Owner Of Louisiana Film Tax Credits Companies Sentenced For Wire Fraud
BATON ROUGE, LA – United States Attorney Walt Green announced today the sentencing of GREGORY MARTIN WALKER, 47, formerly of Baton Rouge, Louisiana. WALKER previously pled guilty on October 23, 2013, to wire fraud in violation of Title 18, United States Code, Section 1343.
WALKER was sentenced today by U.S. District Judge James J. Brady to 70 months imprisonment and a term of 3 years on supervised release following imprisonment. WALKER was also sentenced to pay restitution in the amount of $1,833,619.75 to the 24 victims of his fraud. Additionally, WALKER was ordered to forfeit $971,418 to the United States, said funds being the property which was derived from his scheme to defraud investors and purchasers of film tax credits.
In total, WALKER sold bogus tax credits with a face value of $3,823,441 to 24 investors and collected $2,560,670 from them.
WALKER was engaged in the business of buying and selling of Louisiana motion picture investor tax credits. WALKER owned and operated The Bishop, LLC, an entity which purported to own film tax credits for resale to others. WALKER represented to purchasers that he owned tax credits for various film productions, including Universal Soldier IV, El Gringo, Mama I Want to Sing, and Transit.
The State of Louisiana, Department of Economic Development, Office of Entertainment Industry Development (“LDED”) administered the Louisiana Motion Picture Incentive Act. In order to develop and promote film productions, the State of Louisiana offered tax credits for the production of movies within the State. Such tax credits can be used to pay the Louisiana income taxes of the film production companies, redeemed by the film production companies for a discounted price at the Louisiana Department of Revenue (“LDR”), or even sold to others who could use the tax credits to pay their Louisiana income tax liabilities. LDR was vested with the authority to disallow tax credits if the transferor of tax credits did not have rights to claim or use the tax credits at the time of their purported transfer.
Strategies for Investment, LLC (“SFI”) was a Baton Rouge business owned and operated by a local Certified Public Accountant (“CPA”). WALKER and The Bishop sold tax credits to SFI, which re-sold said credits to tax clients of the CPA. WALKER and The Bishop represented that they owned and controlled the tax credits which they sold to SFI.
From November 2011 through July 2012, WALKER marketed tax credits to the CPA who owned and operated SFI. From August 2011 through September 2013, WALKER also sold tax credits to other Louisiana taxpayers who sought tax credits to pay their Louisiana income tax liabilities.
Beginning in August, 2011, and continuing through in or about January, 2013, WALKER devised and executed a scheme to defraud purchasers of Louisiana film tax credits. WALKER falsely represented to purchasers that he owned certain tax credits, when in fact, he neither owned nor controlled such film tax credits. In order to carry out his scheme to defraud, WALKER forged the signatures of various individuals on tax credit purchase agreements and used interstate wires to complete his scheme.
WALKER sold purported tax credits to SFI on approximately 11 occasions between January 3, 2012 and June 20, 2012. SFI paid WALKER and The Bishop approximately $971,418 for the purchase of tax credits purporting to have a face value of $1,456,926. WALKER used the funds obtained through his scheme for his personal enrichment.
This matter was jointly investigated by the Federal Bureau of Investigation, the Louisiana Inspector General’s Office, and the United States Grand Jury for the Middle District of Louisiana. The case is being prosecuted by Assistant United States Attorney Rene I. Salomon. Additional assistance was provided by the Louisiana Department of Economic Development and the Louisiana Department of Revenue.
United States Attorney Green stated, “We will continue to safeguard all types economic programs that fall prey to fraudsters and ensure they are held accountable for their actions.”
FBI Special Agent-in-Charge Michael Anderson stated, “This conviction should convey a clear message to the public that schemes to defraud that interfere with legitimate government incentives to stimulate economic growth in Louisiana will not be tolerated.”
Louisiana Inspector General Stephen Street commented, “This sort of blatant fraud undermines the entire tax credit program and cannot be tolerated. We will continue working with the FBI and United States Attorney to make sure that those who engage in this sort of corruption face criminal consequences.”