San Diego
Michael Hoyt Dupont, 47, and Peggy Vaughan Dupont, 51, chief executive officers of the Dupont Energy Control Corporation, pleaded guilty Friday in federal court in San Diego to charges of income tax evasion and the sale of unregistered company securities.
The charges stemmed from a joint investigation by the Internal Revenue Service, the FBI, the state attorney general’s office and the U.S. attorney’s office of alleged mismanagement of the Dupont Energy Control Corporation (DECC).
The corporation was established in 1978 when the two traded several patents valued at $100,000 for 1 million shares of stock in a Nevada shell corporation called “Silver Empire.” The Duponts renamed the company shortly after the sale and moved it to San Diego.
The suit claimed that the Duponts sold DECC stock to investors without first registering it with the Securities and Exchange Commission, then failed to report the income from the sale on federal income tax returns.
In a hearing before U.S. District Judge Rudi M. Brewster Friday, the two admitted to both claims and agreed to make restitution to DECC investors. Both were released Friday on their own recognizance and face a maximum of five years imprisonment and a $110,000 fine.
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