UPDATE (11-06-18): Haynes Brothers officials have told WNDB that none of these men are involved with the company any longer. DOJ officials had said in the press release issued yesterday that they are co-owners.
Earlier reporting below.
Rochester, NY - Three Volusia County men plead guilty in federal court to stealing around $25 million worth of toner from Xerox and selling it for much less than it was worth.
60-year-old David Haynes (left), 34-year-old Kyle Haynes (center) and 38-year-old Bryan Day (right) allegedly pocketed the proceeds from an $11 million toner sale to someone in Miami, according to a press release today from the United States Department of Justice district office in Western New York.
U.S. Attorney James P. Kennedy, Jr. says Day and the younger Haynes set up a sham company called HDH Graphics to get the toner from the New York-based company after obtaining around 63 Xerox printers through RBM Imaging in Daytona Beach, an authorized Xerox product reseller.
"It’s often said that money is the root of all evil, and in this case, it was certainly the root of the defendants’ criminal behavior," Kennedy added. "These defendants worked, plotted and schemed to steal millions of dollars from a business that has been a solid corporate citizen in our community. When individuals like these seek to enrich themselves by stealing from a business, both the business and consumers end up paying the price—through lower profits and higher costs."
As part of the plea deal, the defendants agreed to forfeit millions of dollars in funds and assets previously taken by the government.
According to prosecutors, Xerox didn't charge HDH or RBM directly for the toner. The company was supposed to be paid based on the number of prints made with the toner.
"In executing the scheme, the defendants repeatedly misrepresented to Xerox that they were making millions of prints with the toner, even though they never took most of the printers out of their boxes," the release noted. "The defendants provided Xerox with false usage profiles from the printers and false print samples that made it appear that the defendants were making the millions of prints and using much more toner than the industry average for each print."
DOJ also says the defendants filed false personal income tax returns with the IRS from 2008 to 2013, specifically noting that no net income was reported for selling that toner fraudulently. Investigators believe the defendants also falsely reported around $265,000 in travel and shipping expenses based on their HDH work.
Day and the younger Haynes admitted guilt for conspiracy to commit wire fraud and filing a false tax return. The elder Haynes - who's the father of Kyle and 37-year-old Jason Haynes, another co-defendant in this case - entered guilty to filing a false tax return.
According to federal officials, those who pled guilty to the conspiracy charge could get up to 20 years in prison and a $250,000 fine, while those who pled guilty to filing a false tax return could get as much as 3 years in prison and a $250,000 fine. Sentencing is expected to happen next March.
All four men are co-owners of Haynes Brothers Furniture, per DOJ officials, which has locations in Daytona Beach, Ormond Beach, Port Orange, New Smyrna Beach, DeLand, and Orange City.
Robert Fisher, the 75-year-old registered sexual predator who owned RBM, has also been implicated as a co-conspirator in the scheme. Charges remain pending against him and Jason Haynes.
Prior to the plea deal, Day and the three Haynes family members were each arrested in 2015 on three counts of grand theft and racketeering based on this scheme. All were freed on bail soon afterward.
Jason Haynes
Robert Fisher
