Hawkey Firm Sued Over Investments

A semi-retired Santa Ana engineer Wednesday filed a $2.2-million lawsuit against Hawkey Income Tax and Investments of Anaheim, just one week after federal agents seized the company’s books as part of an investigation into allegedly fraudulent business practices.

The suit, filed in Orange County Superior Court, alleges that the investment firm sold Clarence McMillan an interest in farming equipment that it did not own. The suit also alleges Hawkey commingled investor funds in an artichoke-growing operation in Wyoming.

McMillan invested $49,000 in two partnerships controlled by Leslie “Bill” Hawkey, owner of the tax preparation and investment company, according to the lawsuit.

On May 17, agents from the Internal Revenue Service and the U.S. Postal Inspection Service confiscated Hawkey’s business records in response to a search warrant issued by a U.S. magistrate.

Hawkey’s office telephone has been disconnected, and he could not be reached for comment on the lawsuit Wednesday.

Federal agents said last week that Hawkey and his son Leslie (Biff) Hawkey allegedly established and controlled 75 fraudulent business partnerships involving millions of dollars invested in farming equipment, Jerusalem artichokes, land in Wyoming and a resort near Yellowstone National Park.

McMillan’s suit alleges that the Hawkeys fraudulently sold him an interest in used farming equipment owned by a Wyoming farmer. McMillan’s second investment involved a 10% interest in an artichoke farm partnership. In both cases, McMillan was promised tax benefits in return for his investments.

Stephen Nill, McMillan’s Costa Mesa attorney, said six Orange County investors contributed $90,000 to the artichoke-growing partnership. Instead of paying the investors for the crops, the harvested artichokes were fed to cattle and pigs on Hawkey-owned farmland, Nill said.