Bart Wayne Volen, once one of Sacramento’s highest-flying contractors and real estate investors, may have undone the leniency he was to receive for his guilty plea and agreement to testify against two partners in an $18 million rip-off of the Auburn Indian tribe that owns the Thunder Valley Casino Resort near Lincoln.
Volen, 57, was arrested Tuesday at the request of federal authorities who believe he violated conditions of his freedom while awaiting sentencing in the massive fraud, now scheduled for Sept. 15.
Where Volen was arrested is unclear. As of Wednesday morning, he had not been booked into the Sacramento County Jail, where federal defendants arrested in this area are typically held.
In seven documents filed Tuesday in Sacramento federal court, Volen is accused of hiding the price he paid for a piece of San Diego-area property in order to falsely deflate his net worth, and to evade a requirement that financial institutions report transactions in excess of $10,000 to the Internal Revenue Service. Avoidance of reporting to the IRS is called “structuring” by federal law enforcement.
Much of the paper reflected Volen paid $10,000 for the property, which is what he told the probation officer, but the true price was approximately $140,000, according to court documents.
The property, located in “a small affluent neighborhood in the San Diego area northwest of Balboa Park and south of Mission Valley,” according to Tuesday’s filings, is perhaps worth as much as $1 million more than the value Volen indicated to a federal court officer.
The government has already wrested from Volen millions of dollars’ worth of property and cash that the IRS says is part of the money stolen from the United Auburn Indian Community or was purchased with the pilfered funds.
Volen pleaded guilty more than two years ago and admitted that he conspired with Gregory Scott Baker and Darrell Patrick Hinz to loot its coffers. Volen’s construction company had been hired by the tribe to finish a building project in Auburn; Baker was the tribe’s administrative officer; and Hinz had been hired to manage the building project.
Volen’s company billed the tribe with fraudulently inflated invoices, and Baker and Hinz used their positions to make sure the bills were paid. The trio split the take, with Volen getting the lion’s share.
The papers filed Tuesday say Volen is expecting significant leniency because of his comparatively early guilty plea and agreement to testify against his two co-conspirators. Prosecutors believe the prospect of Volen’s testimony for the government at a trial played a big part in the subsequent decisions by Baker and Hinz to plead guilty.
Volen faced up to 20 years in prison had he gone to trial and been convicted but, in the papers filed Tuesday, John Vincent, chief of the criminal division of the U.S. attorney’s office, says prosecutors believe “Volen anticipates that his lawyer and the government will each recommend a sentence” of five years and 10 months, “pursuant to a plea agreement.”
An affidavit of IRS Special Agent Daniel Norman filed with the motion for an arrest warrant describes in detail the byzantine moves believed employed by Volen in connection with his purchase of the property in September 2015 through a company he formed two months earlier.
Norman followed a paper trail that started with information supplied by Volen to a probation officer as part of the sentencing process. The agent then found property transfer documents in the San Diego County recorder’s office, searched records at two credit unions, a bank and a title company, and, ultimately, twice interviewed the seller of the property.
The seller, who is not named in the affidavit, told Norman that Volen deposited $50,000 into escrow, which covered approximately $30,000 in delinquent property taxes, approximately $10,000 in escrow fees and costs, and a check to the seller for approximately $10,000. Then Volen gave the seller $90,000 in cash outside of escrow, the seller said. The money was delivered in a bank bag by a friend of Volen’s on Sept. 29, 2015, the seller is quoted in the affidavit as telling the agent.
The property is currently listed for sale by a commercial real estate brokerage, with an asking price of $1,450,000, according to the affidavit.
Denny Walsh: 916-321-1189