A federal judge in Tampa, Fla., has permanently barred eight men – including five tax preparers and two Certified Public Accountants (CPA) – from promoting an alleged tax fraud scheme involving bogus income tax credits. The eight men are among 32 defendants named in a civil injunction lawsuit who allegedly helped customers claim more than $30 million in bogus federal income tax credits designed for producers of fuel from non-conventional sources. The court orders were signed by Judge Susan C. Bucklew of the U.S. District Court for the Middle District of Florida.
According to the government complaint in the case, the scheme involved claiming tax credits based on the purported recovery and sale of methane from landfills in Puerto Rico, Illinois, New York, Ohio and Connecticut. In fact, the government’s complaint states that no methane was produced or sold, although some of the defendants created fictitious business records to falsely document the purported production and sales.
The eight men enjoined are George Calvert of Hernando Beach, Fla.; Gregory Guido of Lithia, Fla.; Robert Anderson of Bloomington, Ill.; Ralph Johnson of Alton, Ill.; David Geiger of St. Charles, Mo.; William Neel of Clayton Mo.; Mark Johnson of Mansfield Texas; and Carl Martin-Stewart of Carthage, Texas. All eight consented to be enjoined without admitting wrongdoing. The lawsuit remains pending against the other 24 individual defendants, although the case against some defendants has been transferred to a federal court in Texas.
The government suit alleges that Calvert and Guido, who is a CPA, concocted the scheme and promoted it through tax preparers who acted as subpromoters – including Ralph Johnson, Mark Johnson, Geiger and Neel, who is also a CPA. The tax preparers allegedly sold interests in the fictitious methane-production facilities to thousands of customers in at least 14 states across the country and prepared income tax returns for customers claiming tax credits based on the fictitious methane sales.
According to the complaint, Martin-Stewart sold the scheme to customers and helped create promotional materials that were distributed to subpromoters and customers. The complaint alleges that Anderson prepared false engineering reports for the scheme promoters to use to purportedly substantiate the fictitious methane production. On June 15th Anderson pleaded guilty to conspiracy to defraud the United States and mail fraud in a related federal criminal case. He faces a maximum penalty of five years in prison.
The injunction orders also bar the eight men from interfering with or obstructing Internal Revenue Service (IRS) audits of scheme participants. In addition, Calvert is permanently barred from preparing federal tax returns for others or representing anyone in a matter before the IRS.
John DiCicco, Acting Assistant Attorney General for the Justice Department’s Tax Division, thanked Shana Starnes, the Justice Department trial attorney who handled the case, and Jean Lane, a revenue agent with the IRS’s Small Business/Self-Employed Division, who conducted the investigation.
In the past decade, the Justice Department has obtained injunctions against more than 410 tax return preparers and tax-fraud promoters. Information about the Justice Department’s Tax Division and its efforts to enjoin unscrupulous tax return preparers and tax-fraud promoters is available on the Justice Department Web site.