Tampa, Florida - U.S. District Judge Steven D. Merryday has sentenced Walter Drakeford (72, Santa Monica, CA) to two years in federal prison for attempting to interfere with the administration of the internal revenue laws. He pleaded guilty on May 17, 2016.
According to court documents, between September 2006 and March 2009, Drakeford and another individual falsely purported to own the rights to landfill methane credits. They marketed the purported credits to a network of tax return preparers for use on individual taxpayers’ tax returns, despite knowing that the credits were non-existent and/or not able to be claimed by the individual taxpayers. The tax return preparers advised their individual taxpayer-clients to claim the credits on their tax returns. If an individual taxpayer received the tax refund as a result of the landfill methane credit claimed, they were obligated to remit a substantial portion of that refund, frequently as much as 80%, to Drakeford and others.
After questioning by the IRS regarding the purported credits, Drakeford presented false and fraudulent documentation to the IRS regarding purported Devonian shale credits in an unsuccessful effort to prevent the IRS from attempting to collect the monies owed resulting from the disallowances of the purported landfill methane credits.
When that effort failed, Drakeford knowingly caused to be presented to the IRS fraudulent and false amended tax returns that claimed purported dry hole expenses, again in an unsuccessful attempt to prevent the IRS from attempting to collect the monies owed from the purported landfill methane credits. Drakeford and others provided the tax return preparers a formula by which to calculate the amounts of the dry hole expenses to be claimed by the individual taxpayers. The formula was designed to fraudulently eliminate the individual taxpayers’ debts to the IRS based on the disallowance of the false and fraudulent landfill methane credits.
The government estimates the total amount of false and fraudulent credits claimed in this case to be $4,211,757, a substantial amount of which has been recovered from the individual taxpayers.
This case was investigated by Internal Revenue Service, Criminal Investigation. It was prosecuted by Assistant United States Attorneys Sara C. Sweeney and Rachelle DesVaux Bedke.
Source: U.S. Department of Justice, Office of the United States Attorneys
