Monday, September 25, 2023
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Calif. City Siphoned Sales Tax, Neighbors Say

LOS ANGELES (CN) - The city of Fillmore diverted sales tax from neighboring cities by recruiting businesses to set up sham offices in Fillmore and rewarding the business with "illegal gifts of public funds," say the neighboring cities of Industry and Livermore.

Fillmore allegedly worked with a developer and a consulting agency to get Industry and Livermore businesses to set up fake shops inside Fillmore city limits. Fillmore paid MTS Consulting and Inspired Development 85 percent of the extra sales tax revenue in exchange for their help in pulling off the scam, the plaintiff cities say. MTS and Inspired were supposed to pay the retailers part of their share, according to the lawsuit.

The plaintiffs name Twin Med LLC, Southwest Jet Fuel, Walgreen National Corporation, and Owens & Minor as businesses that participated in the scam.

Defendant Owens & Minor allegedly had a small Fillmore office space, staffed by one person who "had no involvement in sales or other business activities." The office was "essentially empty except for a small desk and telephone," the complaint says.

Mark Mulkerin, city attorney for Industry, filed the complaint in Superior Court.

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