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Peak sues late founder's estate - Odessa American: News

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Peak sues late founder's estate

Lawsuit: Ray Hofman took millions from company

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Posted: Monday, March 23, 2015 5:58 pm

A civil lawsuit claims late-Midland businessman Ray Hofman took millions of dollars from Peak Completion Technologies to “live it up like rock stars,” using that money to pay for expensive cars, private airplanes, and for his own personal use.

Filed Feb. 20 in Midland County’s 142nd District Court, the lawsuit states officials with the company learned of Hofman’s supposed siphoning of funds after his Feb. 18, 2014, death.

Officials with the Texas Department of Public Safety reported Hofman, the founder and then-president and CEO of Peak Completion, was flying four miles north of Breckenridge in a Hawker Sea Fury ISS-25, a fixed-wing, single-engine plane, when he “experienced a problem with handling causing the plane to nose dive and crash into a heavily wooded area.”

According to the lawsuit, Hofman owned 28 percent of the company.

Harper Estes, the attorney with Lynch, Chappell and Alsup who filed the lawsuit, did not return a call for comment Monday.

According to the lawsuit, Hofman submitted false invoices to Peak to pay for work done by SP Engineering — which builds and modifies custom automobile upgrades — and for an airplane.

Hofman was a well-known car collector locally and throughout the car community. According to the lawsuit, Hofman had numerous vehicles that included Mercedes-Benz, Ferraris, Bentleys and Porsches.

Hofman was also accused in the lawsuit of filing false expense reports for other employees of the company and then taking those checks and depositing them in his personal bank account.

Among the many other accusations, Hofman supposedly used the company’s money to pay for personal expenses such as utilities and the hiring of four full-time employees for his residence, according to the lawsuit.

Hofman’s wife, Janna Fulfer Hofman, is named in the suit as the independent executor of Hofman’s estate and did not respond for comment through phone call or social media. Midland County District Clerk Ross Bush said Janna Hofman did not have an attorney on record. She is also accused of having knowledge of Ray Hofman’s supposed actions, according to the lawsuit.

The lawsuit went on to detail a number of stories showing the various ways Ray Hofman was accused of stealing money and how he reportedly spent the millions.

During the weekend of Nov. 15, 2013, Ray Hofman supposedly had the company pay for seven tickets to the Formula 1 race in Austin in which he said he would be entertaining clients for the business, according to the lawsuit.

None of the people in attendance were customers and Ray Hofman supposedly sent an email to a friend stating they would “live it up like rock stars,” according to the lawsuit.

Ray Hofman also supposedly asked for and received money for the Formula One tickets from three of his friends at about $5,000 a piece, according to the lawsuit.

While there, the group was also flown by helicopter to the race track at the cost of about $1,200 a day, which Ray Hofman supposedly had the company cover. During that trip, he also withdrew about $1,000 from the company’s account, according to the lawsuit.

The lawsuit also claims Ray Hofman used the company to purchase several vehicles.

One purchase was reported as a 2006 Ford GT in November 2011 which cost $182,768.63, according to the lawsuit.

Emails between Ray Hofman and the seller of the vehicle stated the two worked out the purchase of the Ford and once the money was wired, an invoice was sent to him claiming he had purchased parts for the company, according to the lawsuit.

A similar setup was used to purchase a 2012 Audi R8 GT worth $235,293.75 and a 2001 Lamborghini Pearl White 6.0 worth $145,000, according to the lawsuit.

In August 2011, Ray Hofman began the process of purchasing a Zero airplane replica from the film “Tora! Tora! Tora!” and sent an email to Peak’s accounting firm telling them to wire money to an account in Australia, according to the lawsuit. The reported total cost for the airplane was quoted at $168,000.

The plane was registered to JR Consulting NV, which Janna Hofman supposedly oversaw, and emails between Janna Hofman, Ray Hofman, and the broker of the airplane deal supposedly joked about how the couple would need more “hangar space,” according to the lawsuit.

The plane was later transferred to the Hofman Family Foundation, a nonprofit foundation created by the Hofmans, and received a tax deduction for the donation of the plane, according to the lawsuit.

To move the planes to air shows, Ray Hofman would hire a pilot friend and would send an invoice to Peak’s accounting department for paying a “hot shot” contractor, according to the lawsuit. “Hot shot” work is used for transporting tools to a well site.

The move supposedly cost the company about $2,785.30.

The Hofmans also used the money for personal use, which included Christmas toys for their children, a pirate ship playground in their backyard, and for remodeling done to their residence, according to the lawsuit.

The couple also hired a full-time housekeeper and nanny, where she was supposedly making about $60,000 while on Peak’s payroll, according to the lawsuit. They also supposedly hired a grounds keeper, a mechanic and a detailer on Peak’s payroll, according to the lawsuit.

The lawsuit claims the financial matters were kept hidden by Bob Dutton, of Dutton Harris and Company and also a defendant in the suit, because the company handled financial information for both Peak and the Hofmans, according to the lawsuit.

Instead of reporting discrepancies in the Hofman’s tax filings, different “tax strategies” were used to hide the assets, according to the lawsuit.

Dutton also supposedly helped hide the information when a sister company of Peak wanted to get a loan to obtain an airplane for company use, according to the lawsuit. A representative at Dutton’s office said he was not in the office Monday and attempts to reach him through social media were not successful.

When the bank requested monetary information about Ray Hofman to help secure the loan, Ray Hofman and Dutton supposedly drafted a way to keep much of the information hidden, and also joked to blame Janna for the delay in response, according to the lawsuit.

“We may just give them the w2s also for a quick response and blame jannas record keeping for delay on returns lol” Ray Hofman’s email was quoted in the lawsuit.

“You suck,” was the only response she had to the email, according to the lawsuit.

The lawsuit asks the defendants to pay Peak back the money, the attorney’s fees, and court costs.

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