Rep. Green, feds tussle

By RALPH BARTHOLDT

Hagadone News Network

Rathdrum lawmaker John Green says a federal indictment in Texas charging him with conspiracy to defraud the U.S. government is retribution by the feds.

Green, an attorney licensed to practice in Texas, told The Hagadone News Network on Friday that he’s being targeted because he has litigated many tax cases involving the Internal Revenue Service.

“They don’t like it when you stand up to them,” Green said. “I’ve said this before. The IRS is a criminal organization … They don’t care about the law. They do what they want to do.”

A federal grand jury sitting in Fort Worth, Texas, indicted Green and a Texas couple, longtime clients of Green’s, in July 2018, while Green was campaigning for Idaho House of Representatives Seat B in District 2.

Green handily won the election and has been participating in the current legislative session in Boise.

The couple, Thomas and Michelle Selgas, are separately charged with tax evasion. All three pleaded not guilty to the charges.

“The allegations are all absolutely false,” Green said. “My clients did not evade any taxes.”

The Selgases and Green are accused of defrauding the U.S. government by hiding the couple’s money from the IRS so it could not be taxed.

“The indictment charges that in furtherance of the conspiracy the Selgases transferred personal funds to Green’s IOLTA and that Green would pay personal expenses of the Selgases from his IOLTA,” said a U.S. Department of Justice press release last summer.

An IOLTA, or Interest on Lawyers’ Trust Account, is a bank account used by a lawyer to hold money in trust for clients.

The State Bar of Texas requires all lawyers who handle money for their clients to participate in the state’s IOLTA program, which provides a mechanism for funding legal aid for low-income Texans by collecting interest on client trust accounts.

“Only client funds that are nominal or held for a short period of time may be deposited into IOLTA accounts,” according to the website for the Texas Access to Justice Foundation, a nonprofit that administers the IOLTA program in the state.

Green is accused of maintaining several IOLTAs as part of the alleged tax evasion scheme involving the Selgases.

The Selgases, according to U.S. attorneys, deposited profits from the sale of gold coins, property and other income into several IOLTAs managed by Green, instead of depositing the proceeds into their own personal accounts. Their bills were reportedly paid from Green’s IOLTAs, in an effort to avoid being tracked and having to pay federal income taxes.

Green said there is no wrongdoing connected with his IOLTAs. He said it’s not unusual for attorneys to write checks from these accounts on behalf of their clients whose money is being held in trust.

“That’s just a common lawyer practice,” he said.

The trio is also accused of filing false tax returns.

If convicted, the Selgases face a maximum five-year prison sentence for tax evasion and five years on the conspiracy. Green faces a maximum five years for conspiracy.

During last year’s primary election, Green faced questions regarding his personal finances, which showed tax liens that had been filed against him. The liens had expired but were never settled.

Calling the liens “totally bogus,” Green said during the campaign that he had broken no laws and owed no money to the government.

“I don’t owe them anything,” he said at the time. “I’m in full compliance with all the federal tax laws.”

During an October hearing in the Texas case, Green’s attorney, Michael Louis Minns, called the case against his client “extraordinarily substantial and interesting with interesting idiosyncrasies in it.”

Minns asked for a continuance because of the more than 40,000 pages of documents attached to the case and because witnesses include people living in Texas and Idaho.

The case, he said, “has nothing to do with taxes.” Instead, Minns said, it deals with Green’s 1 percent partnership with the Selgases’ patent research company.

“They’re trying to intimidate me and the Selgases,” Green said Friday. “They’ve been threatening this for three years. They’ve never produced any evidence that would substantiate the claims.”

A trial is set for Sept. 23 in U.S. District Court Northern District of Texas Dallas Division.

Hagadone News Network staff writer Maureen Dolan contributed to this report.