NEW ORLEANS – The owner of a seafood wholesaler has been ordered by Deepwater Horizon claims chief Patrick Juneau to return a damage claim worth upwards of $2.2 million he received as part of the Deepwater Horizon settlement process on claims he falsely inflated his income and evaded income taxes to receive a larger payout.
As the owner of JBS Packing Company, a Port Arthur, Texas-based shrimp wholesaler and seafood packing company based, Jack Hemmenway submitted documents to the Deepwater Horizon Economic Claims Center on behalf of five vessels he owns which he claims were unable to operate due to the massive 2010 oil spill.
After submitting claims paperwork on behalf of all his vessels it was discovered that Hemmenway had overstated the earnings of one of his shrimp trawlers by $691,000. Instead of accepting a reduced claim, Hemmenway told the claims center he had accidentally submitted net revenue for the ship instead of gross revenue including labor costs and as a result he had misreported his income to the Internal Revenue Service.
As part of the claim, Hemmenway allegedly provided an amended tax form for 2008, one of the benchmark years his claim was based on, as well as a copy of a $150,000 check for the back taxes that was made out to the IRS. Shortly afterward, Hemmenway was granted a damage claim worth $2,245,281.98, which was paid to him on March 5, 2013.
However, investigators later found the check Hemmenway claimed to have provided to the IRS to pay his back taxes was never cashed.
“Hemmenway fabricated tax and other documents to inflate his verifiable shrimping revenues and induce the DHECC to pay him a larger award than it otherwise would have paid him,” Juneau’s court filing requesting the return of the award states.
Investigators found it was not until April 13, 2015, seven years after Hemmenway had misreported his income and after they began looking into the matter, that he finally paid the back taxes to the IRS.
Juneau claims Hemmenway’s actions constitute fraud because he knowingly provided false information in order to inflate his payout and that although he did finally file the correct tax forms and pay his tax debt, it was only after he had already falsely represented his income to the claims center. Thus, Juneau concluded the entire award should be voided.
Brent Coon & Associates, which represented Hemmenway, has also been asked to return $561,320 in legal fees received in the matter.