The Justice Department has sued two tax preparers it accuses of selling bogus gold-mining tax deductions to pro football players.
The civil suit accuses Eric J. Peterson of Channelview, Texas, and William H. Camp of Washington, D.C., of selling a scheme called Midas through a firm called Merendon Mining of Colo., and the Institute of Financial Learning of Calgary, Canada. According to the government complaints, in 2003 salespeople from both companies began persuading customers to participate in the Midas scheme by promising them large profits from gold mines in Colorado and Arizona.
The participants usually made no investments of their own, but instead used tax refunds they received by filing amended tax returns claiming false gold-mining development deductions for prior years.
Camp and Peterson allegedly prepared many of the false amended returns, with the amounts of the mining deductions based on the amount needed to offset the customers' income for those years. Seven of their customers were current or former NFL players. Clients allegedly received a combined $1 million in fraudulent refunds before the IRS caught on to the scheme.
The Justice Department is suing Camp and Peterson to permanently bar them from preparing tax returns for others. Peterson and Camp could not be immediately reached for comment.
