Film tax credit promoter sentenced to 70 months

Longtime film tax credit promoter Gregory M. Walker was sentenced Thursday in Baton Rouge to nearly six years in federal prison for a $1.83 million wire fraud against 24 victims.

U.S. District Judge James J. Brady imposed the prison term of 70 months, ordered Walker, 47, to serve an additional three years under post-prison supervision by federal investigators and directed him to repay the $1.83 million.

Under federal guidelines, Brady noted, he could have sent Walker to prison for an additional 17 months.

The judge told Walker he hoped he would make positive changes in his life during and after his confinement.

“You took money from your friends,” Brady said. “You stole from them, and you continue to steal.”

Added the judge: “You had Maseratis. You had Porsches. You had a fine home. You were living on the stolen gains from your friends and the other victims.”

“I wish I could go back in time, but I can’t,” Walker said. “Unfortunately, my kids are going to pay for this.”

Walker and his ex-wife have four sons. Walker, who previously operated Gulf States Health Services in Baton Rouge and was an owner in failed Gulf States Long Term Acute Care of Covington, was living near them in the Austin, Texas, area before he was charged with wire fraud related to selling film tax credits.

Walker pleaded guilty last year to one count of wire fraud and admitted that he sold at least $1.4 million in state film tax credits he did not own.

Walker’s attorneys, John C. Anderson and David L. Vaughn, told Brady in court and in pre-sentence filings that their client has paid $1.1 million toward his restitution.

U.S. Attorney Walt Green said after sentencing that Walker also must pay $978,418 the judge ordered him to forfeit last year.

That means Walker owes about $1.7 million on crimes Assistant U.S. Attorney Rene I. Salomon said actually netted Walker nearly $2.6 million.

Walker also admitted he signed another man’s name to documents related to his tax credit sales. Some of the emails Walker used in the fraud were sent from addresses of his now-closed Baton Rouge-based Gulf States Health Services.

The state suffered no loss, but tax credit buyers lost some or all of their money because the valid credits belonged to other people.

Walker has testified in a civil suit that his net worth exceeded $50 million as recently as 2008.

Although he remained free for six months after he was charged and pleaded guilty in October, Brady ordered Walker into federal custody April 15.

The judge issued that order at the request of Salomon. The prosecutor reported Walker enticed another $325,000 from three additional film tax credit buyers in July, more than six months after learning he was under investigation by the FBI and Louisiana Office of Inspector General in the original case.

As he had in the original case, Walker also used another man’s identity and fabricated emails to coax that extra $325,000 into his pockets last summer, Salomon added. The prosecutor told the judge in March the three tax credit buyers had neither received those credits nor recovered the money they paid Walker.

Brady received at least eight letters from people urging lenient treatment for Walker.

The letter writers include Walker’s mother, two sisters, his former wife, former mother-in-law, a brother-in-law and one of Walker’s former hospital company employees.

Also writing the judge was Baton Rouge resident Riley Hagan III.

Hagan told the judge he has done several business deals with Walker and has “never known Greg to be anything other than honest with his business partners.”

Added Hagan: “When economic seasons like those currently being experienced occur, and nothing in business seems to work for years on end, a ‘double up to catch up’ mentality can take root.

“And, as is often noted, desperate men do desperate things. I believe that is what happened here,” Hagan said.

As for the wire fraud Walker admitted committing, Hagan said, “It was an aberrant act not likely to be repeated.”

Salomon noted in court that Hagan did not reveal in his letter to the judge that he once was a Shreveport banker who pleaded guilty to participation in a conspiracy to misapply bank funds.

In June 2001, a three-judge panel of the 5th U.S. Circuit Court of Appeals in New Orleans upheld Hagan’s two-year prison sentence in the Shreveport case.

The appellate panel noted that nearly $14.2 million in bogus checks were kited through the bank, which suffered a loss of $4.8 million.

As for Walker, tax credit buyers are not the only people or organizations who have lost money to him or his businesses.

From about 2002 into 2009, Walker owned or managed a dozen long-term care hospital companies in south Louisiana as he simultaneously produced movies and sold state film tax credits.

The IRS, however, filed a $4.3 million tax lien against Walker for sums that had been withheld from hospital employees’ paychecks but never forwarded to the federal government.

Walker said last year he reached a settlement agreement with the IRS for payment of a smaller sum that he would not specify. He said that sum is being paid to the IRS over an eight-year period.

In January, U.S. District Judge Jane Triche-Milazzo, of New Orleans, signed a $3 million judgment against Walker and in favor of creditors of his failed Gulf States Long Term Acute Care of Covington.

The same judge earlier awarded Maryland-based food services contractor Sodexo Operations LLC a judgment of $1.36 million against Walker for bills owed by some of his former hospital companies.

After employees of some of those companies could not obtain payment of their insured medical bills, the U.S. Department of Labor announced last year it settled those claims with Walker for $87,600.

Vaughn asked the judge to recommend that the U.S. Bureau of Prisons jail Walker near Austin, Texas, and place him in a rehabilitation program for drug and alcohol addicts.

Brady said he would make the recommendation but noted that prison officials have the final word on such issues.