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Tue, Oct 21, 2008

Government Seizes First Delivered Hawker 4000 In Tax Fraud Case

Gary Hall Accused Of Collusion In Cigarette Trafficking Scheme

Everyone at Hawker Beechcraft breathed a collective sigh of relief earlier this year, when the company finally delivered its first composite-bodied Hawker 4000 business jet.

The momentous June delivery (shown above), to Kansas tobacco wholesaler Gary Hall, was the culmination of a 10+ year, delayed-plagued development cycle for the aircraft formerly known as the Hawker Horizon. Hawker Beech has since delivered more copies of the super-midsize jet to eager customers... and, has also enjoyed favorable headlines in trade journals about the aircraft, following years of raised eyebrows from the industry.

But, alas, it seems the Hawker 4000 hasn't totally escaped from less-than-flattering headlines... though it's most certainly not the plane's fault.

According to the Wichita Eagle, that first Hawker 4000 -- as well as several other items of Gary Hall's personal property -- was seized last week by the federal government, over the businessman's alleged role in a massive tax avoidance scheme.

"If [Hall]'s acquitted, he'll get his plane back," said Jim Cross, spokesman for the US Attorney's office in Kansas.

According to federal documents, Hall, along with seven others, face a 43-count indictment they plotted to avoid paying $25 million in cigarette taxes to Oklahoma, and several Indian tribes.

The seizures are the culmination of an investigation that began in 2006, when the Kansas Highway Patrol stopped a vehicle and discovered numerous packages of cigarettes from Oklahoma, worth over $200,000... without required documentation and tax stamps.

Investigators soon linked Hall's Sunflower Supply Co. to the alleged trafficking scheme... and accused Hall and his associates of stamping cigarettes for sale at the lower tax rates Indian tribes receive, then selling those discounted packs at off-reservation areas.

"They carried out the scheme through a variety of means, including communications by Internet and fax and money wire transfers," a US Department of Justice release states.

Hall's attorney Dan Monnat denies his client benefitted from the scheme. "Gary Hall is a well-respected businessman and philanthropist from southeast Kansas," Monnat said. "He vigorously asserts his innocence of these accusations and welcomes a jury trial that will make that clear."

For the moment, however, Hall's Hawker sits in a hangar at an undisclosed location... presumably under lock and key, and possible armed guard.

FMI: www.usdoj.gov/usao/ks

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