A developer arrested for allegedly forging tax credit documents is facing a minimum of 16 years in prison if convicted on all counts.
Billy G. Jefferson Jr., the head of River City Real Estate, faces eight counts of forgery. Each count carries a two-year minimum and 10-year maximum sentence, meaning he could face up to 80 years if convicted.
Jefferson’s charges stem from documents submitted to the Department of Historic Resources in a bid to get tax credits on four rehabbed buildings, according to a statement released Thursday by the agency.
State police claim Jefferson forged and uttered public documents, meaning he knowingly endorsed false documents and submitted them to get the credits.
Jefferson is accused of committing all eight counts between February 17 and Feb 24 of 2012. Julie Langan, DHR’s deputy director of preservation programs, declined to specify which projects were used to apply for tax credits, but she said above-average construction costs can raise red flags.
Tax credits issued by the state work like this: Developers must submit their books to a certified public accountant, who must in turn certify to DHR that the costs submitted come from hard receipts and invoices.
“Then, to the best of our ability, we analyze the cost certification,” Langan said. “We’re looking at the type of building and scope of work, what was repaired and replaced, and we see if it meets industry norms.”
Wildly inflated costs in 2011 sunk Justin French, who was Jefferson’s partner in the conversion projects at the Tobacco Factory and the Parachute Factory in Manchester.
French is serving a 16-year sentence in federal prison after pleading guilty to a massive tax credit scheme.
Langan said the department had issued the tax credit certification on all the projects in question.
Jefferson faces a preliminary hearing May 14. According to Richard Johnson, a criminal defense attorney with the firm Johnson, Gaborik, & Fisher-Rizk, the case will likely be sent to a grand jury for indictments, which would move the case to circuit court from general district court.
Patrick Dorgan, chief of the special prosecutions and organized crime section of the attorney general’s office, is leading the prosecution, according to the charges filed against Jefferson.
Williams Mullen attorney Charles James is representing Jefferson.
Several criminal defense attorneys contacted by BizSense, including Johnson, agreed that the most likely outcome of the case is a plea agreement.
“More than 90 percent of these cases end up in plea agreements,” Johnson said. “So without knowing all the facts of the case, I’d say it’s likely.”
Local real estate developers who use tax credits to rehab old buildings said that this new tax credit fraud case is a setback to them.
“I think it’s important that Jefferson be given the benefit of the doubt,” said Tom Papa, a principal with Manchester-based developers Fountainhead Properties. “But it’s kind of like when people hear about a doctor who has committed malpractice – all the other doctors have to explain why they’re different. It puts added burdens on everybody, including those who have played by the rules for all these years.”