Trial begins in $30 million Tax Fraud Scheme
The trial of two former accountants began last week in Tampa, Florida. George B. Calvert and Gregory F. Guido, both Florida natives, are alleged to have masterminded an energy tax credit scheme that defrauded the Internal Revenue Service of more than $30 million.
The case revolves around an IRS provision that allowed producers of fuels from nonconventional sources to claim a tax credit on sales of the fuel to third parties. The defendants allegedly forged documents stating that the owners of various landfills used to produce methane gas, which qualifies under the provision as fuel from a nonconventional source, had signed over to them the rights to the energy tax credits resulting from sales of the methane. In reality, most of the landfills did not even exist, and those that did were incapable of producing methane gas.
Calvert and Guido then involved Tax preparers from all over the country into their scheme. The tax preparers were recruited convince their clients to invest in the methane-producing landfills. They were told that in exchange for investing, they would receive the tax credit that they could apply to their tax return. From the perspective of the investors, there seemed to be very little risk, as they were not required to pay any money until after they received the tax refund from the IRS.
The investors were provided with falsified promissory notes, giving them the impression that they had invested in the landfills. The investors were then directed to include the fake promissory notes with their tax returns in order to receive the credit. Upon receipt of their IRS refund, the investors would then send up to eighty percent of the refund to Calvert and Guido’s company. Calvert and Guido used a portion of the money to pay off the tax preparers and kept the rest for themselves. At this point, it is unknown whether the IRS will attempt to recover any of the ill-gotten money from individual taxpayers.
The key witness for the prosecution, Robert H. Anderson, was a prior co-conspirator in the tax credit scheme. Anderson pled guilty in a previous lawsuit to charges related to his role in the fraud and was sentenced to thirty-seven months in prison. Both Calvert and Guido were also named in the previous lawsuit. Both men agreed to permanent injunctions barring them from any involvement in the tax credit program. The federal trial is expected to last approximately a month. If found guilty of all ten counts of fraud and money laundering, both Calvert and Guido could each face up to ninety-five years in prison and be required to pay restitution.