Settlement negotiations ongoing between Bernhard, Crawford Lewis
Attorneys for James M. "Tres" Bernhard have been cooperating with the Crawford Lewis law firm as the two sides work toward reaching settlements with several buyers who bought bogus movie industry tax credits from Bernhard while he was working at the firm as a tax credit specialist.
"We've gotten some cooperation from the defendants in terms of working out settlements at this time, and I'm very hopeful the whole civil part of this matter can be resolved expeditiously," says Mary Olive Pierson, who is representing Crawford Lewis in a potentially multimillion-dollar civil suit it filed against Bernhard last week.
That suit accuses Bernhard, who worked as an attorney for the firm from 2007 until March of this year, of using proceeds from the sale of movie tax credits for his own personal use and to pay off personal debts. It also alleges that he forged documents, checks, emails and even a court judgment as part of a scheme to sell tax credits he didn't possess.
Several investors thought they were buying those credits through the firm, according to the lawsuit, and Pierson says making them aware before the May 15 state tax filing deadline that their credits are nonexistent and paying them restitution is Crawford Lewis' top priority. Bernhard's local attorney, David Dugas, did not return calls for comment.
While those settlement negotiations are proceeding, the suit suggests the story will play out on multiple fronts for a long time to come. For one thing, the matter has been referred to federal and state law enforcement agencies for possible prosecution. For another, other companies are named in the suit and allegedly pre-sold tax credits for several million dollars each that they failed to transfer to a broker. Sources say additional suits targeting those companies are likely.
Then there are questions about the way the state's movie tax credit program is administered. Though state officials have said in recent years they have closed loopholes that caused problems with the program in the past, the allegations that have surfaced in the case against Bernhard are tied to very recent activities.
"I think that the legislation that created the program is a good backdrop for how it ought to work," says Pierson. "But they have got to tighten the controls for how the paperwork and documentation is administered. It seems like a loose organization."
comments powered by Disqus
The right choice
New home sales surge in October