Trial begins for duo accused using energy tax credits to defraud IRS

TAMPA — Prosecutor Simon A. Gaugush clicked on the PowerPoint, took a deep breath and turned to the jury.

After years of investigation by federal agents, he was poised to argue Tuesday that the two gray-haired men sitting at the defense table behind him — George B. Calvert and Gregory F. Guido — defrauded the Internal Revenue Service of more than $30 million through a complex tax credits scheme.

The plot involved thousands of taxpayers nationwide, authorities say. Expected to last a month in a Tampa federal courtroom, the trial will include dozens of witnesses, hundreds of documents and thousands of numbers.

To jurors, Gaugush simplified the prosecution's contention — "This case boils down to a very basic concept: You can't sell what you don't have."

Calvert, 78, of Hernando Beach and Guido, 54, of Lithia each could get up to 95 years in prison and be ordered to pay restitution if convicted on all 10 fraud and money-laundering counts. Calvert is a former certified public accountant who worked for Arthur Andersen & Co. for more than 20 years, and Guido, at the time of his indictment, was also a certified public accountant.

Much of the defense's opening arguments attacked the government's key witness, Robert H. Anderson, a conspirator in the scheme who pleaded guilty to a fraud charge and was sentenced last summer to 37 months in prison. A judge also ordered Anderson to pay the IRS $2 million in restitution and forfeit nearly $6 million, the amount the government alleged he profited from the conspiracy.

Gaugush called Anderson an insider who would testify that he forged signatures and fabricated documents at the defendants' orders.

Defense attorneys called him a professional con man who claimed to be an engineer but didn't even have a college degree. Anderson, they said, manipulated Calvert and Guido.

"There was a fraud committed in this case," said Calvert's attorney, Ronald Cacciatore. "And it was committed by Mr. Anderson."

The case centers on an IRS provision that allowed producers of fuels from nonconventional sources — in this case, methane gas pumped from landfills — to claim a tax credit when they sold the fuel to unrelated third parties.

As a longtime alternative energy consultant, Calvert had experience in the industry.

Between 2002 and 2006, Gaugush told jurors, Calvert and Guido took advantage of the tax credit allowance. This is how authorities say they did it:

The two men identified landfills in Illinois, New York, Ohio, Connecticut and Puerto Rico. At least one site was no more than an empty field; some actually existed, but seldom possessed the infrastructure to produce methane gas.

Calvert and Guido then created fraudulent documents that stated the landfill owners had transferred the rights to claim the tax credits to the defendants' own companies, including Hernando-based Gas Recovery Partners-2GP.

So they could claim the tax credits, Calvert and Guido also falsified and backdated documents to indicate the gas company was selling the methane to unrelated third parties. Those sales, Gaugush told jurors, never occurred.

The men also recruited tax return preparers across the country to persuade their clients to purchase the fictitious tax credits.

Soon after, the conspirators manufactured fake promissory notes to create the illusion that the taxpayers had actually invested in shares of the landfills and had money at risk. With those notes, the taxpayers could claim the tax credits on their tax returns.

For the investors, the opportunity offered no risk. They didn't pay Gas Recovery until they received their tax refunds. Only after the IRS paid the taxpayers did they send up to 80 percent of the money on to Calvert and Guido's organization.

An IRS spokesman declined to say if the agency would try to recover money from the taxpayers or if any of them lived in Florida.

With their profits, Calvert and Guido paid the tax preparers, none of whom have been criminally charged. The indictment indicates Calvert wrote checks totaling almost $2 million in the name of Gas Recovery to himself, Guido or other companies they controlled.

Almost none of that, defense attorneys said Tuesday, is true.

Anderson masterminded the scheme, said attorney Norman Cannella Sr. "The evidence is going to show you," Cannella said, "he is not worthy of your belief."

Throughout the day, Calvert was attached to an oxygen tank he carried in a handbag; he sometimes shuffled in and out of the courtroom with a cane. His wife, Margot, sat in the first row behind the defense table and shook her head during much of the prosecution's presentation. For most of the proceedings, Guido frowned as he slouched in his chair.

Along with about 30 other people, both men were named in a lawsuit that concluded in October. Calvert and Guido each agreed to permanent injunctions that kept them from being involved with the tax credit program and forced them to provide the IRS with names of all the people to whom they sold the tax credits.

News researcher Natalie Watson contributed to this report. John Woodrow Cox can be reached at (352) 848-1432 or jcox@sptimes.com.

Trial begins for duo accused using energy tax credits to defraud IRS 06/08/11 [Last modified: Wednesday, June 8, 2011 11:47pm]

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