Man who pleaded guilty in film-tax case owes creditors millions

Gregory M. Walker
Gregory M. Walker

Producer also operated hospital

A man facing a possible prison term for a film-tax-credit crime in Baton Rouge has conceded in lawsuits that he owes creditors of a bankrupt Covington hospital $3 million, a food-service company $1.36 million and $87,600 in employees’ medical bills.

Thus far, however, those debts remain unpaid by Gregory M. Walker, 46.

Over the past decade, Walker has served simultaneously as a Baton Rouge-based film producer and hospital operator. He moved to Austin, Texas, for a time, but recent federal court filings indicate he has returned to Baton Rouge.

Although one of Walker’s companies shared in an out-of-court settlement of a $65 million jury award last year, he testified in Texas that his firm’s share would be placed in trusts for his four sons. The amount of his company’s share of the settlement was not detailed in the court record.

Walker, who has testified his net worth exceeded $50 million in 2008, is paying substantial debts to the IRS over an eight-year period, he said in an April interview. Walker said he negotiated for payment of less than the $4.3 million lien the IRS filed against him after he failed to forward hospital employees’ tax withholdings to the federal government. Walker would not, however, specify how much less the IRS agreed to accept in settlement of that debt.

Since April, Walker repeatedly has declined comment on the $971,418 he has admitted stealing through his sale of nonexistent film tax credits to investors in Baton Rouge accountant Peggy Persac’s Strategies for Investment.

Walker and his attorney, John C. Anderson, did not respond Friday to additional email, fax and telephone requests for comment.

Walker pleaded guilty in Baton Rouge federal court on Oct. 23 to one count of wire fraud in the film-tax-credit case, which was investigated by the FBI and Louisiana Office of Inspector General.

U.S. District Judge James J. Brady has not yet scheduled a sentencing hearing in that case.

On Oct. 30, the judge signed a preliminary order of forfeiture against Walker in the amount of $971,418. In his request for that order, Assistant U.S. Attorney James P. Thompson noted that the amount of the forfeiture possibly would be increased at a later date.

U.S. Attorney Walt Green said Walker’s wire fraud conviction carries a possible 20-year prison term and fines that possibly could total $250,000.

Attorneys for Walker and the U.S. Department of Labor told Brady Wednesday that they had settled on a total of $87,600 to end claims for medical reimbursement by former Walker employees at several of the dozen Louisiana hospital companies he founded or purchased in the early to middle years of the past decade.

In late 2008 and early 2009, Walker ceased forwarding his hospital employees’ withholdings for medical, dental and eye care to insurers.

Walker’s Gulf States Staffing and Personnel LLC — which handled benefits for his Gulf States hospital companies — was placed into bankruptcy proceedings in March 2009. Blue Cross and Blue Shield of Louisiana immediately filed notice in that case of dangerous deficiencies in payments for health insurance.

Blue Cross officials announced that Walker’s firm failed to make its employees’ health insurance payments in November 2008 before providing two checks totaling $389,217. Neither check was honored by Walker’s bank, Blue Cross officials said, because of insufficient funds.

By the time of the bankruptcy filing, Blue Cross was owed more than $1 million in premium payments, officials of the insurer reported.

Blue Cross noted Walker’s more than 700 hospital employees and family members had unpaid claims at that time totaling $3.6 million.

“These claims cover serious and life-threatening illnesses in addition to routine procedures,” Blue Cross officials said in the bankruptcy case.

Walker said in April he thought all the medical claims had been paid off since his firm’s bankruptcy filing.

On Oct. 22, U.S. District Judge Jane Triche-Milazzo, of New Orleans, signed a judgment for $1.36 million against Walker and in favor of Maryland-based food services contractor Sodexo Operations LLC. Walker consented to that judgment, which was for services rendered at his former hospitals in Denham Springs, Hammond and New Iberia.

On the same day, Triche-Milazzo also signed a judgment for $3 million against Walker and in favor of the creditors of Gulf States Long Term Acute Care of Covington LLC. Walker consented to that judgment, as well.

The Covington company had been the most profitable of Walker’s medical facilities in Louisiana, but became insolvent in late 2008 and was placed into bankruptcy proceedings in March 2009.

For the past four years, David Adler, disbursing agent for any assets that can be recovered on behalf of the dead Covington firm’s creditors, has alleged that Walker and others stripped assets from that firm and used them for investments in Texas.

Adler’s allegations, Walker said in April, are “a joke. None of the evidence he has will prove anything.”