RaPower judge issues contempt order
Written by Matthew Ward Category: Featured News Published: 03 July 2019
Energy tax scam figures repeatedly failed to comply with court order
A federal judge agreed to hold several people at the center of the RaPower solar energy tax scheme in civil contempt last week after they repeatedly failed to comply with a receivership court order in the case.
According to the civil contempt order signed by U.S. District Judge David Nuffer, Neldon Johnson, R. Gregory Shepard, Glenda Johnson, Randale Johnson and LaGrand Johnson were all held in civil contempt, though Shepard is said to have “purged his contempt” as of May 23 while the judge’s order was being crafted.
The judge set firm deadlines for the defendants to comply with the court’s receivership order. The court also ordered the defendants to pay legal fees and costs incurred by the U.S. attorney and the court-appointed receiver from assets unrelated to the RaPower scheme. The attorney’s fees alone in the civil contempt matter are likely more than $25,000.
The court found last October RaPower to be nothing more than a tax-diversion scheme sold to unwitting investors, accumulating at least $50 million in fraudulent funds over several years.
A receiver was appointed to take possession of assets related to the scheme in an effort to recover money defrauded from the U.S. Treasury. One 75-acre parcel outside Delta—it hosted the solar power towers used to dupe investors into believing they were investing in a viable renewable energy project—is set for auction later this month. It’s likely the first of numerous land and residential acquisitions made in Millard County and elsewhere with the scheme’s ill-gotten gains to go on the auction block.
In a quarterly report filed by Klein & Associates in March, the receiver, R. Wayne Klein, described to the court the ongoing efforts by defendants to avoid complying with the court’s receivership order.
In one entry under the headline “Business Accounting Records,” the receiver notes: “While the Receiver can reconstruct most financial transactions through analysis of bank records, the bank records alone do not indicate the purposes of the transactions. The internal records of the company… and similar business records are needed to identify the sources and recipients of payments, understand the purposes of each payment, determine the solvency of the paying entities, and evaluate the legitimacy of the transactions. Defendants have provided none of these records to the Receiver.”
The receiver went on to describe a number of other examples where the defendants simply avoided submitting sworn statements, sitting for depositions, providing records of property and stock transfers and more. Subpoenas issued in January for many of these records as well as to compel Neldon Johnson and Glenda Johnson to sit for depositions was simply ignored. Neldon Johnson went so far as filing a “pro se” court action—meaning he filed it while acting as his own attorney—seeking a protective order against the receiver. Glenda Johnson, through her attorneys at Sandy law firm Nelson Snuffer Dahle & Pouslen, filed a similar order seeking protection.
The receiver subsequently demanded all billing records pertaining to the law firm’s work on behalf of the Johnsons and any affiliated companies they owned. The law firm fought the request, but lost in court and provided billing records in April, according to the receiver.
Though Neldon Johnson was found to be indigent by the court in May and appointed an attorney, the law firm’s records showed a $735,000 retainer paid to Nelson Snuffer, apparently to cover appeals in the RaPower case. The receiver reported ownership of these funds is in dispute since their source is so far unknown. If the funds are found to stem from the RaPower scheme, they could be clawed back by the receiver estate.
In the receiver’s quarterly report, which most likely weighed heavily in the civil contempt order against the defendants, Klein wrote: “The Receiver’s ability to make decisions and take action is being slowed—but not thwarted—by his inability to obtain necessary records and testimony. Defendants have failed to deliver documents required by the Order and have refused to comply with subpoenas. Glenda Johnson has failed to comply with mandates of the Order, a subpoena, and a Court order specifically requiring her to appear to be deposed. Randale and LaGrand Johnson...have delivered no documents to the Receiver.”
Three evidentiary hearings so far this year were held to determine whether the defendants violated the court’s orders in the ongoing RaPower saga. Defendants, given ample opportunity to comply, simply failed to do so, the judge concluded in his June 25 order.
“The evidence detailed at the three evidentiary hearings and herein shows that Shepard, Johnson, and Respondents disobeyed the Corrected Receivership Order,” Judge Nuffer wrote. “Once the United States made this showing, the burden shifted to Shepard, Johnson, and Respondents to show that they were in compliance... They failed to make either showing.”
Several deadlines have already lapsed, with Neldon Johnson’s court-appointed attorney seeking at least one deadline extension. If the parties continue to refuse to comply, new sanctions, including jail, could be ordered by the court.
The original article is here