CEO who went on vacation before sentencing was a “sociopath,” judge says

Before pleading guilty, he took his family on vacation to Hawaii. Then he stole more.

On Wednesday, Hauck, 51, was sentenced to 5 1/2 years in prison and ordered to repay his victims, who include a cancer research nonprofit, a museum association and an international business lobby group .

“It takes a certain type of sociopath to be able to lie so continually to so many people over a long period of time,” a federal judge in Washington, DC, told him before handing down the sentence.

Hauck ultimately admitted to embezzling $2.5 million from trade associations and nonprofits that used the Hauck & Associates management company his father founded in Bethesda. He had to plead guilty twice because more victims came forward after his first plea, prosecutors said.

He double-charged his clients, used his access to their bank accounts to siphon funds and set up accounts that redirected conference registration fees to him, he admitted in court. He falsified balance sheets and funneled funds abroad to hide embezzlement.

During the years he was under investigation, according to the government, Hauck paid $75,000 in country club dues to the private Chevy Chase Club. He was on vacation in Switzerland when he was first caught embezzling client funds, according to his plea.

“What I find particularly egregious about this case,” U.S. District Judge Rudolph Contreras said, is that at no point did Hauck say, “Family reunion.” We're in a real mess here. The judge said Hauck could have pulled his children out of expensive private schools or sent them to participate in free public activities rather than the Chevy Chase country club.

Instead, Contreras said, the defendant decided, “We're going to keep up appearances.” …We will continue to steal to live this lie.

Prosecutor Kondi J. Kleinman requested an eight-year sentence.

“Mr. Hauck benefited from a type of education that most defendants in this courthouse cannot even imagine, let alone experience. … The fact that he continued to steal more is nothing short of astonishing” , Kleinman said.

The company was founded by Hauck's father in 1974; Graham Hauck had worked there since university. Sheldon Hauck Jr. said in a letter to the court that when his brother took over from their late father, the company lost major customers. The company suffered another blow when the coronavirus pandemic led to the cancellation of many company-run conferences. Graham Hauck says he also inherited a large tax debt, while caring for his wife, three children and mother.

“It is quite obvious that Graham was under extreme financial pressure,” Sheldon Hauck Jr. wrote. He added that the cost of caring for their mother now falls on him. He asked the judge to “show mercy” and hand down a lenient sentence, “not because Graham deserves it, but because his immediate and extended family deserve it.”

Graham Hauck has been in prison since September.

Defense attorney David Benowitz said Hauck sold his house to pay off $370,000, stopped drinking and lost 85 pounds in prison now that he was free from the “massive rationalization” that he had to defend his father's legacy.

“I'm sorry, incredibly sorry,” Hauck told the court, apologizing to customers, employees, family members and friends. “Even though I saw the worst possible consequence as failure – which meant closing the business and going bankrupt – I did not foresee the much worse consequences of my actions,” including divorce, which damaged his family relationships and his reputation, and prison.

His “feeble-mindedness” cost him what he most feared losing, Hauck said. “I am dedicated to working hard to make things right,” he said, adding, “No more lying or hiding.” No more pain. No more crime.