sr.; however, in or around November 2000, H.R.D. transferred ownership and control of Dutton Trucking Company, Inc. to defendant Donald Lee Dutton, Sr. 27. Little D. Trucking Co., Inc. is a Delaware corporation, originally incorporated in Little D. Trucking Co., Inc. is listed by the Internal Revenue Service as a "C" corporation, which is required annually to file a United States Corporate Income Tax Return, Form

6 Defendant, Donald Lee Dutton, Sr., is listed as the president of Little D. Trucking Co., Inc. on the corporation's State of Delaware Certificate for Renewal and Revival of Charter dated February 29, The State of Delaware Annual Franchise Tax Reports for tax years report that Defendant, Donald Lee Dutton Sr. is President, and Defendant Vicki R. Dutton is the only other Director/Officer of Little D. Trucking Co., Inc. 28. D. Dutton Trucking Co., Inc. is a Delaware corporation, originally incorporated in or around September 13, 2006, as a "non-stock," pass-thru corporation. The articles of incorporation list Donald Lee Dutton, Sr. as the President. Wilmington Trust Company bank account records reflect that Donald Lee Dutton, Sr. is the President and Vicki R. Dutton is the Vice-President of D. Dutton Trucking Co., Inc. 29. Between 2005 and 2009, Donald Lee Dutton, Sr. and Vicki R. Dutton maintained bank accounts at Wilmington Trust Company in the names D. Dutton Trucking Co., Inc., account number xxxx-2569, and Little D. Trucking Co., Inc., account number xxxx-1325 (hereinafter "the Dutton Trucking Checking Accounts"]. 30. The defendants, through the corporations described in paragraphs 26-28, employed between 15 and 22 truck drivers, who were each paid weekly an amount based on the revenues generated by the loads they hauled. 31. The defendants, through the corporations described in paragraphs 26-28, also employed between 2 and 3 office staff members. The defendants paid the office staff members, including Robin Johns, T.H., S.D., and T.D. a fixed weekly salary. 32. For the years 2005 through 2008, Little D. Trucking Co., Inc. and D. Dutton Trucking, Inc. collected approximate gross receipts of between $1.1 million and $2.1 million annually. These gross receipts included income from trucking services, as well as money paid as a result of the scheme and artifice to defraud described in paragraphs

7 Purpose and Object of the Conspiracy 33. The defendants, Donald Lee Dutton, Sr. and Vicki R. Dutton, conspired with one another and with others known and unknown to the grand jury to defraud the United States for the purpose of impeding, impairing, obstructing, and defeating the lawful Government functions of the Internal Revenue Service of the Treasury Department in the ascertainment, computation, assessment, and collection of the revenue: to wit, defendants' individual income taxes and corporate income taxes owed by defendants on behalf of Little D. Trucking Company, Inc. As a result of the conspiracy to defraud, defendants failed to report approximately $1,859,264 in taxable income earned by the defendants and Little D. Trucking Company, Inc. during the tax years , resulting in approximately $577,034 in taxes due and owing to the United States. Manner and Means The manner and means by which the conspiracy was sought to be accomplished included, among others, the following: 34. For the tax years 2005 to 2008, Donald Lee Dutton, Sr. and Vicki R. Dutton, falsely and fraudulently failed to file United States individual income tax returns, Forms 1040, and also falsely and fraudulently failed to pay any federal income taxes to the Internal Revenue Service. 35. For the tax years 2005 through 2007, Donald Lee Dutton, Sr. and Vicki R. Dutton falsely and fraudulently failed to file United States Corporate Income Tax Returns, Forms 1120, on behalf of Little D. Trucking Co., Inc. 36. Between 2005 and 2008, Donald Lee Dutton, Sr. and Vicki R. Dutton falsely and fraudulently used the Dutton Trucking Checking Accounts, described in paragraph 29, to pay their own personal expenses by the means of debit card charges, checks, and cash withdrawals from the accounts. 37. The defendants falsely and fraudulently concealed their personal use of the Dutton Trucking Checking Accounts by signing and authorizing hundreds of checks payable to Robin Johns. 7

8 38. Defendants further falsely and fraudulently instructed Robin Johns to cash these checks in order to pay R.W. for her role in the scheme to defraud, described in paragraphs Between in or around May 2007 and continuing through in or around July 2008, defendants caused and instructed S.D. to prepare spreadsheets categorizing the debit card transactions, checks, and cash withdrawals for Little D. Trucking Co., Inc. and D. Dutton Trucking, Inc. during the tax years. As the defendants well knew, these spreadsheets falsely and fraudulently categorized personal expenses and kickback payments to R.W. as business expenses. These spreadsheets thus falsely and fraudulently indicated that Little D. Trucking Co., Inc. and D. Dutton Trucking, Inc. had materially less taxable income for the tax years than each corporation actually earned. 40. Donald Lee Dutton, Sr. and Vicki R. Dutton presented and caused to be presented the false spreadsheets described in paragraph 39 to an accountant, K.M., for purposes of preparation of corporate and individual state and federal tax returns. 41. To further conceal the corporate income and expenses of Little D. Trucking Co., Inc. and D. Dutton Trucking, Inc., and to further conceal the defendants' individual income, Donald Lee Dutton, Sr. and Vicki R. Dutton prepared and distributed United States Treasury Department Internal Revenue Service Forms 1099 ["Forms 1099"] to Dutton Trucking's truck drivers and certain office staff. 42. Defendants failed to file any Forms 1099 with the federal government. Overt Acts In furtherance of the conspiracy, and to effect the objects thereof, the following overt acts were committed in the District of Delaware and elsewhere: 43. On or about March 15, 2006, the defendants failed to file au nited States Corporate Income Tax Return, Form 1120, on behalf of Little D. Trucking Co., Inc., for the 2005 tax year. 44. On or about March 15, 2007, the defendants failed to file au nited States Corporate Income Tax Return, Form 1120, on behalf of Little D. Trucking Co., Inc., for the 2006 tax year. 8

9 45. On or about March 15, 2008, the defendants failed to file a United States Corporate Income Tax Return, Form 1120, on behalf of Little D. Trucking Co., Inc., for the 2007 tax year. 46. On or about October 15, 2008, the defendants failed to file a United States individual income tax return, Form 1040, for the 2007 tax year. 47. On or about October 15, 2009, the defendants failed to file United States individual income tax return, Form 1040, for the 2008 tax year. 48. The defendants signed, authorized, or caused to be signed by T.D., the following checks payable to Robin Johns: a. Check number 1396, dated January 6, 2005, from the Little D. Trucking Co., Inc., account number xxxx-1325, in the amount $ , payable to "Robin Johns," with the memo section reading "Renee $1423/Milton $150." b. Check number 1480, dated January 27, 2005, from the Little D. Trucking Co., Inc., account number xxxx-1325, in the amount $ , payable to "Robin Johns" with the memo section of the check reading "Renee/Milton." c. Check number 1512, dated February 3, 2005, from the Little D. Trucking Co., Inc., account number xxxx-1325, in the amount $ , payable to "Robin Johns" with the memo section of the check reading "Renee/Milton." 49. In or around May 2007 through July 2008, the exact date being unknown to the grand jury, the defendants prepared and caused to be prepared spreadsheets, described in paragraph 39, that falsely and fraudulently reflected the following business expenses: a. A debit purchase on or about January 14,2005, from the Little D. Trucking Co., Inc., account number xxxx-1325, in the amount of $166.00, to the "Bridal Boutique" was falsely and fraudulently categorized as "Office Expense." b. A debit purchase on or about December 14, 2005, from the Little D. Trucking Co., Inc., account number xxxx-1325, in the amount of $254.98, to 9

10 "Friedman's Jewelers" was falsely and fraudulently categorized as "Driver/Office Rewards." c. A check dated December 30, 2005, number 1393, issued from the Little D. Trucking Co., Inc., account number xxxx-1325, in the amount of $170.00, for "Delaware Child Support" was falsely and fraudulently categorized as "Drivers' Gross." 50. In the years 2007 through January 2009, the exact date being unknown to the grand JUry, defendants provided and caused to be provided fraudulent spreadsheets, described in paragraph 39, to their accountant, K.M. for the purpose of tax preparation. 5l. In or around January 2009, defendants caused K.M. to prepare a United States individual income tax returns, Forms 1040, for the tax year The Form 1040 materially understated the defendants' taxable income. 52. In or around January 10, 2009, defendants filed the United States individual income tax Form 1040, described in paragraph 51, as an attachment to their State of Delaware income tax return for the tax year As of the date of this Superseding Indictment, the defendants failed to file the United States individual income tax, Form l 040, described in paragraphs 51-52, with the Internal Revenue Service. 54. In or around January 2008, defendant Vicki R. Dutton handed out copies of Forms 1099 to truck drivers and office staff employed by Little D. Trucking Co., Inc. and D. Dutton Trucking, Inc. In the presence of the truck drivers and office staff, defendant Vicki R. Dutton tore up the employer copies of the Forms 1099 and told the truck drivers and office staff that the defendants were not going to report the truck drivers' and office staff's income to the federal government. 10

11 55. In or around January through April 2006, the defendants failed to file Forms I 099 with the Internal Revenue Service for the 2005 tax year, reflecting the amounts paid by Little D. Trucking Co., Inc. and D. Dutton Trucking, Inc. to truck drivers and office staff. 56. In or around January through April 2007, the defendants failed to file Forms I099 with the Internal Revenue Service for the 2006 tax year, reflecting the amounts paid by Little D. Trucking Co., Inc. and D. Dutton Trucking, Inc. to truck drivers and office staff. 57. In or around January through April 2008, the defendants failed to file Forms I 099 with the Internal Revenue Service for the 2007 tax year, reflecting the amounts paid by Little D. Trucking Co., Inc. and D. Dutton Trucking, Inc. to truck drivers and office staff. 58. In or around January through April 2009, the defendants failed to file Forms I 099 with the Internal Revenue Service for the 2008 tax year, reflecting the amounts paid by Little D. Trucking Co., Inc. and D. Dutton Trucking, Inc. to truck drivers and office staff. Charging Paragraph 59. From in or around 2005, the exact date being unknown to the grand jury, and continuing thereafter up to September l, 2009, in the state and District of Delaware, Donald Lee Dutton, Sr. and Vicki R. Dutton, defendants herein, and persons known and unknown to the grand jury, did unlawfully, voluntarily, intentionally and knowingly conspire, combine, confederate, and agree together and with each other and with other individuals both known and unknown to the grand jury to defraud the United States for the purpose of impeding, impairing, obstructing, and defeating the lawful Government functions of the Internal Revenue Service of the United States Treasury Department in the ascertainment, computation, assessment, and collection of the revenue: to wit, defendants' individual income taxes and corporate income taxes owed by defendants on behalf of Little D. Trucking Co., Inc. All in violation oftitle 18, United States Code, Section 37I and 2 COUNTS 8-9 Willful Failure to File Income Tax Return II

12 60. During the calendar years 2007 and 2008, Defendants Donald Lee Dutton, Sr. and Vicki R. Dutton, defendants herein, who were married residents of Ellendale, Delaware, had and received gross income listed in the table below. By reason of the defendant's gross income, defendants were required by law, by the date listed below, to make an income tax return to the Internal Revenue Service Center, at Kansas City, Missouri, to a person assigned to receive returns at the local office of the Internal Revenue Service at Kansas City, Missouri, or to another Internal Revenue Service office permitted by the Commissioner of Internal Revenue, stating specifically the items of defendants' gross income and any deductions and credits to which the defendants were entitled. Well knowing and believing all ofthe foregoing, defendants did willfully fail in the District of Delaware and elsewhere, to make an income tax return, which each constitutes a separate charged offense: Defendant's Estimated Due Date for Tax COUNT Calendar Year Gross Income Return $173,000 10/15/ $364,000 10/15/2009 Section 2. In violation of Title 26, United States Code, Section 7203 and Title 18, United States Code, COUNT 10 Willful Failure to File Corporate Tax Return 61. During the calendar year 2006, defendant Donald Lee Dutton, Sr. was President and co-owner of Little D. Trucking, Co., Inc., and defendant Vicki R. Dutton, was Vice-President 12

13 and co-owner of Little D. Trucking Co., Inc., a corporation not expressly exempt from tax, with its principal place ofbusiness at Georgetown, Delaware. Donald Lee Dutton, Sr. and Vicki R. Dutton, defendants herein, therefore were required by law, after the close ofthe calendar year 2006 and on or before March 15, 2007, to make an income tax return, for and on behalf of the corporation, to the Internal Revenue Service Center, at Kansas City, Missouri, or to the person assigned to receive returns at the local office of the Internal Revenue Service at Kansas City, Missouri, stating specifically the items ofthe corporation's gross income and the deductions and credits allowed by law. Well knowing and believing all of the foregoing, the defendants did willfully fail, on or about March 15, 2007, in the District of Delaware and elsewhere, to make an income tax return at the time required by law. Section 2. In violation of Title 26, United States Code, Section 7203 and Title 18, United States Code, COUNT 11 Willful Failure to File Corporate Tax Return 62. During the calendar year 2007, defendant Donald Lee Dutton, Sr. was President and co-owner, and defendant Vicki R. Dutton, was Vice-President and co-owner of Little D. Trucking Co., Inc., a corporation not expressly exempt from tax, with its principal place of business at Georgetown, Delaware. Donald Lee Dutton, Sr. and Vicki R. Dutton, defendants herein, therefore were required by law, after the close of the calendar year 2007 and on or before March 15, 2008, to make an income tax return, for and on behalf of the corporation, to the Internal Revenue Service Center, at Kansas City, Missouri, or to the person assigned to receive returns at the local office of the Internal Revenue Service at Kansas City, Missouri, stating specifically the items of the corporation's gross income and the deductions and credits allowed by law. Well 13

14 knowing and believing all of the foregoing, the defendants did willfully fail, on or about March 15, 2008, in the District of Delaware and elsewhere, to make an income tax return at the time required by law. In violation of Title 26, United States Code, Section 7203 and Title 18, United States Code, Section 2. 14

15 FORFEITURE ALLEGATION Upon conviction of any of the offenses alleged in Counts One through Six of this Indictment, defendants shall forfeit to the United States pursuant to Title 18, United States Code, Section 981(a)(l)(c) and Title 28, United States Code, Section 2461, any property involved in such offense, or any property traceable to such property; and any property constituting, or derived from, proceeds obtained, directly or indirectly, as a result of such violations. The property to be forfeited includes, but is not limited to, the following: a. All right title and interest in the property located at 105 Willow Street, Ellendale, Delaware If any of the property described above, as a result of any act or omission of the defendant[ s]: a. cannot be located upon the exercise of due diligence; b. has been transferred or sold to, or deposited with, a third party; c. has been placed beyond the jurisdiction of the court; Ill 15

16 d. has been substantially diminished in value; e. has been commingled with other property which cannot be clivided without difficulty; the United States of America shall be entitled to forfeiture of substitute property pursuant to Title 21, United States Code, Section 853(p), as incorporated by Title 18, United States Code, Section 982~b)(l) and Title 28, United States Code, Section 246l(c). CHARLES M. OBERLY, III UNITED STATES ATTORNEY :':Eisenstein.:...United States Attorney Dated: March 27,2012