Inventor accused in solar tax 'scheme' testifies at trial

By Amy Joi O'Donoghue

Published: April 25, 2018 2:42 pm

SALT LAKE CITY A federal judge grew increasingly frustrated during a Wednesday trial over a key witness' statements that went on for several minutes without directly answering questions posed by his attorney.

"You've got to focus on the questions. You got to answer the questions. I don't know where to start here," explained U.S. District Court of Utah Judge David Nuffer. "How do I run this trial if a two-line question produces a four-page answer?"

Nuffer advised Denver Snuffer Jr. to work with his client, Neldon Johnson, over the lunch hour to learn how to answer questions in brief.

Johnson, founder and CEO of International Automated Systems, is at the heart of a federal case which alleges he, his company, LTB1, RaPower-3 and Gregory Shepard are the architects of an "abusive tax scheme" that has cost the U.S. Treasury at least $50 million.

As the Deseret News was first to report in 2013, Johnson has been claiming for more than a decade to be behind the development of revolutionary solar technology that, at the time, had yet to be linked to any significant energy production.

The federal government, in a 2015 complaint seeking an injunction against Johnson, his companies, Shepard and RaPower-3, said the claims represented nothing more than a scam to collect tax credits for renewable energy in violation of the IRS tax code.

RaPower-3 continues to promote the purchases of lenses on its website to reduce tax liability and is part of a weekly local radio program touting Johnson's technology.

On Wednesday, much of Johnson's testimony focused on the trial-and-error development of a bladeless turbine using jet propulsion technology that he said functions with the solar technology to produce heat.

He described a monthslong demonstration in Mesquite, Nevada, that lit up a hillside like a "football field."

"People loved it," he said, adding there was a lot of interest and exposure over the development of the technology.

The turbine was developed in Salem and earlier demonstrated at Brigham Young University, where the heat blew off a brass nozzle and hit a cement column. Johnson said officials asked him to leave.

Later, he used an alloy with better heat conductivity and the device worked.

At a demonstration at Rocky Mountain Power's geothermal plant for utility officials, Johnson testified that his system was hooked to a 50-kilowatt generator.

"It burned out the generator and they were upset we burned down their system," Johnson said.

Ultimately, Johnson said he turned from geothermal to solar energy. He testified that he hooked up his system to his grocery store in Salem, powering the lights, freezers and coolers until the city "got upset with us."

The federal government asserts Johnson and Shepard use promises of tax credits to acquire customers for their business. The customers lease the lenses and can in turn earn rental income, while at the same time claiming the tax credit.

Snuffer pointed to documents that show a $40 million company deficit.

Johnson also testified that customer deposits of a little more than $4 million in 2009 and 2010 had been refunded "for most" customers because, as Snuffer outlined, no energy output had been verified.

Testimony continues Friday, with additional days set aside in May and June.

Link to original article at DeseretNews.com