Posts Tagged ‘Chad Witter’

Witter acquitted of charges arising out of the Iowa film credit

Tuesday, August 7th, 2012 by Joe Kristan

A Polk County jury yesterday acquitted Bettendorf accountant Chad Witter of all charges arising out of his involvement with the defunct Iowa film tax credit.  The Sioux City Journal reports:

Witter, the primary accountant for the Changing Horses Productions film company and a tax credit broker for several film projects, had been in that same courtroom for the past two weeks listening as prosecutors blamed him for overbilling the state of Iowa in an attempt to line his own pockets in his role involving the now-shuttered Iowa Film Office.

But it took the jury of seven women and five men less than a day to declare Witter not guilty on charges of fraud, theft and ongoing criminal conduct.

The state got convictions or guilty pleas in seven of the ten cases in which they pressed criminal charges against film credit figures, though the conviction against former film office director Tom Wheeler was pretty minor, and he received a suspended sentence.  Two filmmakers received ten-year sentences for looting the program, which was shut down after the state auditor found that 80% of the credits were improperly awarded or insufficiently documented.  The Des Moines Register reports that Mr. Witter “brokered roughly $24 million of the $32 million in tax credits that were issued before the state ended the program.”

Of course, the real guilty parties in the film fiasco, which cost taxpayers over $30 million, never will face charges.  The 143 state legislators who voted to subsidize Hollywood with your money will never be called to apologize for enacting a stupid program and then failing to include minimal protections against waste in the law.  The Governor who signed the bill and then turned the keys to the treasury to a Walgreens photo desk clerk will never face a tribunal, and will never be required to publicly apologize for failing to protect taxpayers.

Finally, the credulous media that got so excited over celebrity sightings on your dime won’t apologize for missing the story, or for failing to provide detailed coverage of the film trials after the program blew up.


Tax Roundup, 8/6/2012: Last Iowa film credit trial goes to jury. Also: Iowa ID theft and olympian branding problems.

Monday, August 6th, 2012 by Joe Kristan

Chad Witter

The last Iowa film tax credit trial went to the jury Friday, so we may see a verdict as soon as today.  Chad Witter, a Bettendorf accountant who brokered transferable film credits from the filmmakers to those seeking a discount on their Iowa taxes, is charged with Fraudulent Practice, Theft and Ongoing Criminal Conduct arising out of the disastrous Iowa film tax credit program.  The Quad City Times reports:

Defense attorney Richard McConville conceded that “some people did cheat” the state, but Witter was not one of them. He contended the charges against Witter were based on “guilt by association” with people previously convicted of wrongdoing by prosecutors who were under pressure to make state elected officials and policy-makers look good in the wake of the debacle.

However, prosecutor Robert Sand of the Iowa Attorney General’s Office said Witter played a key role in gaining the trust of former Iowa film office manager Tom Wheeler and reducing state scrutiny of invoices that included charges of $225 for a push broom, $900 for a ladder and other claims in connection with several projects where the defendant tried to minimize his involvement to appear to be “the low man on the totem pole” in schemes to defraud the state.

The stakes are very high for Mr. Witter.  Two of his filmmaker clients, Wendy Weiner-Runge and Dennis Brouse, have received 10-year sentences on charges of looting the film program.  The offenses he is charged with could carry an even longer sentence if he is found guilty.

While a jury will decide Mr. Witter’s guilt or innocence, those who bear the heaviest responsibility for the looting of taxpayer dollars have dodged accountability.  The Iowa legislators who approved the ridiculous subsidy for Hollywood with no built-in controls by a 143-3 margin will never be forced to answer for their negligence.  The Governor and his economic development director who turned the keys to the state treasury to a man whose training in managing a state agency consisted of a stint as a Walgreens photo desk clerk will never be called to explain why they left the safe open.  And the media cheerleaders who were so caught up in the excitement of having starlets in town that they missed the story until the program exploded in scandal and disgrace will never have to sit before a jury of their subscribers to explain why they failed to pay attention.

Jason Dinesen starts a series on how a young widow client became a victim of identity theft as a result of the government’s reckless policy of releasing publicly the Social Security numbers of the recently-deceased.

Peter Reilly, Some Zero Tax Romney Returns Would Be As Shocking As Gambling At Rick’s

Jack Townsend,  Does the Preparer’s Fraud Invoke the Unlimited Statute of Limitations?

Bruce from Missouri:  Plan For Next Years Taxes, Starting Now

William Perez, Republican Legislators Outline Tax Reform Goals

TaxGrrrl issues a Call for Guest Posts About Tax Policy.

Robert D. Flach, formerly of New Jersey, is now Buzzing in Pennsylvania.

It’s not what you think.  Tax Blogger Kay Bell discusses the branding problems of this year’s XXX Olympiad.

Regardless, You Can Safely Assume That Jenna Jameson Is a Fan of Tax Cuts (Going Concern)

After all, What Kind of a Meanie Taxes Olympic Medals? (Christopher Bergin,

The glamorous life of the public accountant:  Ernst & Young Tax Associate Forced to Deal with the Slobs Around Him  (Going Concern)


Tax Roundup, 7/30/2012: film budgets, semi-secret film trials, and who really benefits from targeted tax breaks

Monday, July 30th, 2012 by Joe Kristan

hh44.jpgIowa Supreme Court rules that film budget summaries for film tax credit recipients are public information.  The court ruled that the state must release the summaries, reversing a lower court decision that the information was confidential.

Oddly, one of the film companies fighting to keep the information confidential was Polynation Pictures, whose leader is serving a 10-year sentence for looting the program.

Technically the trial of film tax credit figure Chad Witter is also public information, but if you are looking for coverage in Iowa media, it might as well be top secret.  The trail enters its second week today. Whatever revelations are in the trial about the shadowy world of brokers and middlemen who market tax credits, local reporters don’t think they’re worth mentioning.

Meanwhile, Iowa taxpayers still are coughing up cash to Hollywood, reports

Judgments paid by the state of Iowa spiked to nearly $13.2 million last fiscal year as attorneys negotiated settlements to resolve claims and disputes caused by employee mistakes, workplace misconduct or other damages involving government operations.

Nearly half of the payout approved by the State Appeal Board in fiscal 2012 involved pre-litigation settlements with film projects that sought state tax credits under an ill-fated state incentive program that was shut down in 2009 after an audit showed millions of dollars worth of tax credits were awarded improperly.

But I’m sure we got our money’s worth out of the deals because of all of the intangibles they filmmakers brought to Iowa… (via   

Film credits don’t make any more sense in New York.  Andrew Cuomo: Subsidizer to the Stars. (Patrick Brennan)

That tells you who the tax credit programs are really for.  From

Lee Schafer of the Minneapolis Star Tribune called me the other day to see if I had any information on the effectiveness of angel investment tax credits for a story he was writing.

I told him that all that the tax credit programs do is speed up or slow down investments (to take advantage of their timing).  There is no evidence that they increase angel investment whatsoever. They are not the job creator politicians claim when enacting these programs.  (See my arguments in my editorial at the WSJ).

In his investigation of the program in Minnesota he found strong support among politicians for the program, but very little support from entrepreneurs.

State tax incentive programs are usually a head fake, especially in high-tax states like Minnesota and Iowa.  The politicians use them to pretend they are “pro-business”  while leaving a business-unfriendly tax system in place.

Tax Policy Blog, Taxes and the Outsourcing of U.S. Jobs

Kay Bell, Cayman Islands to tax foreign workers

Paul Neiffer, S Corporation Tax Returns Generate A Lot of Income

Peter Reilly, First Circuit In Easement Donation Case – Don’t Confuse The South End With South Boston

Trish McIntire talks about when you can claim a married child as a dependent.

Robert D. Flach was Buzzing over the weekend.

TaxGrrrl, Olympians Get a Free Pass on Taxes at the London Games

Wheres’ the easy money in that? Speed cameras and automated road monitors everywhere, but the police still can’t catch a drunk driver (Via Gongol)


Tax Roundup, 7/24/2012: Why should death be simple? Film trial starts; did corporate welfare doom Curt Schilling?

Tuesday, July 24th, 2012 by Joe Kristan

Because why would they do something simple and sensible?  Tax Analysts reports ($link):

Practitioners should not expect a simplified estate tax return for electing portability, said James Hogan, branch 4 chief, IRS Office of Associate Chief Counsel (Passthroughs and Special Industries), on July 23.

The current estate tax law, which expires at year-end absent Congressional action, allows a surviving spouse to use a deceased spouse’s unused lifetime estate tax exemption — but only if an estate tax return is filed electing the carryforward for the deceased spouse’s estate.  In many cases neither spouse will owe estate tax, but there’s always the chance that the widow will win the lottery, so executors are filing a lot of these otherwise unneeded estate tax returns in self-defense.   It looks like that silly state of affairs will continue.

Casting Call.   Attorneys interview prospective jurors in Iowa film tax credit trial (Rod Boshart,  The report says the trial is expected to take about two weeks, with the panel to be seated today.  The charges against film-credit broker Chad Witter can be found here.

What happens when non-taxpayers run the show (Tax Foundation):

 Killed by corporate welfare?  An interesting item via Going Concern about Curt Schilling’s ill-fated video game venture:

Desperate to gain outside funding, Schilling used his fame to gain meetings with investors “practically every week for the company’s first three or four years.” But no one bought in, scared off by the company’s amateurish business plan and lack of experience. So when Rhode Island came calling with a sweetheart business development loan, 38 Studios jumped at the chance—even if it meant opening up a new office and hiring more employees, which hastened its demise.

If a business plan is any good, it will probably find funding without government help.  If it needs government help, it probably isn’t a great idea to start with.

No, the government doesn’t really have a big pot of cash waiting for you to claim it.  Two more taxpayers have pleaded guilty for their involvement in a Missouri-based scheme to claim $100 million in fraudulent refunds under the “1099-OID” scam.

Overruled.  Las Vegas Lawyer Pleads Guilty to Tax Evasion (USDOJ)

Steve Sink explains why rising tax rates may make this the year to sell your business (

Peter Reilly: Romney’s Olympic Horse Not Jumping Through The Last Hoop Of Deductibility

Eh? Is the American Girl Really (Gasp) Canadian? (TaxGrrrl)

Firms Pass Up Tax Breaks Due to Hassles and Costs (Paul Neiffer). The elaborate “targeting” of tax breaks often misses the mark.


Last film credit trial slated to begin today

Monday, April 16th, 2012 by Joe Kristan

The trial of CPA/film tax credit broker Chad Witter is set to start today in Polk County district court.  Mr. Witter is the last defendant scheduled for trial in the scandal arising out of Iowa’s disastrous film tax credit program. 

hh44.jpgIf the papers bother to cover this trial (they pretty much sat out the recent trial of Dennis Brouse, which was probably the biggest trial of a film industry figure), we could learn a lot about the cottage industry of brokers and middlemen who are the real beneficiaries of Iowa’s economic development credits.  The film credits were “transferable,” like a number of other Iowa tax credits.  That allowed the itinerant filmmakers, who didn’t plan to stick around to incur any Iowa taxes of their own, to sell the credits at a discount for cash.   Mr. Witter matched up filmmakers with interested taxpayers looking for a discount on their tax bill.

It is, of course, perfectly legal to buy and sell credits.  Mr. Witter is charged with “Ongoing Criminal Conduct (Class B felony), two counts of Theft in the First Degree (Class C felony), and two counts of Fraudulent Practice in the First Degree (Class C felony),” according to the Attorney General’s website.  His name came up in the Brouse trial and the State Auditor’s report, which said he approached potential film sponsors to get them to claim inflated values for their sponsorships.

Does anybody think that the film tax credit is the only tax credit ever abused in Iowa?

Link: Trial Information document

Related: Harold Hill gulls the House


New film credit trial dates set

Tuesday, March 8th, 2011 by Joe Kristan

The Des Moines Register reports that a new set of trial dates has been set for some of the remaining trials coming out of the Iowa film tax credit fiasco. Designated bureaucratic scapegoat Tom Wheeler goes on trial April 25. Other dates:
Dennis Brouse, filmmaker, August 22
Chad Witter, “film credit broker,” September 26.
More on the charges here.