Investment Firm Agrees to End Sale of Shares in Mines
A Canoga Park investment firm agreed Thursday to stop selling overvalued shares in gold and silver ore mines in the Sierra foothills that Internal Revenue Service agents said cost the federal Treasury more than $29 million in lost tax revenues.
Justice Department officials said the firm, International Recovery Inc., and its president, Donald C. Como, agreed to terms of a permanent injunction formulated in Los Angeles federal court at the behest of IRS agents.
Federal authorities said about 1,200 people invested as much as $60 million in 1982 and 1983 in three mining claims--Reward-Brown Monster Mine, Cassill Mine and Tiedeman Mine--in order to qualify for federal tax deductions.
But a federal complaint charged that the “abusive” tax-shelter plans formulated by International Recovery grossly overvalued the ore and therefore the tax deductions were not legal.
Under terms of the injunction, International Recovery and Como are prohibited from selling any abusive tax shelters and advising client on ways to understate federal income tax liabilities.
The defendants also are required to submit all promotional materials on tax shelters to the IRS for review.
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