Sean James Hager Sentenced to 42 Months for $1.5M Fraud Scheme, Aus…

Austin businessman Sean James Hager, 49, was hit with 42 months in federal prison and ordered to pay over $1.5 million in restitution after a years-long scheme to defraud his employer and the IRS. The sentence, handed down today by U.S. District Judge Lee Yeakel, marks the end of a sprawling financial fraud case involving insider deals, false invoices, and deliberate tax concealment.

Hager, once a trusted purchasing agent at Austin-based Velocity Electronics, abused his position between 2008 and 2011 to line his own pockets. While officially responsible for acquiring computer parts to resell to Dell, Hager secretly operated a shell company, Echt Electronics, which sold the same parts back to Velocity at massive markups. Velocity had no idea it was doing business with its own employee—Hager concealed the conflict entirely, pocketing more than $1 million in illicit profits.

The fraud didn’t stop at corporate theft. Hager also lied to the taxman. He failed to disclose Echt’s earnings to his tax preparer, resulting in grossly understated income on his federal returns. That deception led to three counts of assisting in the preparation of false tax returns. Combined with two counts each of mail and wire fraud—and one count of money laundering—the jury found him guilty on all counts on May 26, 2016.

Judge Yeakel imposed the 42-month sentence on each of the mail fraud, wire fraud, and money laundering counts, to run concurrently. For the three tax counts, Hager received the statutory maximum of 36 months each, also to run at the same time. On top of prison time, he will serve three years of supervised release for the financial crimes and one year for the tax counts—again, all concurrent.

Restitution was a central component of the sentence. Hager must pay $1,164,161.92 to Velocity Electronics, the company he betrayed from within, and $368,611.33 to the IRS for unpaid taxes and penalties. The total—$1,532,773.25—reflects the full financial toll of his deception.

“The sum of all parts on Sean Hager’s theft from his employer and cheating on his taxes is simple – guilty on all counts,” said William Cotter, Special Agent in Charge of IRS-Criminal Investigation. The case was investigated by IRS-CI and prosecuted by Assistant U.S. Attorneys Elizabeth Cottingham, Alan Buie, and Daniel Castillo. Hager now faces the consequences of a greed-fueled fall from trust to federal lockup.