A scheme to pad his pockets by lying to investors and the Internal Revenue Service has landed a Newark accountant a six-year prison sentence.
U.S. District Judge James L. Graham sentenced Daniel D. Weddington, 64, today in a natural-gas drilling scam that involved fake documents, inflated income-tax deductions and a multi-million dollar rip-off.
He had pleaded guilty in April to charges of aiding and assisting in the filing of false income tax returns and obstructing an IRS audit.
The judge called Weddington?s actions ?blatant fraud? and said the consequences were ? horrendous for his clients.? He ordered Weddington to pay $3.2 million in restitution.
He faces additional criminal charges in Licking County Common Pleas Court for theft from individual investors. A trial in that case is scheduled for Nov. 30.
Weddington operated his scheme when he was part owner of Mid-Con Petroleum Inc. in Heath. He was in charge of all the company?s accounting and dealt with investors for the company?s natural gas wells.
Between 2004 and 2006, Weddington collected payments from investors. He then inflated the investment amounts on investors? tax returns he filed so he could collect investment commissions and investors could receive large tax refunds.
Weddington assured investors the tax returns were legal. Later they learned they had to pay back the IRS, as wells as penalties and audit fees.
?He?s a con man, completely,? said Janet S. Keipp, of Pataskala, after Weddington was sentenced. She said she and her husband, Karl, have paid about $90,000 as a result of the tax fraud and lost an additional $81,000 to Weddington.
She said she?s sure she?ll never see a dime in restitution.
Court documents show the company had more than 200 investors; Weddington?s federal criminal charges were related to only three as part of a plea agreement.
Assistant U.S. Attorney Daniel A. Brown said a long prison sentence was justified.
?The need to provide deterrence for others screams out in this case,? Brown said.
Weddington surrendered his Ohio public accountant?s license when he pleaded guilty.
In May, a 2007 federal civil case against him was settled when Graham ordered Weddington and Mid-Con co-owner James Earl, of Heath, to stop selling customers interest in wells owned by the company. In that case, investigators said the government?s loss was at least $5.7 million.
Earl was not charged in the federal criminal case.
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Source: http://www.dispatch.com/content/stories/local/2011/10/07/gas-scheme-sentence.html
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