UPDATED: NASCAR Team Owner Indicted In Tax Case

Haas Automation owner Gene Haas was arrested Monday on suspicion of conspiracy, filing false tax returns and witness intimidation. In a 52-page indictment, federal prosecutors allege that Haas – who also owns the Haas-CNC Racing Team that fields the #66 Nextel Cup Chevrolet driven by Jeff Green and Johnny Sauter's #00 Busch machine -- orchestrated a plan to list $50 million in bogus expenses that he could write off as business costs, in an attempt to save his company $20 million in taxes.

Haas was held without bail, after Justice Department officials argued in L.A. Federal District Court that he represents a risk of flight, since he is single, has no children, and owns a Cessna jet that he could use to flee to China, where he has extensive business interests and would not be subject to extradition. He faces 20 years in prison if convicted.

In a statement, company spokesmen said Haas is not guilty, and that the tax issues involve the company's former chief financial officer, John Phillips. Haas Automation recently won a lawsuit accusing Phillips of cheating the company out of $27.5 million.

There is no word at this hour how Haas’ arrest and indictment might affect Haas CNC Racing. Haas came to NASCAR from off-road racing, where he was a championship-winning driver. Hisd team has a 40,000-square-foot building in Harrisburg, North Carolina, a he recently announced plans to build a multi-million dollar wind tunnel in the state.

UPDATE: Included in the federal indictment are allegations that Haas used his race teams to create illegitimate expenses that he then claimed on corporate tax returns.

Most of the allegations of wrongdoing stem from before the creation of Haas CNC Racing in late 2002. But the indictment alleges that on at least two occasions, Haas CNC Racing and another team -- identified only by the initials C.C.M. – accepted sponsorship payments from Hass Automation, only to funnel much of the money back to the company, and Haas himself. Haas Automation sponsored C&C Motorsports and driver Troy Cline on the NASCAR West Series from 1999-2001, and in off-road events with drivers Joe Custer -- currently General Manager of Haas CNC Racing – and Cline.

In September of 2000, Haas Automation allegedly sent a check for $2.79 million to C.C.M. – $290,000 of which was earmarked as sponsorship for its NASCAR team. C.C.M. then returned $2.5 million to Haas Automation, with the money then allegedly deposited into Haas’ personal bank account. In a similar transaction, Haas Automation is alleged to have sent a check for $5,215,000 to C.C.M. on December 28, 2001; recording the expenditure as “expenses for cost of goods.” Days later, the team sent the money to Haas CNC Racing.

The 52-page indictment against Haas includes a total of 11 counts; nine for tax fraud and two for allegedly threatening an informant and requesting that another informant provide false testimony.