Judge levels tax fraud charge at ABQ attorney
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A federal bankruptcy judge wrote in a court order that prominent
Judge
"Between 2016 and 2020, Ferguson deducted
"At a 37% marginal tax rate, the result is an improper reduction of
Ferguson is the owner and president of
Ferguson responded that as Motiva's sole investor, he legally deducted all of Motiva's losses by agreement with the other owners of the limited liability company.
"They didn't have any investment in the business," Ferguson said in a phone interview. "So the operating losses in those years that the business incurred operating losses were placed on my tax return. The testimony was clear that that was the agreement."
Thuma also found that "Ferguson used Motiva to avoid paying state excise taxes by claiming that Motiva owned cars that Ferguson intended to be part of his private collection."
The collection included at least 23 cars with a total purchase price of about
Assuming an average excise tax of 3.5%, Ferguson avoided paying about
The fact that Ferguson titled cars under the Motiva dealer license belies his claim that the cars do not belong to Motiva, Thuma wrote.
"Ferguson is barred from telling this Court that Motiva does not own the Subject Cars, because he previously represented to the
Thuma handed down the order
Ferguson filed a motion in October disputing Thuma's findings and asking the judge to reconsider his opinion and judgment. A hearing is scheduled
Motiva's insolvency is a key issue because a
"The judgment caught Ferguson by surprise," Thuma wrote, because Motiva held title to a number of luxury cars purchased with Ferguson's money. "Ferguson acted quickly," Thuma wrote. On
Ferguson is listed as director and chairman of Dealerbank in the
By the time the company shut down in 2018, "Motiva had only a few worthless assets," Thuma wrote.
Butler garnished Motiva's bank account in
Thuma found that Ferguson improperly used Motiva and other companies to prevent payment to Butler and other creditors.
"All creditor claims against Motiva should have been paid in full," he wrote. "Instead, creditors found they had claims against an empty shell."
Thuma also made Ferguson personally liable for paying Motiva's creditors – an action called "piercing the corporate veil."
Thuma also noted that in
Ferguson contends that Motiva, Dealerbank and other businesses involved in the dispute are legitimate companies that paid creditors and carried little or no debt.
"Those businesses, most of them, went on for a decade or more and had nothing to do with creditors," Ferguson said. "It's a bizarre conclusion."
Ferguson said that he and Butler were Motiva's only creditors, which means that Ferguson will receive part of any money he pays toward Motiva's debts.
Motiva struggled because
"Here in
The six-figure judgment in the Butler case, which Ferguson called "an incredible amount of money," was the final blow that killed Motiva, he said.
"The business couldn't begin to address half of it," Ferguson said of the judgment. "There was a garnishment that cleaned out her bank account. That was the end of Motiva."
Ferguson said the core of Motiva's business involved selling cars on consignment for owners. He denied that he transferred ownership of the cars to avoid paying the judgment.
Car collections are "transactional," he said. "You buy them and you sell them. Sooner or later they all get sold. There were only four or five cars that hadn't been sold through the dealership,"
He also denied using Motiva's dealer tag to avoid paying excise taxes on cars he purchased for his own collection.
"The testimony was clear that we went through 40 cars or more, selling them off through the Motiva sales process through the dealer's license," he said. "There were a couple of cars that I used personally."
What happens when a judge accuses someone of tax fraud?
"From a legal perspective, I don't know the answer," Edelman said in a phone interview. "It's not too good because it's a judicial finding."
Butler is unlikely to receive payment pending Ferguson's motion for reconsideration, he said.
Edelman said he was surprised that Ferguson chose not to settle the bankruptcy case and instead take it to trial.
"There were ample opportunities for
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