Two El Cajon residents and a Utah man were sentenced in U.S. District Court in Salt Lake City this week for aiding and abetting the preparation of false income tax returns in connection with what government officials said were bogus motion picture tax shelters.
Francis Evans of El Cajon, owner of Commedia Pictures Inc., was sentenced to 18 months in prison Thursday on two felony counts and was ordered to pay $4.5 million in restitution to more than 200 investors, half of whom live in San Diego and Orange counties, Internal Revenue Service spokeswoman Sarah Wrefort said Friday.
Also sentenced was El Cajon tax preparer Patricia Rundle, who received three years' probation and a $1,000 fine. She was also ordered to perform 100 hours of community service. Evans' brother David also received an 18-month jail term.
Commedia set up partnerships that raised more that $4.5 million to fund three feature-length motion pictures in the early 1980s. The movies were titled "Bottom," "The Forest," and "Survival Zone," Wrefort said. Commedia instructed its limited partner investors to take tax write-offs based on a combined value of $56 million for the three motion pictures.
The IRS contended, however, that the three movies, which received only limited screening, were worth a combined $40,000, meaning the investors improperly took inflated investment tax credit and depreciation deductions.
The Commedia partnerships cheated the government out of $5 million in taxes, Wrefort said.
Each of the investors' tax write-offs has been disallowed by the IRS.