Prairieville accountant fighting civil suit
A Prairieville accountant is fighting a civil suit that alleges he failed to verify the validity of expenses claimed by a filmmaker in order to borrow more than $1.5 million secured by Louisiana film tax credits.
Those tax credits were not honored by state officials, and the lender, Inner Media Capital, alleges in its court suit that accountant Clint Mock should cover the $1.5 million loss.
“Inner Media relied on (Mock’s) audit,” said Phillip W. Preis, the lender’s attorney.
“We have learned that all (Mock) did was rely on a summary expenditure sheet,” Preis added. “He did not verify. We now know no film was made.”
“I can prove that these things were made,” Judy L. Burnthorn, one of Mock’s attorneys, said Friday.
Burnthorn also said Mock performed audits of film expenses that were “way beyond looking at a piece of paper. Clint did a lot, much more than read a paper.”
Earlier, Mock denied that his audits had anything to do with Inner Media Capital’s loss.
“We weren’t negligent in any way,” Mock said. “We’re an audit firm. We’ve done nothing wrong. We did an above-and-beyond job.”
The film producer in the middle of the dispute is Daniel Garcia, of Mandeville. Garcia pleaded guilty in May to a charge of conspiracy to commit wire fraud in a separate scheme.
Garcia admitted he bilked Louisiana’s taxpayers of approximately $900,000 by fabricating expenses that were used to obtain state film tax credits. He is not yet scheduled for sentencing in that criminal case in Baton Rouge federal court.
Mock, the Prairieville accountant, also has offices in Baton Rouge.
In the civil suit pending against him in the 19th Judicial District Court of Judge Janice Clark, Mock says he did nothing wrong regarding the accounting reports he provided one of Garcia’s firms, DMG Holdings LLC.
DMG used those reports, which confirmed qualifying expenditures for film tax credits, to coax $1.5 million in loans from Inner Media Capital, according to that firm’s suit against Mock.
Inner Media Capital alleges in its suit that DMG withdrew audit reports by Mock after questions were raised by the Louisiana Department of Economic Development about who received film production payments.
“Because of the withdrawal of the audits, no tax credits were certified on” the DMG expenditures audited by Mock, Inner Media Capital says in its suit.
In interviews, Mock would not comment on Garcia or DMG Holdings.
But Burnthorn released a copy of a letter dated Feb. 27, 2012, from Mock to DMG Holdings at Garcia’s address in Mandeville.
In that letter, Mock told DMG that his accounting firm was “terminating our professional relationship with you and will no longer render services to DMG Holdings LLC.”
Mock said in the letter that he and his staff had become “aware of information that, had we been aware of as of the date of the (cost) report, signed on August 8, 2011, would have caused us to change our opinion issued in the report.”
In his court-filed response to the suit, Mock denies all of the lender’s allegations that he is liable for Inner Media Capital’s losses. He seeks a judgment against the lender.
In an interview, Mock added he has never been involved in the sale of any film tax credits.
Accountants are important to Louisiana’s film tax credit program, according to an affidavit by FBI Special Agent Joshua C. Morrill. That affidavit was filed in support of a search warrant application for former Baton Rouge movie producer Gregory M. Walker’s email records.
A movie production company seeking film tax credits from the Louisiana Department of Economic Development must first submit “a cost report of production expenditures which has been audited and certified by an independent certified public accountant,” Morrill noted in his affidavit.
According to the FBI affidavit, Mock completed audit reports on film-production expenses for some clients whose film-tax credits later were sold without authorization by Walker.
“Mr. Walker was never a client of mine,” Mock emphasized in an interview.
According to the FBI affidavit, Walker — who now resides in Austin, Texas, and maintains the sale was simply a mistake — is under investigation because of the transaction.
Walker, who once served on the Louisiana Board of Commerce, sold more than $971,000 in film tax credits that belonged to companies of four of Mock’s clients, the FBI affidavit shows. Because Mock’s clients already had sold the film tax credits, Walker’s buyers lost the $971,000, according to court records.
A year ago, according to Morrill’s affidavit, Walker admitted in a recorded conversation that he forged another man’s signature to transfer certificates for those film tax credits.
Morrill also quoted Walker as saying he sold the owners’ tax credits because one of them “owed me some money, so I figured I’d make it up this way.”