Lake Charles man barred from alleged landfill scam

To view the injunction [CLICK HERE]

The following is a news release from the Department of Justice:

WASHINGTON - A federal court in Beaumont, Texas, has permanently barred two men from promoting an alleged tax fraud scheme involving bogus tax credits for the production of methane gas from landfills, the Justice Department announced today.  Ronald Fontenot and Anthony Burrell consented to the civil injunction order against them without admitting wrongdoing.  The order was signed by Judge Marcia A. Crone of the U.S. District Court for the Eastern District of Texas.

According to the government complaint, which was originally filed in Florida, the scheme involved bogus federal income tax credits available to producers of fuel from non-conventional sources.  The government suit alleges that George Calvert and Gregory Guido of Florida, both previously enjoined and criminally convicted as a result of their involvement, concocted the scheme and promoted it through tax preparers like Fontenot and Burrell, who acted as sub-promoters to individual customers.  The 32 defendants named in the civil injunction lawsuit allegedly helped customers claim more than $30 million in tax credits for the production and sale of fuel from landfill gas facilities that either did not exist or belonged to others.  According to the complaint, Fontenot, of Lake Charles, La., and Burrell, of Livingston, Tex., are allegedly responsible for preparing federal income tax returns for customers that claimed at least $2.6 million in false tax credits.

Fontenot and Burrell are the 29th and 30th of the 32 defendants to be enjoined.  The case against the two remaining defendants is pending.  The order also requires Fontenot and Burrell to produce to the government a list identifying all customers for whom they prepared tax returns claiming the fuel credits between Jan. 1, 2003, and July 1, 2009.

In the past decade, the Justice Department's Tax Division has obtained hundreds of injunctions against tax fraud promoters and tax return preparers.  Information about these cases is available on the Justice Department website.

Here is a response from the Law Firm - Simien & St Mary representing the two men in this case:

This firm represents both Ronald Fontenot and Anthony Burrell.  The U.S. Justice Department issued a misleading news release regarding my clients having been "permanently barred from promoting a tax fraud scheme".  This release is in response to the Justice Department's news release:

Anthony Burrell and Ronald Fontenot, professional tax preparers, voluntarily entered into a stipulated injunction with the U.S. Justice Department to not prepare tax returns that claiming tax credits for the production of methane gas from landfills.  Although Section 45 (formerly Section 29) of the Internal Revenue Code authorizes the claiming of such tax credits, the company owned by two individuals, George Calvert and Gregory Guido, was determined to now have owned the landfills and gas production facilities from which they claimed to have generated landfill gas which resulted in the tax credits.  Both Calvert and Guido were recently convicted of fraud.  Neither Burrell nor Fontenot had prepared any returns claiming the tax credits since 2006.   The injunction limits the preparing of tax returns claiming these invalidated energy tax credits.  Neither Fontenot nor Burrell were found to have committed any wrongdoing in conjunction with the tax credits and each voluntarily entered into the injunction in full agreement that the tax credits should not be claimed in light of the government's investigation.  The government sought similar injunctions to be entered into with certified public accounts, tax preparers and other tax preparers across the country.

The Internal Revenue Service began investigating Calvert and Guido's tax credits in 2004 and concluded its investigation in 2008.  In finding no wrongdoing against the CPSs, tax preparers and other tax professionals against whom these injunctions were sought, the supervising investigator found as follows:

"Thus far in the promoter investigation, we have learned that the preparers completed significant background and legal research to determine that the law under IRC 29 allows for a credit for the sale of energy from an alternative fuel source.  The Service is not challenging the tax credit with respect to the law in this instance.  However, the evidence thus far has shown that these preparers were not aware of the facts of the alternative fuel tax scheme, specifically, a critical fact.  That critical fact was the true ownership/rights to take the alternative fuel tax credit.

To date, we have found no evidence that the preparers who were sold this scheme by the promoters were knowledgeable about the true landfill ownership.  They did research this credit as to its proper tax law treatment and if the promoter had owned the rights to the credit, the taxpayer could have correctly claimed the credit."