AMPCO sold its property to the charity for $2,160,000 on May 6, 2019, and later claimed a $2,595,000 deduction on its 2019 tax returns. On the same day that the charity purchased the property, Hickory Hill Properties, LLC, bought the property from the charity for $2,650,000, “thereby effectively undermining the fair market value of $4,755,000,” said AMPCO.
The IRS later audited AMPCO’s tax returns and in September 2021 determined that BAA had not issued a true qualified appraisal. Moreover, the IRS found that the property had a fair market value of $2,650,000 (not $4,755,000) and thereby reduced AMPCO’s deduction from $2,595,000 to $490,000.
At one point as the lawsuit proceeded, Bryant and BAA were dismissed as defendants in the case. A default judgment against Welfont, TAG, and Scull handed down on Sept. 29 of this year awarded AMPCO $7,007,296 in damages.
Gibbs International, Inc. v. Welfont Group LLC et al. (Default Judgment of $626,581)
A different case filed against Welfont, TAG, and BAA by Gibbs International, Inc. and Wellstone Holdings, LLC, also resulted in a default judgment. BAA was terminated from the case prior to the final judgment.
The Gibbs complaint was filed in May 2021 and describes the same type of actions as the AMPCO case, this time with property located in Spartanburg County, South Carolina.
Welfont proposed the bargain sale idea, and Gibbs moved forward with obtaining a qualified appraisal with the help of TAG and BAA. This occurred around June 2017, according to the lawsuit. Gibbs received a qualified appraisal of $5,675,000 and on Nov. 9, 2017, sold the property for $2,500,000 to a charity called Master’s Commission International Network, Inc.
Gibbs later claimed a deduction of $3,175,000 on its 2017 tax return. The lawsuit alleges that on Dec. 20, 2017, Welfont “or an entity affiliated with it” purchased the property from Master’s for $3,932,000. The lawsuit also claims that the following year “on or about August 27, 2018,” the property was sold “to a third party for $3,400,000, in both instances undermining the fair market value of $5,675,000 set forth in the BAA Appraisal.”
Upon auditing Gibbs’ tax return, the IRS found that Gibbs had not received a legitimate qualified appraisal and also disagreed about what the fair market value of the property had been. The agency reduced the company’s deduction from $3,175,000 to $1,580,000.
The default judgment of $626,581 against Welfont was handed down in February 2022.
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Sterling Resources Corp. v. Welfont Group LLC et al. (Voluntary Dismissal With Prejudice)
A complaint filed in August 2021, a few months after the Gibbs lawsuit was filed, recounted events that allegedly occurred in 2016 in Lafayette, Louisiana. The suit identifies the plaintiffs as Sterling Resources Corporation and Arthur C. LeBlanc Jr.
The original defendants were The Welfont Group, TAG, BAA, Andrew Bryant, Christopher Bryant, Lynda Scull, and Shawn Marcell. In this case, the property was a former Kia automobile dealership.
Marcell and Scull were alleged to have been among the “members, agents, representatives, and/or employees” connected to Welfont. Sterling claimed that Marcell was the broker for the charity Welfont suggested to Sterling for the bargain sale. That charity was the Master’s Commission International Network, the same charity named in the Gibbs case.
