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News Release from Comptroller Susan Combs

For Immediate Release
August 13, 2009

The End of the Road for a Motor Fuel Tax Evader

(AUSTIN) — A Houston area man has received a 12-year prison sentence and an order to pay $1 million in restitution to the state for his part in a scheme to blend and sell untaxed motor fuel to unsuspecting gas stations. Sidney Baldon II, 47, pled guilty in a Travis County court to three indictments for motor fuel tax crimes connected to the scheme that operated in 2002 and 2003. He was sentenced June 23.

Baldon owned a company that transported kerosene and other motor fuel products.  The company purchased kerosene from a Louisiana refinery and, to avoid paying excise taxes, falsely claimed the fuel would be exported to Mexico. Instead, Baldon trucked the kerosene to Texas and blended it with other additives to produce more than 22 million gallons of diesel fuel. Baldon distributed the diesel to retail gas stations, where it was sold as taxable motor fuel. Tax was collected from consumers, but was never remitted to the state, defrauding the state of $4.5 million.

“When a business collects tax and keeps the money, it not only defrauds the state, but also steals from every customer who pays the tax in good faith that the money will be used to benefit Texas,” Comptroller Susan Combs said.

Baldon’s crime is featured on the Comptroller’s Web site at http://www.window.state.tx.us/about/cid/. The Web page highlights the work of the Comptroller’s Criminal Investigations Division and is often updated with news concerning arrests, indictments and verdicts in tax cases.  The site also informs the public about crimes and penalties for sales, motor fuel, tobacco and other taxes.

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