U.S. Court in Seattle Permanently Shuts Down Washington, D.C., Tax Preparer
Man Promoted Sham Mining Deduction Scheme Through Merendon Mining of Colorado, Merendon Mining of Nevada and the Institute for Financial Learning
WASHINGTON – A federal judge in Seattle, Wash., has permanently barred a District of Columbia man, William H. Camp, Jr., from preparing tax returns for others and from promoting a scheme involving bogus gold mining tax deductions, the Justice Department announced today. The permanent injunction order was entered by Judge Ricardo S. Martinez of the U.S. District Court for the Western District of Washington, where a substantial number of Camp’s customers reside.
The court found that Camp was a salesmen for a sham mining expense tax scheme called MIDAS, which was offered by a firm called Merendon Mining of Colorado and the Institute for Financial Learning (IFFL).
According to the court, Camp began persuading customers in 2003 to participate in the MIDAS scheme by promising large profits from purported investments in Colorado and Arizona gold mines. The court found that MIDAS participants usually made no investment of their own funds, but instead used funds obtained from the IRS by filing amended tax returns claiming bogus gold mining development deductions to receive large tax refunds for earlier tax years. The court further found that Camp prepared these false amended returns, many of which wrongfully eliminated the majority of his customer’s income tax liabilities for 1997 through 2002. The court also found that Camp charged his customers up to $4,000 each to prepare and file the false amended returns.
The court further found that Camp prepared a legal opinion letter for his customers regarding the applicability of the mining deduction. The court found that Camp is not a certified public accountant, never held an accounting license, and did not consult any legal authority in drafting the opinion. The court held that Camp in fact knew that his customers were not engaged in the business of mining and that MIDAS participants had paid no money toward any mine development, even though his opinion letter falsely stated that "development expenses" claimed by his customers were tax deductible.
The injunction bars Camp from promoting the MIDAS tax scheme and any other false or fraudulent tax plan, preparing or assisting others in preparing any tax form or document, and falsely representing himself as a certified public accountant.
Acting Assistant Attorney General John A. DiCicco thanked Tax Division trial attorneys Jacqueline Brown and Tom Curteman for their handling of the case, and revenue agents Andrew Crabb and Sean Flannery of the Internal Revenue Service’s Small Business/Self-Employed Division for their investigative work.
Over the past decade, the Justice Department’s Tax Division has obtained injunctions against more than 395 tax return preparers and tax-fraud promoters. Information about these cases is available on the Justice Department Web site.