Search sponsored by Coast Marketplace
Home Capital Bureau

Kickbacks, scheme sends energy tax credit consultant to prison

Martin J. Shain used a sham company to funnel money to state employee, conceal commissions from IRS.

By PARIS ACHEN

Oregon Capital Bureau

Published on October 23, 2018 4:01PM

Last changed on October 24, 2018 6:35AM


A solar consultant who illegally profited off the sale of Oregon business energy tax credits has been sentenced to nearly four years in federal prison and owes hundreds of thousands in unpaid taxes to the Internal Revenue Service.

Martin J. Shain, 61, of Seattle, was a consultant to solar project builders at several Oregon University System campuses.

Between June 2012 and March 2015, Shain paid kickbacks to Joseph Colello, former manager of the energy tax credit program, in exchange for energy tax credit sales, according to court records.

Shain was sentenced Tuesday to 46 months in federal prison, three years’ supervised release and over $520,000 in restitution. He pleaded guilty in June to one count each of conspiracy to defraud the United States and tax evasion.

“Treating a government program as a personal ATM risks the integrity of all public servants who have responsibility for protecting Oregon’s resources,” said Renn Cannon, Special Agent in Charge of the FBI in Oregon, in a statement Tuesday.

In April, Colello was sentenced to five years in prison and ordered to pay $81,000 in restitution. He pleaded guilty to one count of conspiracy to engage in monetary transactions in property derived from unlawful activity, one count of conspiracy to defraud the United States and one count of filing a false income tax return.

According to court records, Colello provided Shain with names of energy tax credit sellers and interested buyers — information he was privy to as a Department of Energy employee. Colello then contacted the sellers and buyers to negotiate credit transfers and deceived them into believing that Shain had brokered the deals.

Shain founded a sham company — RC Shain and Associations — under the name of a relative where he funneled commission payments and concealed the income from the IRS.

He charged sellers a 1- to 2-percent fee, undercutting brokers who typically charged 10 percent for similar transfers. During the three-year conspiracy, Shain deposited more than $1.3 million in income from the scheme.

Colello accepted a portion of the profits as a kickback from Shain. The kickbacks came in biweekly cashier’s checks. In total, investigators estimated that Colello received more than $300,000 in kickbacks from Shain.

Paris Achen: pachen@portlandtribune.com or 503-363-0888. Achen is a reporter for the Portland Tribune working for the Oregon Capital Bureau, a collaboration of EO Media Group, Pamplin Media Group and Salem Reporter.



Marketplace

Share and Discuss

Guidelines

User Comments