Seattle man pleads guilt to energy tax credit scam
PORTLAND – A Seattle man pleaded guilty Wednesday, June 20, to orchestrating a plan to fraudulently profit from the sale and purchase of Oregon Department of Energy business energy tax credits.
Martin J. Shain, 61, entered guilty pleas to one count each of conspiracy to defraud the government and tax evasion.
Shain and Joseph Colello, a former program manager for the tax credit program, had a secret business relationship in which Shain used a sham company to receive commission payments from sellers. Shain charged sellers a 1- to 2-percent fee, undercutting brokers who typically charged a 10 percent fee for facilitating similar transfers. He would then send Colello a kickback for connecting him with the sellers, according to court documents.
Colello, 57, of Salem was sentenced in April to five years in prison and three years of supervised release and more than $81,000 in restitution for his role in the scheme.
Shain deposited more than $1.3 million in income from the commissions charged to sellers of the tax credits between 2012 and 2015, the court documents show. He would transfer part of the funds into a personal account from which he would issue biweekly cashier's checks as a kickback to Colello for a portion of the fee. The earnings were never reported to the IRS, according to court documents. During the three-year period, Colello accepted more than $300,000 in bribe payments for his role in the scheme.
Colello pleaded guilty March 15 to one count each of conspiracy to engage in monetary transactions in property derived from specific unlawful activity, conspiracy to defraud the IRS and filing a false income tax return.
Shain faces a maximum sentence of five years in prison, a $250,000 fine and three years of supervised release on each charge. He will be sentenced on Sept. 20, 2018 before U.S. District Court Judge Robert E. Jones.