U.S. Sues 32 Individuals, Alleging $30 Million Tax Credit Scam
The United States has sued four Certified Public Accounts (CPA), 27 tax preparers and one other individual, seeking to bar them from promoting an alleged tax scam involving bogus income tax credits claimed for sham sales of methane from landfills, the Justice Department announced today.
According to the civil injunction lawsuit, filed in Tampa with the U.S. District Court for the Middle District of Florida, George Calvert of Hernando Beach, Fla., and Gregory Guido of Lithia, Fla., concocted a scheme that involves creating bogus business records purportedly documenting sales of methane from landfills in Puerto Rico, Illinois, New York, Ohio and Connecticut. The suit alleges that there were no methane sales, but that the defendants helped their customers claim tax credits based on the purported sales. Federal law allows an income tax credit with respect to certain sales of fuel from non-conventional sources, including methane produced from landfills.
The government complaint alleges that Calvert and Guido promoted the scheme through tax preparers, who acted as sub-promoters. The tax preparers allegedly sold interests in the sham methane production facilities to thousands of customers in at least 14 states across the country and prepared income tax returns for their customers claiming more than $30 million in tax credits based on the sham methane sales.
Two of the larger sub-promoters, according to the complaint, were Louis and Elizabeth Powell, a married couple from Carthage, Texas. The suit alleges that the Powells sold the scheme to more than 1,800 customers, and then prepared tax returns for customers claiming more than $7.8 million of the improper credits.
Another large sub-promoter alleged to have promoted the scheme is Ronald Fontenot of Lake Charles, La. The complaint alleges that Fontenot is the president and CEO of Compro-Tax Inc., a tax preparation service with over 100 offices in the eastern and southern United States. According to the complaint, Fontenot promoted the credit scheme to all Compro-Tax store operators, and at least 54 of those Compro-Tax store operators sold interests in the scheme to customers and then prepared federal income tax returns for the customers claiming the improper tax credits.
The complaint further alleges that one sub-promoter, Sally Hand-Bostick, operator of National Express Tax in Carrollton, Texas, is a representative for Drake Software, a Franklin, N.C.-based company that sells tax preparation software to tax preparers in all 50 states. Hand-Bostick allegedly promoted the scheme to tax preparers who were her Drake Software customers. She also allegedly sold the scheme to her own tax preparation customers, and prepared returns for those customers claiming nearly $2.5 million of the improper tax credits.
According to the civil injunction lawsuit, filed in Tampa with the U.S. District Court for the Middle District of Florida, George Calvert of Hernando Beach, Fla., and Gregory Guido of Lithia, Fla., concocted a scheme that involves creating bogus business records purportedly documenting sales of methane from landfills in Puerto Rico, Illinois, New York, Ohio and Connecticut. The suit alleges that there were no methane sales, but that the defendants helped their customers claim tax credits based on the purported sales. Federal law allows an income tax credit with respect to certain sales of fuel from non-conventional sources, including methane produced from landfills.
The government complaint alleges that Calvert and Guido promoted the scheme through tax preparers, who acted as sub-promoters. The tax preparers allegedly sold interests in the sham methane production facilities to thousands of customers in at least 14 states across the country and prepared income tax returns for their customers claiming more than $30 million in tax credits based on the sham methane sales.
Two of the larger sub-promoters, according to the complaint, were Louis and Elizabeth Powell, a married couple from Carthage, Texas. The suit alleges that the Powells sold the scheme to more than 1,800 customers, and then prepared tax returns for customers claiming more than $7.8 million of the improper credits.
Another large sub-promoter alleged to have promoted the scheme is Ronald Fontenot of Lake Charles, La. The complaint alleges that Fontenot is the president and CEO of Compro-Tax Inc., a tax preparation service with over 100 offices in the eastern and southern United States. According to the complaint, Fontenot promoted the credit scheme to all Compro-Tax store operators, and at least 54 of those Compro-Tax store operators sold interests in the scheme to customers and then prepared federal income tax returns for the customers claiming the improper tax credits.
The complaint further alleges that one sub-promoter, Sally Hand-Bostick, operator of National Express Tax in Carrollton, Texas, is a representative for Drake Software, a Franklin, N.C.-based company that sells tax preparation software to tax preparers in all 50 states. Hand-Bostick allegedly promoted the scheme to tax preparers who were her Drake Software customers. She also allegedly sold the scheme to her own tax preparation customers, and prepared returns for those customers claiming nearly $2.5 million of the improper tax credits.
Where does this leave all of us little guys that the scam was sold to???
ReplyDeleteVickie
Texas